No country will influence seafood into the future more than China so when a well-researched paper is made available, we need to read, learn and start considering how it will impact our own businesses and countries
Roy D. Palmer, President Association of International Seafood
No country will influence seafood into the future more than China so when a well-researched paper is made available, we need to read, learn and start considering how it will impact our own businesses and countries.
When given the opportunity for expanding business there would be few seafood producers globally who would not take notice so let us take a look at the paper “China at a Crossroads: An Analysis of China’s Changing Seafood Production and Consumption” written by eleven researchers covering China, Sweden, USA, Australia, Malaysia and Canada and representing many global organisations.
The paper communicates some of the choices that China has and the implications for the other countries and typically calls for more finite research despite highlighting that there can be little doubt that China appears to be on a trajectory toward increased seafood sourcing outside its borders.
These pathways have to be considered in the context of global seafood production trends, where many countries around the world need to strongly consider their own seafood food security. Whilst some would be facing similar limits to domestic production as China their current solution is increasing imports. This is only feasible if production surplus exists elsewhere and nations possess the purchasing power to acquire it. We know that the world may be approaching the constraints of a finite, global, wild seafood production capacity and the only potential increases will come from aquaculture.
On trade the report states China is already the world's largest seafood and fishmeal importer by volume. Any increase, and they predict 2030 projections, will have implications for seafood availability and markets in the rest of the world.
Of course, imports do not tell the whole story, as the research states ‘China's current role in the global seafood system is primarily as a value-adding hub, with a large portion of the seafood imported simply passing through the country via various value-adding processes’. This product is then regularly exported rather than consumed within China. This is what makes China a “seafood trade giant” and explains the value-based trade surplus that is recorded.
In fact, the document indicates that currently China's fisheries imports are not contributing significantly to domestic consumption (with the exception of the fishmeal used for domestic aquaculture production).
The analysis undertaken by the researchers concurs with others predicting a likely increase in imports of the commodities that are currently primarily re-exported, such as salmon and whitefish, however, increasing Chinese demand will compete with other large consumers, such as the EU and the US. This is proven by current trade data.
This will likely ensure that China will pull more imports from Asia as price differences between the main buying markets (EU, the US, and China) are declining, and regulations relating to anti-dumping, labour standards, and illegal, unreported, and unregulated landings are less harshly applied in China than in other major importing nations. This move will impact on the availability of supplies for other countries.
Over the last few years of tariff exchanges and import bans between China and other nations (notably the US and Norway) have impaired trade and relationships but these developments may increase the likelihood that trade flows are redirected to China should its demand rise. Additionally, the current pandemic is having an immense impact on seafood supply chains everywhere, with dwindling demand, and effects on production and supply chain logistics. Consumer food safety concerns have also come to the fore in seafood trade again, an issue particularly raised in China with a number of food products reportedly found with C-19 (but seen as unlikely by science). The long-term effects of this turmoil on seafood trade patterns is uncertain but will affect both imports and exports.
The second sourcing strategy is to harvest it in your own country. The report emphasises that while current targets suggest a decline in deep water fisheries, this mode of securing raw material may once again come to play a key role. There is some confusion over the exact number of China's deep water fishery vessels, China is already estimated to account for the biggest share of catch in the high seas, and like many nations its fleet is heavily subsidized. Plans to modernize the fleet could improve profitability, and reduce energy use and negative climate impact, but the increased efficiency could also create or enhance overcapacity and threaten already dwindling stocks in other nations' EEZs and areas beyond, which are not currently safeguarded by adequate regulation and enforcement. An increased deep water fisheries presence would align with Chinese ambitions of increasing sea power but could damage the efforts being made to appear as a responsible global actor worthy of international leadership. Fuel prices as a result of climate change policies could also impact all deep water fishery expansion possibilities. Much to be discussed here and strangely the report does not touch on potential of increased aquaculture production. From previous reports we have learned that there are limitations in China, but we also know that huge RAS systems are being built and the land opportunity has great potential. So far its more theoretical than profit proven but there is a large amount of funding going into this area so likely just a question of scale and time.
The third path to sourcing food supplies is by investing in production in other countries. The China Belt and Road Initiative provides the overarching framework for this possibility, and large foreign direct investments are already deployed to this end. Chartered access to fishing grounds is discussed as another pathway projected to become more common in the future, and recent corporate attempts at acquisitions signal Chinese efforts to take control of key fish meal supplies abroad. Some of these large-scale overseas investments in seafood production could arguably offer employment and development opportunities in receiving nations but the environmental and social impacts of Chinese business practices are poorly documented and remain a topic of intense debate. Many wild stocks in the high seas and in EEZs of developing countries remain poorly understood and managed, and the environmental impacts associated with intensive aquaculture in China are likely to be replicated in settings lacking strong governance to ensure social and environmental sustainability.
The researchers point out that production and sourcing decisions in the Chinese fisheries and aquaculture sector are naturally influenced by specific policies for the sector, but also by larger national policy goals. Until recently, Chinese national policy was focused on pursuing economic growth, food security, and social stability. Although broadly successful, this approach has come at the expense of severe domestic environmental degradation. The response by the central government has therefore been to shift toward slower-paced, but higher-quality economic growth, considering environmental sustainability. In 2007, the Communist Party of China (CPC) announced a policy of “building an ecological civilization”—a post-industrial civilization more in balance with the environment. The “eco-civilization” policy was later enshrined as one of the five pillars of “socialism with Chinese characteristics” in the 2018 constitution.
Policy in the China seafood sector, they say, has mirrored this national-level development, as evident through the “Marine Ecological Civilization Building Policy,” announced in 2015. Whilst the Chinese political discourse has experienced a significant “greening” recently, economic development and national rejuvenation remain important sources of legitimacy for the CPC and were the two key goals president Xi Jinping laid out in his 2017 address to the CPC National Congress. Thus, it is important to consider these priorities in any evaluation of future seafood production and consumption scenarios.
Especially relevant for an understanding of China's role in the future global seafood system is how the growth of China's ocean economy is promoted as a way to offset slowed economic growth on land and as a source of new resources. The central authority has long viewed economic development as a means to ensure social stability and to help achieve the goal of a “moderately prosperous society” by 2020. This policy dates back to the “reform and opening up” period instituted by Deng Xiaoping in 1978, with high growth rates in production (including food) as central features.
However, blue growth would also further China's ambition to regain its position as an international leader. The “Belt and Road” Initiative is pursued, in part, with the ambition to build China into a “maritime power.” Investments are currently being made to advance scientific and technological capabilities to contribute to the “blue economy”—another pathway to enhance China's global prestige, and thus national rejuvenation.
What you get from this brief review of concurrent political narratives shaping Chinese policy development is an inherent tension between economic and sustainability goals. In the coastal domain, this tension is exemplified by the trade-off between expanding sectors of the ocean economy, such as seabed mining, and their negative effect on production capacity of China's fishing and aquaculture sector through degradation of fishing grounds, environmental quality, or competition for space.
These are the issues facing many countries but the decisions that China makes moving forward will impact other countries like no other. Trade is important but every country should take heed of the warnings – not only from this report but also from the implications from the current virus supply chain concerns.
All countries should be embracing blue economy strategies and putting a heavy emphasis on seafood harvest activities/actions to ensure food security and having the best nutrition for their community’s future. Failure to address this will put food security and nutrition issues on the backfoot!