Wang Yang stresses that the dairy product structure needs deep adjustment
On August 18, the 2015 China Dairy D20 Summit, themed “Quality and Safe Development, Revitalizing China's Dairy Industry,” was held in Beijing. Wang Yang, member of the Political Bureau of the Central Committee and Vice Premier of the State Council, attended the summit and delivered a speech, pointing out that further opening up China's dairy industry is an irresistible trend. On the one hand, the domestic dairy product structure must be deeply adjusted to meet the diverse needs of domestic consumers; on the other hand, foreign grass and cows should be actively used to produce milk for the Chinese people.
Wang Yang's speech was widely regarded by the industry as setting the tone for China's future dairy import policy. Dairy industry expert Song Liang interpreted this as meaning that the Vice Premier's instructions on imported dairy products can be understood as allowing moderate imports of dairy products while increasing imports of raw materials. The “moderate” imports may mean that dairy product imports will be tightened.
Public reports show that over the previous 5 years, China's dairy product imports had maintained a growth rate of more than 20%, reaching as high as 37% in 2013. In 2014, China's dairy product imports again grew by 17.9% year-on-year. On the one hand, there is the impact of imported dairy products; on the other hand, domestic dairy production costs remain high, raw milk prices fluctuate frequently, the profits of individual enterprises have declined, and cases of dumping milk and slaughtering cows have frequently appeared across the country.
Zhu Hangming, the newly appointed president of Bright Dairy, believes that because China's comprehensive dairy cattle farming costs are far higher than those of international peers in terms of land costs, environmental protection and other aspects, and it lacks international competitiveness, he suggests that the state further formulate and introduce support policies for dairy cattle farming. To reduce costs and resist market risks, dairy enterprises including Bright Dairy and Wondersun have extended toward upstream and downstream industries, and industrial integration has become the annual “keyword” for Chinese dairy enterprises.