| U.S.-China Bilateral Trade—Bilateral
trade in beef between the United States and China
is one facet of a complex trading relationship of
great importance to both countries. The United States
is currently China’s second-largest trading
partner, exceeded only by Japan. China, in turn,
is the fourth-largest trading partner of the U.S.(China
Internet Information Center 2003; CCPIT 2003).
Although much has been written
about the U.S. trade deficit with China, what
is not often mentioned is the rapid growth in
U.S. exports to China. In the ranking of export
markets for the United States, China rose from
21st in 1983 to 9th in 2001. Exports to China
have increased nearly 12 percent each year since
1990. According to U.S. Customs Data, U.S. exports
to China totaled US$19 billion in 2001 (US&FCS
2002). (For an explanation of China’s customs
data see U.S.-China Business Council 2003)
The Chinese economy has averaged
over 7 percent annual growth in the last decade
and continues to hold the lead in growth rate
among the world’s expanding economies. Although
China faces many economic and social challenges,
a rising standard of living, especially among
urban residents, and increasingly liberalized
trading policies, including those stipulated by
the WTO, are expected to increase demand for imported
products (US&FCS 2002).
US–China
Agricultural Trade—During the last
two decades, the United States has generally been
a net exporter of bulk commodities, primarily
soybeans, to China (USDA/ERS 2003a: Trade). Commodity
exports to China, however, have not been steady.
“Since the late 1970s, U.S. agricultural
exports to China have followed a roller coaster
pattern as China periodically buffeted grain and
oilseed markets with unexpected purchases or sales.
Wide year-to-year swings in China’s agricultural
imports add considerable uncertainty to commodity
markets. With its new membership in WTO, however,
China may become a larger and steadier trading
partner in markets for food and agricultural products”
(Gale 2002:1). The U.S. Embassy in Beijing reports
that U.S. agricultural exports to China in 2001
totaled US$2.0 billion. China’s exports
few agricultural products to the United States,
exporting only US$0.8 billion in agricultural
products to the United States in 2001 China Country
Commercial Guide 2002; Gale 2002).
|
U.S.-China
Beef Trade Trends, Current Issues—As
part of China’s accession to the WTO, China
has committed to reducing tariffs on beef each year,
from 45 percent in 2001 to 12 percent for beef and
beef variety meats by 2004. The USDA/ERS predicts
that this reduction, as well as the stabilization
of agricultural trade expected to result from WTO-related
policy changes, and a rising standard of living,
will lead to rising consumption of imported meat
in China (Gale et.al 2002). Although China is currently
ranked among the top five producers of beef in the
world, beef consumption by China’s huge population
also ranks among the top five. Increases in consumption
as well as demand for higher quality are expected
to gradually increase imports. The U.S. Meat Export
Federation (USMEF) predicts that Chinese beef imports
will nearly double by 2010. The USMEF notes, however,
that a 13 percent VAT will remain in effect and
anticipates this will “continue to constrain
legal importation” (USMEF 2003h). Smuggling
and mislabeling of beef are expected to be continuing
problems. Non-tariff barriers, such as unclear sanitation
requirements and cumbersome documentation procedures
may also continue to arise as items of negotiation
between the U.S. and China. In addition to animal
diseases such as bovine spongiform encephalopathy
(BSE) and foot and mouth disease (FMD), world events
such as war or the severe acute respiratory syndrome
(SARS) outbreak could also dampen economic activity
and lead to temporary periods of weakened demand
for imported beef in China.
Kansas-China Trade, including
Beef—China has ranked among the top
ten export markets for Kansas products for several
years. In 2002, China slipped from fifth to eighth
place but still received a significant number
of exports from Kansas. Although in some years,
manufactured products, particularly transportation
equipment, have dominated Kansas exports to China,
food products have generally played an important
role. In 1998, for example, food products accounted
for nearly 53 percent of Kansas exports to China
(USDOC 2000).
The total value of Kansas beef exported directly
to China has been increasing steadily. Kansas
beef exports to China in 2002 reached only about
US$3.16 million. About two-thirds of the Kansas
beef shipped to China in 2002 was frozen offal.
The remainder was primarily frozen meat, followed
by fresh or chilled meat. Statistics for the first
half of 2003 showed a sharp increase of over 200
percent from 2002 (MISER 2003). After the outbreak
of SARS in China in the spring of 2003, beef imports
to China reportedly dropped, as business plummeted
at restaurants and hotels, the major customers
for imported beef. Current news reports from China
indicate that the hotel and restaurant industry
in China is now recovering, and it is expected
that beef imports will resume and continue to
grow.
|
| China’s Beef Trade—China
is a net exporter of beef, although in very small
quantities in comparison with the United States.
Although China’s beef production expanded
rapidly during the 1990s, beef consumption also
increased dramatically during the same period. As
a result, beef exports from China declined by over
75 percent. In 1999, China’s beef and beef
product exports represented only about 1 percent
of the country’s total production (Brown 2002).
About half of China’s beef exports are to
Hong Kong. China also exports beef to Russia, Kuwait,
Egypt, and other countries. In 2001, China exported
a total of 21,423 mt (approx. 23,563 U.S. tons)
of fresh, chilled and frozen beef (USDA/FAS 2002b).
