Food Industry Trends 2010 - Priorities for the New Decade

From a new FDA to China, seven game-changers for 2010 and beyond.

By Dave Fusaro, Editor in Chief

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4. Getting Back to China

The following was contributed by James Rice, vice president and China country manager for Tyson Foods Inc., and a longtime member of Food Processing’s editorial advisory board.

Quality challenges and the global recession have slowed food, ingredient and agricultural trade between the U.S. and China, but the long-term connection between these two countries is undeniable. Right now, the U.S.-China bilateral relationship is the most important of all, and last year’s challenges will be viewed as a pothole in a rising road.

Since 2000, U.S. exports to China have grown 341 percent and China has been the fastest growing export market for U.S. products. China already is the third largest U.S. export market, worth $70 billion.

In the coming decade, China will represent more than half of the world’s gross domestic product growth and half of the world’s growth in protein consumption. China also will grow in its role as a major supplier to the U.S. and as a consumer of American products. This momentum should not be lost by American food processors. What is needed is a collaborative relationship between the U.S. and China to ensure market access and a level playing field for all companies.

The Obama Administration will continue with two important cabinet-level forums that work with the Chinese leadership: the Joint Committee on Commerce and Trade, which handles specific company trade issues, and the Strategic and Economic Dialogue (S&ED), which serves as a forum to discuss long-term strategic issues and to prioritize the agenda between the two countries. It is the highest official dialogue between China and the U.S. One result of the S&ED was an agreement to establish the U.S. Food & Drug Administration’s first overseas offices in Beijing, Shanghai and Guangzhou.

But the U.S. government will need to do more. Our industries will need more technical exchanges between American and Chinese regulators, so Chinese regulators can understand our processes. This is critical because China is just now developing standards for its own industries.

Local standards that are unique to China create an entry barrier to companies that follow international standards. Another challenge is that U.S. industry organizations generally create their own standards, and these organizations are not equipped to promote American standards globally.

The European Union is much more organized at promoting its standards to Chinese regulators. Adoption of EU standards in China often excludes U.S. products, which is part of the reason 40 percent of Chinese imports come from the European Union and not the U.S.

American businesses need the U.S. government to push China on market access issues. This highly political work cannot be done by individual companies or industry organizations. Billions of export dollars are on the line as the American producers are still waiting for permission to export food and agriculture products, such as beef, potatoes, strawberries and food additives.

While large companies often have the resources and experience to expand into new foreign markets, small and medium size companies rarely do. The U.S. government needs a comprehensive plan to help support these companies’ expansion into the China market. Competitor nations such as the European Union, Japan, Australia, and Canada work hard to support small exporters, while the U.S. spends one-sixth the international average on export promotion programs.

On the Chinese side, there is more work to be done to ensure its products have the quality and safety needed to be sold in the U.S. Clearly, China has the aspiration to address its quality issues and started with the publication of the new Food Safety Law. Implementing regulations need to be published by multiple ministries and agencies, so businesses can understand what needs to be done.

Historically, China has not been transparent in the formulation and implementation of regulations. It would be better if this process were open to public comment, particularly by businesses that will be affected. Down the road, the Chinese government will have to show us in earnest these tough, new regulations will be applied across the board and without exception to all manufacturers in China. That’s the only way the “Made in China” label can stand with any confidence.

The U.S.-China relationship is moving in the right direction, and both countries should expand their dialogue and constructive engagement with each other. Bad trade policies and lack of engagement would leave a serious hole in the business between the U.S. and China. The U.S. is enjoying resurgence in its exports to China, which is a market we should all want to participate in.

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