Will the Chinese Economy Power the Global Meat Industry?

Is the Chinese bubble about to burst? For some time now, the growth rate in China has been the most rapid of the BRIC countries (Brazil, Russia, India and China). China's growth has also been dragging the rest of the world economies along behind it, shining as a beacon to the faltering economies in Europe and the US, wrote ThePoultrySite Editor in Chief, Chris Harris.

There has also been growth in wealth and in the middle class in China and the population has been moving to an urban way of life. These developments have also brought about changes in eating habits: meat and protein diets are replacing cereals and crops. Meat consumption in China reached around 59kg per head in 2010, and the processed and pre-cooked product markets are growing.

The International Monetary Fund forecasts that China's economy that spiked at over 14 per cent growth about four years ago, has now settled to a growth rate of about nine per cent. And the meat industry there is virtually keeping pace with it. An IBIS World report, published this month, forecasts that the industry will develop at a rate of 8.3 per cent a year, reaching $82.38 billion in 2016.

Revenue from the meat processing industry in China this year is expected to have risen by 13 per cent year on year to $55.24 billion. On average, since 2006 the industry has seen a 22.5 per cent rise in value.

Prospects for the future depend on how and whether the Chinese government can keep a cap on inflation. The latest figures show it running at 4.2 per cent in November, down from the July figure of 6.5 per cent.

If inflation is kept in check and the economy continues to expand, meat consumption is expected to increase and the meat processing industry will develop further – albeit at a slower place than over the past decade.

Turning our attention from Asia to North America, Canada pledged to support free and open trade at the World Trade Organization (WTO) ministerial meeting. However, there was no mention of Canada's protected poultry or dairy industries, wrote Charlotte Johnston, editor of ThePoultrySite.

At the meeting in Geneva, Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway said that free and open trade is the best way to create jobs and economic growth for people around the world.

But while over the last five years, Canada has pursued an ambitious and active free trade plan to open doors for Canadian businesses around the world and is on the way to becoming the first tariff-free zone for manufacturing imports in the G-20, back home, the situation is quite different: the poultry and dairy industries are protected by supply management systems. Canada is coming under criticism from abroad over this apparent anomaly in its trade policy.

However, Mike Dungate, Executive Director of Chicken Farmers of Canada, responded to the article, saying Canada's trade policy is misunderstood. While Canada has a great deal of export interests in agriculture (world's 4th largest exporter), Canada is also the 6th largest importer of agricultural products.

He stressed that Canada is not a closed market for dairy and poultry: it is, in fact, the 16th largest importer of chicken in the world and the 3rd most valuable market for US chicken exports.

"We stand alone in providing clean, consistent and transparent access to our market, while other countries hide behind phony non-tariff barriers. While many countries have implemented protectionist measures in the past two years, Canada has maintained the access it has always provided to its chicken market – access that is almost twice our WTO commitment," said Mr Dungate.

European Union Commissioner John Dalli says that action has already begun at European level to punish Member States who have made little or no effort to conform to new hen welfare laws in the EU. The ban on conventional battery cages for egg production in the region comes into force on 1 January 2012. Those producers who have invested in alternative housing systems for their hens fear that their local markets will be flooded with 'illegal' eggs produced in other countries where little investment and effort have been made to comply with the directive.

Turning to bird flu news, the discovery of one dead wild bird in Hong Kong last week with H5N1 highly pathogenic avian influenza led to the immediate closure of live bird markets when infected carcasses were discovered at a market and authorities across China are now on alert. There have also been four new outbreaks of H5N1 in poultry in Bangladesh and two more human victims have been reported in Egypt, one of whom has died.