March 11, 2008

China drafts policy paper to protect local soy manufacturers

China has drawn up a policy paper that will protect and support domestic soy firms and impose some restrictions on foreign investors, the Economic Observer reported.

The draft paper is still open for various suggestions to ensure protection of domestic soy industry players, like providing technology assistance and tax breaks.

The government intends to curb the presence of foreign companies as they are currently dominating the soy processing market of China, the report said.

In 2007, China imported over 30 million tonnes of soy, with overseas firms such as Bunge and Cargill accounting for 80 percent.

Around 40 percent of the soy extraction capacity is also being controlled by foreign companies.

Meanwhile, the National Development and Reform Commission is mulling on steps to regulate foreign investment in China's corn processing sector, the report stated.