US-China Beef Trade—Beef-related
products play a major role in U.S. agricultural
exports to China. The top ten U.S. agricultural
exports to China in 2000 included hides and skins,
red meats-fresh/chilled/frozen; and dairy products.
China currently imports a growing quantity of
beef from the United States. According to U.S.
customs data reported by the USDA Foreign Agricultural
Service (FAS), the United States exported 3,539
metric tons (approx. 3,892 U.S. tons), of beef
and 3,372 metric tons (approx. US. tons) of beef
offal to China in 2001 (USDA/FAS 2002b). In 2002,
U.S. beef muscle meat exports to China and Hong
Kong rose 78 percent in the first eight months
of the year (Angus Beef Bulletin). Due to the
devastating impact of the SARS (severe acute respiratory
syndrome) outbreak on the hotel and restaurant
industry in China in the spring of 2003, beef
exports to China dropped off. As the retail economy
in China recovers, U.S. beef exports to China
are expected to rise again.
U.S. beef figures prominently in China’s
total imports of beef. According to China Customs
data, in 2001 China imported a total of 3,768
(approx. 4,149 U.S. tons) of beef, including 1,848
metric tons (approx. 2,039 U.S. tons) from the
U.S., the top source of imported beef that year
(USDA/FAS 2002b). China Customs reports a much
larger total for beef and beef variety meats (offal)
from the United States. FAS explains the huge
discrepancy with U.S. government data as a reflection
of the practice of representing imported offal
in China as a U.S. product to avoid quarantine
restrictions on European and South American countries.
Domestic meat is now sometimes also represented
as a U.S. import, due to the higher quality reputation
of U.S. meat (USDA/FAS 2002b).
The United States government tracks trade statistics
for Hong Kong and Taiwan separately.
U.S.–Hong Kong
Beef Trade—Hong Kong beef imports
include meat for local consumption by Hong Kong’s
6.8 million people and supplies for re-export,
particularly to mainland China (about 18 percent
of beef and 74 percent of beef variety meats in
the first 8 months of 2002). In 2001, Hong Kong
imported 32,368 metric tons (approx. US. tons)
of beef (USMEF 2003h) and 26,898 metric tons (approx.
29,587 U.S. tons) of beef variety meats (USMEF
2003h). Of these imports, 12,206 metric tons (approx.
13,426 U.S. tons) of beef and 8,863 metric tons
(approx. 97,493 U.S. tons) of beef offal were
imported from the United States (USDA/FAS 2002b).
It is worth noting here that the USMEF reports
only 8,164 metric tons (approx. 8,980 U.S. tons)
of beef and 619 metric tons (approx. 680 U.S.
tons) of beef variety meats imported from the
U.S. during that period. Reliable trade statistics
on re-exports to China have been difficult to
obtain, due to the prevalence of smuggling and
the mislabeling of country of origin on beef products
to avoid quarantines. This is expected to diminish
somewhat as WTO rules and greater efforts to control
smuggling allow for more direct meat imports into
China (USMEF 2003h). It is hoped also that more
direct exports to China will allow consumers and
importers in China to develop greater ability
to distinguish authentic U.S. beef products (USDA/FAS
2002b).
U.S–Taiwan Beef
Trade—Taiwan’s beef supply
is primarily imported. Beef imports to Taiwan
in 2001 totaled 56,904 metric tons (approx. US.
tons). In that year, the U.S. exported 10,854
metric tons (approx. US. tons) of beef and 1,043
metric tons (approx. US. tons) of beef offal to
Taiwan and was Taiwan’s third highest source
of beef. Taiwan’s accession to the WTO in
January 2002 liberalized imports of variety meats,
and imports in this category are expected to grow.
Australia may remain the top exporter of beef
to Taiwan, however, due to lower shipping costs
(USMEF 2003k).
|
Kansas beef exports to Hong
Kong, some of which are reshipped to mainland
China, are currently more significant. In 2002,
Kansas shipped over US$11 million in beef exports
to Hong Kong. The largest category of that quantity,
at over US$8 million, was frozen beef, followed
by frozen offal, at over US$2 million. Kansas
beef exports to Hong Kong decreased by small percentages
in 2001 and 2002, possibly a reflection of an
increase in direct shipments to mainland China.
In the first half of 2003, shipments of Kansas
beef to Hong Kong fell by over 45 percent, probably
a result of the SARS outbreak, which hit Hong
Kong earlier than mainland China and had a devastating
impact upon the Hong Kong economy, particularly
the retail and restaurant industries (MISER 2003).
As in China, however, the current news indicates
that customers have returned and these industries
are now recovering.
Taiwan is also a significant
customer for Kansas beef. In 2002, Kansas exported
over US$7.8 million in beef to Taiwan, most of
which was frozen beef, in addition to smaller
amounts of fresh or chilled meat and frozen offal.
Kansas beef exports to Taiwan for the first half
of 2003 had increased over 80 percent (MISER 2003).
Although the hotel and restaurant industry in
Taiwan also suffered from the SARS outbreak, as
in other similarly afflicted areas, the industry
currently appears to be recovering.
|
