Strengthening distinctive agricultural products is the fundamental way to resist shocks

With the development of economic globalization and trade liberalization, China has become a major importer of beef and mutton. In recent years, in addition to the continuous expansion of import scale, international trade has also shown some new changes and new characteristics: fresh food e-commerce is making its first trial, and cross-border direct procurement has become possible. Faced with many new changes and trends in imports, how beef and mutton enterprises should respond and how the domestic industry should develop deserve further reflection. The pattern of imported beef and mutton shows new characteristics --

Import sources are expanding, and price competition is fierce. In recent years, with strong consumer demand, the source countries for beef and mutton imports are continuously expanding. Since 2012, China has resumed beef and mutton imports from Argentina, Brazil, Chile and Mongolia, and in 2015 it also held negotiations on import issues with the United States, the United Kingdom, France, Ireland, Namibia, Russia and other countries. As import competition intensifies, the prices of beef and mutton imports have maintained a downward trend. According to customs statistics, as of July 2016, the average import prices of beef and mutton in China had fallen by 8.6% and 27.4% year-on-year respectively.

Importing live cattle for slaughter has become a new import model at present. Last August, China and Australia reached an agreement on importing Australian commercial live cattle for slaughter, and Australia will export 1 million live cattle to China each year. The General Administration of Quality Supervision, Inspection and Quarantine has selected Fengdu in Chongqing, Ningbo in Zhejiang, Luohe in Henan and other places as the first batch of pilot destinations for "Australian cattle" imports. Because live cattle imports require the establishment of isolated pastures and supporting facilities needed for purchasing live cattle, the operational level is still being explored. If there is a certain advantage in future market competition, the scale of live cattle procurement is expected to expand.

"Foreign breeding, Chinese people eating the meat" -- cattle and sheep enterprises step up overseas mergers and acquisitions. As domestic production costs rise and industry competition intensifies, capable domestic meat enterprises have begun to lay out in overseas markets one after another. Through overseas mergers and acquisitions, they can not only obtain high-quality, low-priced raw material resources, advanced technology and management experience, but also help increase the visibility of local brands in overseas markets and advance the internationalization process of enterprises. This model of "foreign breeding, Chinese people eating the meat" has become one of the current new import models.

Fresh food e-commerce is making its first trial, and cross-border direct procurement has become possible. Fresh food e-commerce is called China's next hundred-billion-level e-commerce market. As of now, the number of national cross-border e-commerce pilot cities approved by the State Council has increased to 10. At present, cross-border e-commerce import methods are divided into two types: one is delivery from bonded warehouses in free trade zones, and the other is overseas direct purchase. Cross-border e-commerce has high requirements for storage, transportation and cold-chain logistics. Major e-commerce companies are all competing for the fresh food market share, and the product quality they provide varies. If cross-border e-commerce is to continue, logistics cold chains still need development.

Implications for the domestic industry --

There is no need to panic excessively over the threat of imports. From a structural perspective, frozen meat accounts for more than 96% of China's beef and mutton import structure, while chilled fresh meat accounts for only 4%. According to China's consumption habits, the market for hot fresh and chilled fresh meat still dominates. Foreign imported "frozen meat thawed to resemble fresh" differs greatly in taste from fresh meat and cannot truly replace domestic fresh beef and mutton.

Ensure the quality of domestically produced meat and develop local distinctive products. In the face of the import shock from foreign products, we need even more to highlight our own advantages and develop local distinctive products. Carry out origin protection for China's excellent local beef and mutton resource varieties, achieve traceability of quality, and ultimately realize high quality and high price for products. In addition, publicize China's mutton cooking and dietary culture externally, increase the value of processed products and build brands.

Make full use of imported raw materials to produce high-value-added products. Make full use of imported raw materials to produce high-value-added products, such as steaks, ready-to-eat products and so on. Process imported frozen beef and mutton according to use after thawing. Treat live animal imports as an integration of cattle by-products and beef products, and according to the various parts of live cattle, carry out deep processing of by-products such as hides, internal organs, bones and blood, and develop and sell products of different grades and types. This can not only reduce the cost of imported live cattle, but also export high-end products to neighboring countries.

Improve the import system and mechanism, which is conducive to industrial transformation and upgrading. As for the shock of imported products on the domestic industry, the price advantage of low-price competition can only have a certain impact in the short term. To gain long-term competitive advantage in the global market and achieve sustainable development, domestic enterprises must accelerate industrial transformation and upgrading, adjust product structure and focus on improving quality. At the national level, the import system and mechanism should be improved, and comprehensive governance of smuggling and counterfeit products should be strengthened to maintain a normal and healthy market competition environment.