Chinese Meat Industry & Economy Continue to Grow
ANALYSIS - Is the Chinese bubble about to burst? For some time now out of the BRIC countries - Brazil, Russia, India and China - China's growth rate has been not only one of the most rapid, but it has also been dragging the rest of the world economies along behind it - shining as a beacon to the faltering economies in Europe and the US, writes TheCattleSite Editor in Chief, Chris Harris.
21 December 2011
3 minute read
As the Chinese economy has been maintaining this rapid growth, so there has been a shift in the make up of the population. The shift has seen a growth in wealth and a growth in a middle class. The population has been moving to an urban way of living and out of the countryside.
The dynamic change in population and culture has also seen a change in eating habits. As with all populations where wealth grows, meat and protein diets start to replace cereals and crops.
Meat consumption in China reached around 59kg per head in 2010.
The International Monetary Fund forecasts that China's economy that spiked at over 14 per cent growth about four years ago, has now settled to a growth rate of about nine per cent.
The forecast for next year is that it will continue to grow at nine per cent, but according to Forbes, this does not take into account a potential collapse in the European economies.
"China's economic growth has been very good for quite some years," says Forbes. "The consensus forecast now is that 2012 growth will be right in line with the country's long-term growth potential of about nine per cent per year. However, there are five key issues to consider:
- Inflation fighting
- Housing bubble
- Export markets
- Cronyism
- Value of the Yuan."
On the back of this potential growth, the meat processing market is also developing and growing. It is being spurred on by new technology and the population is also changing the way it is eating meat.
More and more consumption is in the form of processed and pre-cooked products.
As the economy is growing by nine per cent, so the meat industry is virtually keeping pace with it.
An IBIS World report, published this month forecasts that the industry will develop at a rate of 8.3 per cent a year, reaching $82.38 billion in 2016.
Revenue from the meat processing industry in China this year is expected to have risen by 13 per cent year on year to $55.24 billion. On average, since 2006 the industry has seen a 22.5 per cent rise in value.
However, imports are also an important part of the Chinese industry and the IBIS World report shows that they are expected to reach $2.59 billion this year.
A lot will depend on how and whether the Chinese government can keep a cap on inflation. The latest figures show that inflation was running at 4.2 per cent in November, down from a July figure of 6.5 per cent.
If inflation is kept in check and the economy continues to expand, meat consumption is expected to increase and the meat processing industry develop - albeit at a slower place than over the past decade.
