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Profiles of the Chinese Pig Industry (2)
Food safety has recently caused a large amountlot of public concerns in China due to a spate of cases where pork was contaminatedfood-related toxicities. In the past 3 years, several human fatalities have resulted from pig farms deliberately adding clenbuterol to increase pig lean content. Complaints and anger from the public have forced the government to impose tighter control and establish strict new laws for quarantine and inspections. The change could potentially deter the new entries of small pig producers and reduce the number of backyard producers who have less control of the quality. Branded products from large-scale pig farms could gain advantages if they can differentiate their products in the market.
China’s WTO accession along with food safety concerns could facilitate foreign pork producers in entering the high-end of the Chinese pork market. Imported pork may satisfy the needs of high-end consumers, consumers in urban areas, and foreign tourists. However, whether or not local consumers will purchase imported pork is difficult to predict and this will depend on their disposable income growth, changes in consumer preferences, and other socioal-economic factors. Even under more favorable market conditions after WTO, foreign investors in the Chinese pig industry still seem cautious. Until now, limited amounts of foreign capital have beenwere brought into breeding businesses and a few packing plants. It seems to be too early to evaluate the impacts of foreign investments. From television sets to laptop computers, all consumer products have become, to some degree, commodities in China now. The question is: Can foreign pork producers entering the Chinese market differentiate their product? If not, imports are unlikely as competition on price is difficult.
In many aspects, the current industry is quite efficient at delivering product from the farm to the table. Processing, market
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