China is difficult to describe, impossible to visualize if you've never been there. You must feel it, see it, smell it, become enveloped in it, mix with her people.
Whether a tourist or a businessperson, you must take your time to experience the complex forces that shape and drive the country shrouded in fascination and mystery.
One visit is not enough. Still, I can offer this glimpse of China from my two-week visit.
* An over 4,000-year history; the longest period of continuous recorded history in the world.
* The third largest land mass in the world, 3.7 million square miles, where they grow food for 20% of the world's people on 7% of the arable land; only Canada and Russia are larger.
* The largest population in the world (about 1.2 billion people); one in five human beings are Chinese, nearly 75% living along the country's eastern seaboard.
* "Mianzi" or "face" in Chinese is the principal measure of a person's reputation and dignity. To "lose face" is to lose honor and dignity.
* A land where the ancient philosophy of Confucius (teaching respect, selflessness, obedience and sense of community) bumps up against capitalism and all the trappings that goes along with it.
* Communism and capitalism coexisting.
* Cell phones ringing everywhere.
* Bamboo scaffolds encircling modern skyscrapers under construction.
* Tiny garden plots and grass huts nestled amongst giant apartment buildings.
* Traditional meals which are enjoyed in large groups; where anything and everything is prepared fresh, presented on a platter placed on a lazy Susan at the center of the table.
* 400 to 500 million hogs raised annually - at least 85% raised in households with 20 pigs or less per year.
* A per capita consumption of pork of about 70 lb./person.
That's China! Or at least as much of it as I could absorb during a two-week trade study tour. Sponsored collectively by National Swine Registry (NSR) and USDA Foreign Agriculture Service (FAS), the tour was supported by funds earmarked for foreign market development. Additional funds were provided by U.S. Livestock Genetics Export Inc. (USLGE), a consortium of purebred livestock organizations that pool funds under the Market Access Program (MAP).
The tour was coordinated by Tony Clayton, NSR International Marketing Director and president of Clayton Agri-Marketing Inc., Jefferson City, MO, and Todd Meyer, DVM, country director with the U.S. Grains Council (USGC), who has lived and worked in China for 10 years. Iowa State University extension specialist Tom Baas and University of Georgia swine geneticist John Mabry also participated and presented seminars on pork quality and breeding and selection programs, respectively.
China's Pork Industry Estimates of China's pig inventories bounce around a lot. The most current Chinese government-sponsored census is for 1996. Just this past February (1999), the data was adjusted down over 20% to 363 million pigs, according to a U.S. Meat Export Analysis and Trade News report.
More current estimates of production and trade, provided by FAS, project annual production near 500 million head (see Table 1). The report verifies the majority of China's hogs are raised in small rural households (see Table 2).
The USGC's Todd Meyer explains it is common for a village to share a community boar. "It is not unusual to see a guy walking a boar down the street to breed a sow," he says. Also, some animal husbandry stations keep a couple of boars for collection and artificial insemination (AI) of native sows. Leaner, more muscular boars are selected to upgrade the growth and carcass characteristics of the domestic lines.
In many areas of China, these backyard pigs supplement a family's income. These "village" hogs are fed roots, table scraps and a little rice bran. With no housing costs, a slight charge for inseminating the sow and a little starter feed, a Chinese farmer can make a few renminbi (RMB, China's currency) selling to a specialty market.
But like other parts of the world, as people upgrade their lifestyles, find job alternatives, they give up the pigs. "They just can't make much money raising pigs anymore," explains Meyer. "One out of three years they will lose money."
Meyer describes the AI methods used by these village pork producers as "fairly primitive." A small, flexible, rubber tube is used to deposit about 20 cc's of extended semen into the sow's reproductive tract. "These animals are extremely prolific so that's how they get by with this fairly primitive AI. They usually get good-sized litters," he adds.
Hog Expansion The Chinese are big pork eaters. There was a time when 90% of the meat they consumed was pork. Today, about 70% of the meat they eat is pork. Like most cultures, the Chinese will diversify their diets when they can. Chicken, in particular, seems to be gaining favor. Beef and more fish will be added, too.
Pork quality becomes a moving target in China. They do not use "Americanized" measures, Clayton observes, adding: "There's a high amount of fat in the Chinese diet; there's a certain amount of fat that they like to cook with, and eat."
If the current estimates of hog numbers are relatively close, it is apparent that China's hog industry is growing. Some estimates indicate an increase of 100 million head in just the last five years, effectively matching total annual production in the U.S. Meyer is a little skeptical of the figure. "No doubt the industry has expanded, but the rate is not clear. (Pork) expansion has been slower, on a percentage basis, than poultry, aquaculture and beef," he adds.
Meyer sees consistent growth in backyard and small commercial producers with several hundred pigs raised per year.
"In terms of growth, they probably don't need much more," says Meyer. "But, they do need to get higher yields - lean meat yields and better performance - to get more out of their inventory."
Feed, Marketing Policies "It is not a unified system - whether you talk about production or the market," Meyer says.
