Major Agriculture Business Opportunities Exist for Doing Business with China
Mckinsey and Company Report : “Doing business in China” identified Industries with the potential for faster growth in the next decade (The Agriculture and Food Sectors were two of the major ones Identified)
“China does not feed itself today—certainly not with the kind of quality and value-added products that the middle class seeks—and it will be challenged to do so in the future. Continual food-safety crises illustrate the challenge. For many successful technology investors agriculture is the new Internet. Chinese companies are investing in agriculture outside of China at scale, from Chile to the Ukraine, for China. They also invest in China, especially in value-added products—such as fruit and the production of frozen ready meals.”
China’s Agriculture and Agri-Food Demand:
China has 1.38 billion people, more than any other country in the world.
China is now the world’s leading economy.
China’s economy is continuing to grow far faster than any other major economy. It is leaving the United States, and even the combined economies of the European Union, rapidly behind.
China’s economy produced US$23 trillion in 2017.
The European Union was second, at US$19.9 trillion. The United States fell to third place, producing US$19.3 trillion.
China continues to be the world’s largest consumer market for Food and Beverage products, after surpassing the United States in 2011. This makes the Chinese market increasingly appealing for foreign brands, especially as Chinese consumer behaviour shifts. Despite a fragmented distribution infrastructure and growing local competition, opportunities for North American companies to sell their products in China are going to grow further.
Growth of imported Food and Beverage products is driven by rising disposable incomes, limited arable land, water scarcity issues, urbanisation, an improving logistics system, growing concerns for food safety, as well as a growing taste for foreign foodstuffs.
China already has a large demand for Agri-Food imports and Agri-Food imports are expected to undertake further major growth.
Growing urbanization, increases in personal income, and limits on China’s agricultural production will impact the country’s ability to meet its growing agriculture and food demand through domestic production. China’s middle class is expanding rapidly and quickly adopting a “western” diet with an increased focus on animal proteins, processed foods, eating out, and convenience dishes. This offers significant potential for agriculture and food exporters around the world, including those in Canada, the United States and Mexico.
Although China is the largest agriculture producer in the world …..
China is a major net importer of agricultural products.
In 2015, China's agri-food and seafood trade deficit was greater than US$60 billion with imports valued at more than US$180 billion, and approximately US$120 billion in exports.
China’s Agriculture Technology Needs:
Adoption of agricultural innovations in China has significantly affected agricultural production growth in the last 25 years.
The Government of China is putting a great effort on upgrading agricultural technology and equipment, perfecting watering systems and extending water saving technology, increasing expenditures for agricultural science and technology, perfecting the extension system, updating the agricultural scientific research extension system, and increasing the capability for agricultural scientific innovation.
The Government of China has as policy to: “promote green production, extending the sector's industrial and value chain, and boosting innovation.”
The key to China’s objectives in China's agricultural sector is to increase the output of high-quality products based on green and innovative production.
China also needs to deploy innovations more effectively, and further develop its own agricultural innovations.
China, has the ability to deploy North American and indigenous Chinese agricultural innovations on an unprecedented scale.
There are a lot of farms in China.
In 2009, A Government of China estimate of the number of farm holdings in China put the figure at approximately 200 million.
Many of those are very small subsistence farms but millions are commercial farming operations of different sizes.
China also has some of the largest and most advanced farming and food production corporations like COFCO --- a Fortune 500 company and one of the world leading Agriculture, Food and Beverage companies with approximately US$70 billion in annual sales.
China has approximately 30-40% of the world’s farms.
The United Nations Food and Agriculture Organization puts the world’s total number of farms around 500 million.
China has approximately 200 million out of the world’s 500 million farms.
And they are in need of a lot of modern technology. Some of that technology will be supplied by Chinese domestic companies and some by foreign companies.
But even a very small piece, or share, of China’s agriculture technology markets can mean hundreds of millions of dollars – even billons of dollars -- in annual revenues over the next 10 to 15 years.
Agricultural technology innovation will be particularly important to China in animal protein supply chains. Dramatic increases in Chinese animal protein consumption over the next ten years will put enormous pressure on animal and crop production, so the improvement and development of technologies that increase the efficiency and sustainability of such supply chains is vital.
