With 248 million middle class consumers in China, the demand for high quality Australian beef is set to remain strong according to NAB Head of Group Development for Greater China, Vincent Lo.
Mr Lo, presenting at the Australian Meat Industry Council’s (AMIC) 2011 Meat Industry Conference on the Gold Coast in Queensland this week, said that Australia’s beef export market is in a unique position to capitalise on the evolving market in China.
“Over the last twenty years China’s GDP has been growing at an annual rate of higher than 7 per cent, with the Government spending strongly on sponsored investment programs to stimulate private consumption and avoid a slowing down of the economy following the global financial crisis (GFC).
“China’s population is also becoming increasingly urbanised and around half of the population now live in urban centres, with this expected to increase by 10 million people per year. This growing urban population has more disposable income to spend on higher quality products.
“China ranks fourth in the world in terms of beef production and consumption, even though pork and poultry account for 89 per cent of all meat consumed.
“China’s domestic beef production has decreased since 2005 and although it is expected to recover by 2013, the majority of domestic beef is low to mid quality with only a hand full of large suppliers able to produce high end beef, which is typically chilled.
“What we see with higher income earners, people with a disposable income of more than RMB 20,550, is that they spend less on pork and more on other meats. Amongst these more affluent consumers, Australian beef is differentiated by its high quality and safety.
“Australia is the lead supplier of quality beef into China and has some important advantages over its competitors, with limited beef products allowed from Brazil, Argentina and Canada, and more exporters licensed in Australia than in Uruguay or New Zealand.
“These factors combine to provide an exciting opportunity for Australia’s beef export market, and one that NAB Agribusiness and the team in China are in a unique position to leverage for their Australian clients.
“This involves connecting NAB Agribusiness’s clients with key agricultural players, including the Agricultural Development Bank of China, through NAB’s networks across China to facilitate business relationships that support capital and trade flows that mutually benefit clients in Australia and China,” concluded Mr Lo.