November 17, 2003
Hurdles to Overcome for China's Exports of Aquatic Products
An eFeedLink Exclusive Report
China is the leading nation in the raising and exports of aquatic products. However, export only constitutes a small proportion of the country's total aquatic production. To a certain extent, this has limited the healthy growth of the aquatic industry in China as a whole.
Aquatic products exporting companies play a key role in the international trade of aquatic products. The following points are worth pondering in considering their future growth:
I. Low level of Support Structure for Exporters and Low Proportion of Processed Products
The variety of Chinese aquatic products available is not adequate in meeting the needs of the international market. Most companies only focus in the production of a single product and those that engaged in processed food production are small enterprises. Furthermore, the equipment used is generally old, and food preservation or processing technologies are lagging behind. Most products are semi-processed and there is a lack of fully processed high-end aquatic food products. All this combine to make Chinese aquatic products not competitive in the international market.
II. Low Level of Food Processing and Value-Added Products
Processing of aquatic products can add value, both in the economic and technological sense of the word. It can also increase market share and boost earnings for companies and the industry as a whole. The potential of this industry is extremely promising and opportunities are abound.
The ability to foster the growth of this "sunrise" industry and to make it the pillar of the export economy will bring economic benefits to its related industries, and become the focus of the industry.
China lags behind many foreign countries in the field of aquatic food processing. Except for part of the industry that comprises large enterprises, most small and medium enterprises only possess equipment that can handle very basic food processing requirements. Most of these equipment or machines still require workers to operate them manually.
Until today, there is hardly any professional company that engages in the manufacture of sophisticated food processing equipment. For instance, there is lack of machine that can systematically replace manual work in the various production stages in the processing of fish produce in China.
III. Lagging in the Adoption of Quality Certification for Aquatic Food Products
The quality of aquatic food products has improved rather significantly during the past two decades. Some of these products have even attained world-class standards. However, China is slow in the implementation of an industrial standard to certify or guarantee the quality of an aquatic food product. Currently, only 250 export companies have implemented the HACCP plan. Among these companies, only 120 have received approvals to export to countries in the European Union.
IV. Poor Access to Industry Information of International Market
Industry information is very important for any modern enterprise and is especially so in companies that engages in international trade. There are two channels from which information is disseminated: (1) Aquatic production companies in China; (2) Related international organizations and overseas government information websites. Many of China's aquatic production firms are limited by their small scale of operation and their small pool of talent. Thus, they are not able to tap on technology to receive up-to-date industry information.
V. Inability to Fully Tap on Assistance by International or Governmental Organizations
The Food and Agricultural Organization (FAO) and other international organizations do provide assistance to the aquatic food industries worldwide. Under the FAO, programs have been planed to train personnel in the management, technical and research aspects of the sector in China. Government assistant plans are also in place to promote the development of the aquatic production sector. However, many enterprises do not have a clear understanding of the aims of these programs and thus they have not fully utilized the types of assistance available.
VI. Lack of Export Organizational Structure
Currently, multi-industrial companies or departments in different companies are involved in the aquatic production trade. There is a lack of an effective umbrella organization to oversee the activities of these establishments, and this has turned an initial advantage into a disadvantage.
Severe price wars often follow the successful launching of a popular product, resulting in falling profits for related firms. Some firms even suffered losses, while others resort to dumping.
Outdated industrial management practices of Chinese enterprises also resulted in their inability to stand up to competition in the face of trade barriers and quota imposed on exports by foreign countries.