China

With over 1.38 billion people, China is the most populous country in the world and the fourth-largest country by area. From a fish and seafood perspective, China is unique as it is the world’s leader in marine and inland fisheries as well as aquaculture production. The country’s seafood production is supported by 14,500 km of coastline bordered by the Yellow Sea and the Korea Bay in the north, the East China Sea in the center and the South China Sea and the Gulf of Tonkin to the south. In terms of fresh water, China is home to 196,000 km2 of inland waters and reservoirs, and 74,550 km2 of river area including the Yellow and Yangtze rivers. Despite this wealth of natural resources, domestic production is insufficient to meet China’s growing demand for fish and seafood from the growing number of middle-class households. As a result, China has become, as of 2014, a net importer of fish and seafood rather than being a net exporter. Part of the imports are processed and re-exported but an increasing share of the imports are sold to domestic markets. In an effort to meet demand, China has developed the largest distant water fishing fleet in the world and therewith goes beyond the traditional trade networks of solely import and export. To support these expanded networks, China has instituted a trade policy known as the Maritime Silk Road, which is a trade route by sea to match the ancient Silk Road trade route by land. The trade route seeks to encourage trade links between China and overseas partners for fish and seafood products.

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Carson Roper
Carson Roper
Country Expert: China

China's seafood sector

China’s role as the leader in the seafood industry is indisputable. Total production of capture fisheries and aquaculture reached an approximate 62 million metric tonnes (MMT) in 2015. 45.5 MMT of this production was derived from marine (38%) and freshwater aquaculture (62%). Marine and inland fisheries were responsible for 14.8 MMT and 2.3 MMT respectively (FAO, 2016). In 2014 the Chinese fleet consisted of 686,766 decked and 378,553 undecked vessels operating in national and international waters. 2,460 of these decked vessels are operating as a long distant fleet and were responsible for 2 MMT of the landings. Aquaculture production covered an area of 8.39 million hectares of which 27% was marine and 73% was freshwater (CAPPMA). Official FAO statistics indicate that 9 million people are active as fishermen and 5 million as fish farmers. 70% - 80% Of the total aquaculture farmers are small-scale operators supplying local and regional markets, while medium and large operators tend to serve the export markets. The actual ratio between small and large-scale farmers, however, differs per sector and depends on factors like farmed species, farming method, and destination market. National consumption of fish and seafood was estimated at 37.9 kg per capita in 2013. The primary fishery and aquaculture industry constitutes about 3% of China’s GDP and agriculture is estimated at 8.9% of GDP.

Aquaculture and Fisheries production

Source: FAO (2016)

Capture fisheries production in China has shown consistent growth since 2003, with a 6% increase from 2013 to 2014. However, it is widely acknowledged this growth cannot be sustained. In fact, in 2014 China posted a year-on-year slight decline of 0.5% in inland capture fisheries (FAO). China's distant water fisheries have been nurtured to help increase fisheries landings and constitutes a fleet of 2,460 vessels which produced 2 MMT in landings in 2014. Aquaculture growth has

been more pronounced with production increasing 62% between 2005 and 2014 (FAO). This figure does not include the growth of aquatic plants which increased 40% during the same time frame.

Future growth of aquaculture in China will be dependent on a number of issues. The most important issues are water quality and water allocation priorities; cost and availability of fishmeal; cost and availability of fishmeal alternatives (e.g. soy); and disease. Trade too becomes important as demand for traditional export products such as tilapia has decreased leaving the sector with an overcapacity. Additionally, negative foreign (and domestic) press has hounded the shrimp, tilapia and other aquaculture sectors with allegations of antibiotic abuses and food safety violations. For now, in acknowledgment of these issues, industry leaders have urged a shift in emphasis away from a growth/production based agenda to an agenda of quality and sustainability. Within this context, it is reasonable to expect a decline in overall sector growth.

