US beef made a triumphant return to China on June 30, a month after the Trump administration brokered a deal to lift a ban that had been in place since 2003.
Importing 10.76% of the world’s beef, China is the second largest beef importer after the US, which is also the world’s number one exporter. In 2016, Chinese beef imports topped US$2.6 billion.
As living standards improve, more and more Chinese are becoming interested in high-quality beef from abroad. The growth potential of the Chinese beef market is therefore huge. Annual per capita beef consumption is currently 5 kg, compared to 20 kg in developed countries. Despite efforts to increase both domestic production and imports, 20% of China’s beef demand remains unsatisfied. This has given rise to smugglers hoping to cash in.
Some 12% of China’s beef supply is brought into the country via unofficial channels. In 2014, smuggled beef amounted to 970,000 tonnes, more than three times the legal import volume of 300,000 tonnes.
Smuggling groups come in all shapes and sizes. Some supply wealthy consumers, while others target the everyday shopper. Some move beef overland in trucks; others sneak it into ports from the high seas. Sometimes it is strictly a family business, while at others several partners and parties may be involved. But whichever way you cut it, beef smuggling is a big business. Arrests are made every month, but smuggling continues. Early this year, police in Chongqing broke up a family-operated ring that had made 200 million yuan in two years through smuggling 8,700 tonnes of beef.
Smuggled beef can be very difficult to discern from its legal counterpart once it goes on the market. Quality assurance is a real concern. With the return of US beef, Chinese consumers are hoping to see a reduction in smuggling. However this might simply be wishful thinking.
It will take time, and also trial and error, before the US can really open up the China market. At least for now, Chinese beef smugglers have dodged a bullet
The US beef industry has high expectations for China. Nebraska, one of two states eligible to participate in the China beef trade, hopes to export beef worth US$200 million a year.
For now, it seems that US companies are specifically targeting middle- and upper-class consumers – the people who are most interested in Western cuisine. Some of the first arrivals in China have been premium cuts such as prime rib and rib eye. Prices are not cheap. In fact, Chinese consumers hoping for lower prices with the arrival of US imports might end up disappointed. US prime rib beef is selling for 38 yuan per 180 grams while rib eye is going for 75 yuan and 200 grams of USDA prime cuts are retailing at between 158 to 178 yuan. To give some comparison, 180 grams of imported Australian prime rib costs 25 yuan. The average price for 500 grams of domestic beef is 30 yuan, while 500 grams of smuggled Brazilian beef (of unspecified cut) is only 12 yuan.
While a resumption of US beef imports will affect high-end beef smugglers, the rest are safe for the time being. The US seems to be focusing on Western dining aficionados instead of the average Chinese shopper, who wants affordable, lean cuts of shank, brisket, round steak, and of course, the all-time Chinese favorite — tripe. More importantly, red tape limits the quantity and pace at which US beef can move into the Chinese market.
The criteria for US exports, under the Sino-US bilateral agreement, are deeply constraining and “next to impossible” to meet, according to one experienced US industry insider. It will therefore take time, and also trial and error, before the US can really open up the China market. At least for now, Chinese beef smugglers have dodged a bullet.
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Beefeaters will likely to get Mad cows disease if the widespread smugglings are not curbed,
It is time chinese consumers be educate in discerning the different between caged animals as in Australia and America and free range animals rear at home. Import meat may look good but they are laced with chemicals unhealthy to human body.