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One Man's Opinion: Get used to changes in China

Property of SeaFood Business magazine
By Peter Redmayne
September 01, 2008

The recent Olympics in Beijing gave China a chance to showcase its remarkable economic progress to 4 billion people around the world. Those fortunate Olympic attendees saw glittering new skyscrapers and shopping centers. The swarms of black bicycles that once clogged the streets of the capital are mostly gone now, replaced by some 400,000 new cars that hit the city's roads in the last year alone.

I've been visiting China for more than 15 years and the changes in the past two or three years that have transformed this economic juggernaut into an increasingly affluent society have been breathtaking. The changes in China are having a profound impact on the global seafood industry, some good and some not so good.

There's no escaping the growing influence China has on the seafood industry, since the country is both the world's largest seafood exporter and the world's largest seafood market. An increasingly affluent society that adores eating fish is good news for seafood producers looking for new markets.

Walk into a seafood restaurant in most major Chinese cities and you can order a smorgasbord of seafood from around the world. Australian lobster, Canadian geoduck, Norwegian salmon, South African abalone; well, you get the idea. The Chinese prefer imported seafood and they're increasingly able to afford it.

The Chinese are also big buyers of cheaper fish like pollock, chum salmon, cod, yellowfin sole, squid, ocean perch and Greenland 
halibut, which they turn into value-added products for export. Over the past 10 years or so, seafood buyers in Asia, North America and Europe have become addicted to this seemingly endless supply of low-priced products.

The key to the growth of China's big reprocessing industry, which is centered in the northeastern cities of Qingdao and Dalian, has been the country's vast supply of cheap labor. But here, too, China is changing.

Workers who used to cost $100 a month now cost $300 a month - if you can find them. Harder to find, more expensive labor, as well as a strong currency, have crimped the margins of China's secondary processors, who are finding they have no option but to pass on their higher costs. So you may as well get used to paying more money for reprocessed seafood from China.

Some companies that process seafood in China are considering moving some of their business to countries like Vietnam, which have cheaper labor. But countries like Vietnam are small compared to China and already a surge of new factories is pushing wages up there.

It will be hard to duplicate China's big value-added seafood industry anywhere else. China's biggest seafood processors are already adjusting to the new reality by investing in labor-saving technology they used to scoff at. But that costs money, which means down the road there will probably be fewer, but bigger, value-added seafood processors in China.

Change is a constant in China these days and there is little doubt that China's impact on the fish business will only grow with time. The challenge facing the global seafood industry is how to deal with it.

 

Contributing Editor Peter Redmayne lives in Seattle

 

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