Production per species in 2014 (volume)

Source: FAO (2016)

When China's fish and seafood production is divided by production type, the importance of and dependency upon the aquaculture sector becomes readily apparent. The ratio of cultured fish and seafood is 80% to 20% wild capture fish and seafood. Cultured freshwater fish contributes to approximately 34% of China’s total annual production. The vast majority of this are carp species (over 70%), which are consumed domestically. In 2014, production of carp in China was

roughly 19 million metric tonnes or 42% of total aquaculture production in China. Carp and tilapia are forecasted to grow around 5% per year globally through 2018, but this growth rate may be optimistic for tilapia given issues with disease and lack of export demand.

The marine capture fisheries account for 20% of total production and catch over 150 species, like anchovy, black scaper, chub mackerel, cuttlefish, octopus, scallops and squid. Scallops and squid are particularly important species for export. There are 51 fishing ports which record landings in China and 8 primary fishing provinces. Since 1985 China has been building a distant water fishing fleet to compensate for the gap between domestic demand and production of the domestic fleet.

Cultured crustaceans make up 17.7% total seafood production and include species like crab, crayfish and shrimp. The overwhelming production (95%) of crustaceans (along with finfish) is done in the Southern half of China in the Yangtze and Zhujiang river basins. Cultured aquatic plants account for 17.6% of total seafood production.

Seafood export markets

Source: Trade Map (2016), International Trade Centre, www.intracen.org/marketanalysis

China is the world’s largest exporter of fish and seafood products, which were valued over US$ 19.5 billion in 2015. Japan is China’s greatest trading partner, followed by the United States, Hong Kong and the European Union. The majority of exports are composed of fish fillets, prepared and preserved fish, crustaceans, molluscs and invertebrates and frozen fish. In addition to exporting domestically

produced fresh water and marine products, a large part of Chinese exports consist of re-processed products.

The ports of Dalian and Qingdao are important processing centers, especially for (white)fish, which is then exported as twice frozen fillets and other products such as blocks for further processing (breading). The advantage of Dalian and Qingdao has been a low labor cost, however this is changing rapidly in recent years as labor costs have risen significantly. Already, a major European whitefish company Esperson, has closed a plant in China and moved to a location in Vietnam. Other European companies are turning to what is now a competitive labor base in Eastern Europe. Due to the uncertainty of China's processing industry its ability to adapt to rising labor costs and other developments like the current political situation in the US, it can be expected that exports from Dalian and Qingdao to Europe and the US will decline in the coming years.

In the future, China's Maritime Silk Road policy will seek to strengthen trade ties with neighboring ASEAN countries. Also, additional infrastructure improvements such a rail service to Europe are now in service to promote trade. What's important to remember is trains and ships run in both directions, thus they are vital links to carry goods back into China. China became a net importer of fish and seafood in 2014, and imports are expected to increase further as China's population continues to grow.


Export product composition 2015 (US$ mln)

Source: Trade Map (2016), International Trade Centre, www.intracen.org/marketanalysis

By value, fish fillets contributed over one-fifth to the total export volume in 2015, with a value of US$ 4.284 billion. This figure is heavily driven by the processing of imported whitefish from Russia and the United States in Dalian and Qingdao as well as farmed tilapia in the south. Molluscs (primarily cuttlefish, scallops and squid) contributed just over 17% with a value of US$ 3.415 billion. Prepared and

preserved fish, crustaceans, molluscs and invertebrates contributed together over 31%, frozen fish almost 13% and crustaceans 8.8%.

There are at least two important trends which will likely affect the Chinese export product composition in the future. First, the middle class in China is growing and will increase domestic demand for fish and seafood products. The increased demand will focus especially on high value species such as shrimp and tilapia resulting in less availability for exports. A second trend is rising labor costs in China. An increase in the cost of labor is causing the whitefish-processing sector to seek lower cost alternatives such as Vietnam and Eastern Europe. This will lead to a decrease in the imports into China and exports of whitefish from China destined for the US and Europe.

