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One Man's Opinion: China, an economy on steroids
By Peter Redmayne
July 01, 2006
You have to travel around China these days to truly
appreciate that this country's economy is on steroids. Words
alone can't begin to describe a red hot GDP that is barreling
along at a rate of 9 or 10 percent year after year. You have to
see it to believe it.
In cities big and small (at least by Chinese standards),
forests of construction cranes dominate the horizon. Massive
new upscale apartment developments with names like Elite City
are rising, built upon the rubble of housing that once
sheltered legions of humble workers. New airports, built only
five years ago, are suddenly inadequate, and sprawling new
terminals are again under construction around the country.
Outside the cities, more shining new factories open daily,
sporting names of the world's biggest companies. Industries
around the world have decided that China has to be part of
their business strategy. And the seafood industry is no
exception (see "China tips the scales," Top Story, June SFB
Last year, China's global seafood trade reached $12 billion,
an increase of almost 20 percent in just one year (since 2001,
China's seafood trade has doubled). In reality, however,
China's seafood trade is considerably higher. Chinese companies
routinely route high-priced seafood imports like live lobster
through Hong Kong, where they are smuggled into China to avoid
tariffs that are still high enough on luxury seafood to make
smuggling worth the risk.
Meanwhile, much of the seafood that is imported directly
into China is undervalued on customs documents, so importers
can pay lower taxes and get an advantage in a very competitive
Almost all of the world's big seafood companies - familiar
names like Trident Seafoods from the United States, Maruha and
Nippon Suisan from Japan, Icelandic from, yes, Iceland - have
major presences in Qingdao and Dalian. These two cities in
northeastern China dominate China's reprocessing industry,
which processes seafood from around the world into a growing
array of increasingly sophisticated value-added products.
Take a look in the frozen-seafood retail case and you may be
surprised how much of that seafood was caught off U.S. shores
and shipped to China and then back. The recovery of the Alaska
salmon industry is due in no small part to China's voracious
demand for inexpensive chum and pink salmon. The market for
these salmon, canned or frozen whole, was stagnant at best
until the Chinese stepped up to the plate and started paying
cash for any fish they could get their hands on.
Wondering why the cost of Alaska H&G cod has shot
through the roof? Look no further than China.
While demand for raw material for exports has soared along
with the number of seafood factories, China's increasingly
prosperous population is eating more and more seafood, too.
Fortunately, China is a prodigious producer of some 30 million
metric tons of seafood a year, almost 25 percent of the world
total. But no one believes China can keep up with its own
growing demand. By the year 2020, one study estimates, China
will need an additional 20 million metric tons of fish for
Depending upon your perspective, China's increasingly
dominant role in world seafood trade may be either a curse or a
blessing. Regardless of your view, however, when it comes to
China, seafood companies around the world are going to have to
learn to live with the consequences.
Contributing Editor Peter Redmayne lives in Seattle