“China does not feed itself today—certainly not with the kind of quality and value-added products that the middle class seeks—and it will be challenged to do so in the future. Continual food-safety crises illustrate the challenge. For many successful technology investors agriculture is the new Internet. Chinese companies are investing in agriculture outside of China at scale, from Chile to the Ukraine, for China. They also invest in China, especially in value-added products—such as fruit and the production of frozen ready meals.”
China’s Agriculture and Agri-Food Demand:
China has 1.38 billion people, more than any other country in the world.
China is now the world’s leading economy.
China’s economy is continuing to grow far faster than any other major economy. It is leaving the United States, and even the combined economies of the European Union, rapidly behind.
China’s economy produced US$23 trillion in 2017.
The European Union was second, at US$19.9 trillion. The United States fell to third place, producing US$19.3 trillion.
China continues to be the world’s largest consumer market for Food and Beverage products, after surpassing the United States in 2011. This makes the Chinese market increasingly appealing for foreign brands, especially as Chinese consumer behaviour shifts. Despite a fragmented distribution infrastructure and growing local competition, opportunities for North American companies to sell their products in China are going to grow further.
Growth of imported Food and Beverage products is driven by rising disposable incomes, limited arable land, water scarcity issues, urbanisation, an improving logistics system, growing concerns for food safety, as well as a growing taste for foreign foodstuffs.
China already has a large demand for Agri-Food imports and Agri-Food imports are expected to undertake further major growth.
Growing urbanization, increases in personal income, and limits on China’s agricultural production will impact the country’s ability to meet its growing agriculture and food demand through domestic production. China’s middle class is expanding rapidly and quickly adopting a “western” diet with an increased focus on animal proteins, processed foods, eating out, and convenience dishes. This offers significant potential for agriculture and food exporters around the world, including those in Canada, the United States and Mexico.
Although China is the largest agriculture producer in the world …..
China is a major net importer of agricultural products.
In 2015, China's agri-food and seafood trade deficit was greater than US$60 billion with imports valued at more than US$180 billion, and approximately US$120 billion in exports.
China’s Agriculture Technology Needs:
Adoption of agricultural innovations in China has significantly affected agricultural production growth in the last 25 years.
The Government of China is putting a great effort on upgrading agricultural technology and equipment, perfecting watering systems and extending water saving technology, increasing expenditures for agricultural science and technology, perfecting the extension system, updating the agricultural scientific research extension system, and increasing the capability for agricultural scientific innovation.
The Government of China has as policy to: “promote green production, extending the sector's industrial and value chain, and boosting innovation.”
The key to China’s objectives in China's agricultural sector is to increase the output of high-quality products based on green and innovative production.
China also needs to deploy innovations more effectively, and further develop its own agricultural innovations.
China, has the ability to deploy North American and indigenous Chinese agricultural innovations on an unprecedented scale.
There are a lot of farms in China.
In 2009, A Government of China estimate of the number of farm holdings in China put the figure at approximately 200 million.
Many of those are very small subsistence farms but millions are commercial farming operations of different sizes.
China also has some of the largest and most advanced farming and food production corporations like COFCO --- a Fortune 500 company and one of the world leading Agriculture, Food and Beverage companies with approximately US$70 billion in annual sales.
China has approximately 30-40% of the world’s farms.
The United Nations Food and Agriculture Organization puts the world’s total number of farms around 500 million.
China has approximately 200 million out of the world’s 500 million farms.
And they are in need of a lot of modern technology. Some of that technology will be supplied by Chinese domestic companies and some by foreign companies.
But even a very small piece, or share, of China’s agriculture technology markets can mean hundreds of millions of dollars – even billons of dollars -- in annual revenues over the next 10 to 15 years.
Agricultural technology innovation will be particularly important to China in animal protein supply chains. Dramatic increases in Chinese animal protein consumption over the next ten years will put enormous pressure on animal and crop production, so the improvement and development of technologies that increase the efficiency and sustainability of such supply chains is vital.