March 10, 2017

The promise of Chinese food industry investments

Food is the new oil, and the increasing demand in enriching China for more food creates some great opportunities for overseas business parks and local governments targeting food economy.

The United States Department of Agriculture published an interesting study in 2015. The "China's growing demand for agriculture import" states (at the p19-20), that Chinese officials try to control the booming food import into the country.
"During 2013, the Chinese leadership set forth a new food security strategy that was reiterated in the Communist Party’s 2014 “Number One Document” on rural policy: a) Boosting domestic production capacity through investments in irrigation and other infrastructure, science and technology, and strong policy support, and b) Utilizing international markets and overseas resources in a way that ensures a dominant role for Chinese companies in the supply chain for imported commodities."
"Another objective of China’s food security strategy is to gain greater control over the supply chains for food imports via outbound investment by Chinese companies. Farmers Daily (August 2014) announced that Chinese President Xi Jinping advocated agricultural investment abroad as a way to preserve national food security and to support diplomacy. The strategy encourages Chinese companies to acquire assets in various stages of the supply chain for imported commodities to gain a larger share of profits for Chinese companies, establish reliable supplies for the Chinese market, and gain more influence over the determination of international prices. Authorities are investigating support policies for outbound agricultural investment that include subsidized loans, credit guarantees, a foreign agricultural development fund, subsidies for overseas trips, providing information about investment opportunities, and training courses."
Chinese food industry has the largest share in Chinese FDI to Europe, as Baker&McKenzie stated. Practically, the opportunity is given: the growing Chinese food import and its control by outward investments creates a unique way to attract new jobs and investments into your community. Just make yourself visible.