The government's high-priced grain policy creates a key obstacle. Domestically raised corn is not tied to the world market. Instead, it sets a procurement price creating a rigid market that keeps private buyers out. The price of domestic corn was roughly $150/metric ton (m.t.) delivered to the feed mill, while U.S. corn delivered to a major port was $125-130/m.t. in early May. Since, corn prices have crashed and the U.S./China differential narrowed. U.S. corn delivered to China stands at only $100-110/m.t., while domestic corn delivered to the southern provinces is about $130/m.t.
On the hog-marketing end, producers face an open market. "That makes it hard," Meyer points out. "There's no government control over the meat price, but your ingredients are controlled. If they let the price (of corn) go to the world market, you could see a major shift toward commercial production," he adds.
Confusing the view even further, the quality of China's hogs ranges all over the boards. The better quality, leaner hogs from the Guangdong area were selling for 7.6-7.8 RMB/kilogram (40 cents/lb.) in early May. "That's for good hogs in the best market in the country," Meyer explains. Lesser quality hogs drop off pretty fast, many producers noting they were selling for half that.
"We're expecting a certain amount of this industry to commercialize and we (USGC) are trying to provide some of the tools they'll need. It would be good if they would accept that there is going to be a commercialization (of the pork industry) and recognize that we need to make it as efficient as possible - and that means good genetics, good management, good nutrition and good, high health," he adds.
This more commercialized growth is expected to occur in the southern and eastern coastal areas, near ports where corn and improved breeding stock can be brought in and better feed mills exist. Three provinces northwest of Hong Kong - Guangdong, Guangxi and Hunan - are the likely candidates.
China As A Market The so-called "movers and shakers" in the industry accept much of the westernized philosophy of pork production. AI training is being accepted but separate site production, early weaning and more stringent environmental controls will gain favor slowly, partially due to the extremely heavy populations in some areas.
Regardless, if you are selling animal health products or breeding stock, many issues still remain. Doing business in China is more complicated than many areas of the world, reminds Clayton. Still, he offers this perspective: "Multiply anything that has potential times a billion and it's going to be a major market at some point in time."
On the one hand, Clayton sees an "almost unlimited market" for swine genetics and breeding technology. Yet, stringent health requirements and other barriers make trading with the Chinese more difficult than other Asian markets he considers to be high-value markets - such as Japan, Korea and Vietnam.
Clayton sees a China that wants to be competitive in the world market - "to be mentioned in the same breath as the U.S., Canada and European countries." Yet, on the other hand, there exists a government that wants to maintain the status quo, which is suspicious of other countries and the technology they offer. "They want to call it their own name, develop their own programs and keep all of us at arms' length," he assesses.
Clayton has traveled nearly 40 other countries in his work. He reinforces advice often given about doing business in China - it is very important to build personal relationships. "Patience is a virtue - and you have to have it here."
Mabry, too, has traveled worldwide, consulting on swine genetic programs and studying pork markets. "When you consider the huge population over here, the developing economy and the fact that the government wants to expand the consumption of meat, then consider pork has a better image than chicken, I think there's a tremendous potential industry for growth that we probably don't see anywhere else in the world."
Mabry expects Chinese buying habits to be similar to the nearby Japanese. "They want to use technology to expand production and consumption of pork, but they want to be able to control the situation. You don't gain control if you become dependent on the U.S. or anybody else for the direct importation of the product."
And, he agrees the pork quality question remains unanswered. "We've got to re-define pork quality for what the Chinese want - what level of tenderness, what aspects of color and flavor are preferred in their society."
Iowa State's Baas agrees: "They cook pork differently than we do. We're probably not going to change their traditions. The things that are important to them, in terms of quality, may not be exactly the same as we would choose. They are not going to start eating 11/4-in. thick Iowa chops, just the same as we're probably not going to start eating snake or eel and those kinds of things.
"They are producing pigs for a lot of different markets - the Hong Kong market, several provincial and local markets - and each one wants something a little bit different. It's unlike our country where we're producing commodity pork, for the most part," he says.
"We might think they need to reduce the backfat on their pigs, but what they probably really need to do is add more muscle. They're going to tolerate a pig with more fat than we are," he adds.
Baas' closing thoughts, "The thing that struck me the most was the tremendous hunger for technology that we saw everywhere we went. The audiences for our seminars were very attentive, asked very good questions and were very interested in what wewere doing.
"The second thing that struck me is they are people who like to do things the right way. They are very meticulous about how they like to do things; they want to find out as much as they can from us and then do a better job."
Chinese pork producers were very interested in information about American breeding stock during the China Animal Husbandry and Feed Industries Fair in Changsha. Shown here at the National Swine Registry (NSR) booth, Qiao Qingyan (second from right) translates a producer's question for Tony Clayton (far right), NSR International Marketing director.
The throngs of people that descended on the exhibitors after an opening ceremony resembled the mad rush you might see when the doors are flung open for a huge American department store sale the day after Thanksgiving. Information on "western" pork production methods and technology, particularly, was a hot commodity.
The products and technology displayed ran the gamut - from paste-filled tubes claiming to cure everything from sow mastitis to baby pig scours to high-tech equipment, computerized recordkeeping, vaccines and medications.
The three-day trade show, staged in several old museum buildings connected by a series of hallways and a central courtyard, drew an estimated 20,000 people.