Certifications

Last updated: 01/01/2017

  • Aquaculture Stewardship Council (ASC)

    Species Number of Farms Total Volume (MT)
    Tilapia 5 5,967
  • Best Aquaculture Practices (BAP)

    Species Number of Farms Total Volume (MT)
    Tilapia 71 147,839
    Shrimp 13 26,228
  • GlobalG.A.P.

    Species Number of Farms Total Volume (MT)
    Tilapia 1 NA
    Shrimp 2 NA
Trade and Investment regulations

China scores 78 out of 190 on the World Bank its Doing Business In Index. This section will provide you with all up to date need to know information about trading and investing in seafood in China. The following topics are covered: click the links below to learn more!

  1. GSP facilities and Free Trade Agreements
  2. Setting up a representative or branch (service company) office
  3. FDI regulations and setting up a subsidiary company
  4. Taxes and duties
  5. Custom procedures
  6. Arbitration law
  7. Cultural do’s and don’ts

Do you want to expand or start business in China? Contact us!

Sector support programs

Programmes currently being implemented

  • Intensive Pond Aquaculture (IPA)

    The U.S. Soybean Export Council together with Auburn Univerisity and Wujiang Municipal Aquaculture Co. Ltd. (Wujiang) launched the Intensive Pond Aquaculture (IPA) initiative in China in 2013. This ongoing initiative involves the creation of intensive pond raceway systems, also known as a flow-through system. These raceways allow for greater stocking densities, as well as the removal and re-use of solid wastes associated with fed carp aquaculture.

    U.S. Soybean Export Council, Auburn Univerisity and Wujiang Municipal Aquaculture Co. Ltd. (Wujiang)
  • Responsible Aquaculture Foundation

    The Responsible Aquaculture Foundation's mission is to deliver an innovative global knowledge transfer platform/mechanism to enable the responsible development of a sustainable global industry that can meet the demands for nutritious, safe aquaculture products. The Responsible Aquaculture Foundation has launched online courses for aqua-culturists in treating shrimp disease and water quality. All courses are available in English, courses in managing early mortality syndrome (EMS) at hatcheries and farms are available in Chinese.

    Responsible Aquaculture Foundation
  • Hainan Tilapia Aquaculture Improvement Project (AIP)

    The Hainan Tilapia Aquaculture Improvement Project was launched in 2007. The project is part of the Sustainable Fisheries Partnership and enjoys the support of the Sustainable Trade Initiative (IDH). The Hainan Sustainable Tilapia Alliance and the Code of Good Practice are outcomes of the AIP. The project is ongoing and is currently implementing the code at 35 pilot farms.

    Sustainable Fisheries Partnership
  • iBAP Program

    The iBAP program is a precursor to Best Aquaculture Practices (BAP) certification (the “i” representing “improver”). It’s an opportunity for aquaculture facilities to be recognized by the marketplace as they improve their practices. The iBAP program provides the encouragement and incentive necessary to apply for BAP certification. Facilities that enroll in the iBAP program receive the technical support required to apply for BAP certification and agree to a step-by-step, deadline-driven plan. As less than 10% of global aquaculture production is currently third-party certified, the iBAP program opens doors for retail, restaurant and hospitality chains to source more responsibly farmed seafood. There are currently 12 tilapia facilities in the iBAP program in China as part of the Sunnyvale farm group (a division of Zhanjiang Guolian Aquatic Products Co. Ltd.).

    Global Aquaculture Alliance (GAA)
  • Squid Fishery Improvement Program (FIP)

    Initiated in 2012, by Sustainable Fisheries Partnership and the US based Beaver Street Fisheries, this FIP has blossomed into a multi-stakeholder platform which includes the Asia Pacific Squid Supply Chain Roundtable, the Shantou Ocean and Fishery bureau, Chinese squid industry sector representatives, NGOs and researchers. Now spearheaded by the China Blue Sustainability Institute the FIP has an action plan focused on better squid fisheries management.

    Sustainable Fisheries Partnership and Beaver Street Fisheries

Species in China