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The Chinese Grow Closer to French Wine 4/19/2011

china wine importsChina was the world largest consumer and importer of Bordeaux wine in 2010. That is astonishing to me, considering that French-style red wine has only recently began to draw a significant following amongst Chinese consumers.

According to the Bordeaux Wine Council, China imported 33.5 million bottles of Bordeaux wine last year. That is $475 million USD worth of French wine tingling the palates of Chinese wine lovers. China in fact, has become much more of a wine-oh country in the last six or seven years. They now import over $1 Billion USD worth of wine, which is more than four times the amount imported in 2004.

If you have your own label, (I wish I did) I would highly consider formulating a market entry strategy to break into what could quite possibly be the world’s largest wine market very soon.

China is also in the midst of a large wine expo, called the “2011 Wine China Exhibition” located in both Beijing and Shanghai. The events began on April 17th and will continue through April 20th, ending in Shanghai. Wine from all over the world will be celebrated, tasted and enjoyed. If you are interested in learning more, here is the exhibition’s site. I definitely plan on attending one of these years.

China Wine Import Stats

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China is Nuts for American Pecans 4/18/2011

China Agriculture- Pecan DemandThe word is out. Chinese consumers have gotten wind of the wonderfully tasting and healthy nut, the pecan. After several segments on Beijing TV and other local TV stations on the health advantages of pecans, Chinese consumers have began to expand their nut repertoire.  And where can they find these fine nuts? America, that’s where. Approximately two-thirds of the world’s pecans are produced in the United States.

Demand for American pecans in China has been so strong, that prices have nearly doubled in the last three years. According to the USDA, the average price of shelled pecans in 2007 was around $1.00/pound and last year, in 2010, prices jumped to nearly $2.25/ pound.

This increase in demand has led to a large shift in American pecan exports. As you can see in the chart, in 2005, total exports were only 30% (China being only 1% of that.) And only four years later, China grew to nearly 30% of our exports, bumping up total exports to more than 50% of domestic production.

And demand is showing no sign of waning. Total production numbers, however, have not yet began to be affected due to the nature of the pecan tree. It takes ten years for a pecan tree to begin producing any sizable amount. And even then, the trees have alternating “on” and “off” years. So as more farmers start to up their acreage of pecan trees, we will have to be patient and shell out for our favorite holiday pies and fruit cakes.

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109th Spring Canton Fair to Begin this Friday 4/11/2011

109th Canton FairHave you finished planning your trip to this year’s Spring Canton Fair yet? The world’s largest international trade show is almost underway. As always, the Import and Export Fair will be held in Guangzhou, the center of China’s trade region China Import and Export Complex. The fair features over 50,000 exhibits spans over two weeks.

Phase I is set to begin this Friday and lasts through Tuesday, April 19th. Products to on exhibition during Phase I are the following:

  • Electronics & Household Electrical Appliances
  • Lighting Equipment
  • Vehicles & Spare Parts
  • Machinery
  • Hardware & Tools
  • Building Materials
  • Chemical Products
  • International Pavilion

Phases II and III will be on the following schedules:

Phase 2: April 23-27, 2011 | 9:30-18:00
* Consumer Goods
* Gifts
* Home Decorations

Phase 3: May 1-5, 2011 | 9:30-18:00
* Textiles & Garments
* Shoes
* Office Supplies, Cases & Bags, and Recreation Products
* Medicines, Medical Devices and Health Products
* Food & Native Produce
* International Pavilion

Additionally, the China International Furniture Fair (CIFF) will be held in conjunction with Phase I and Phase II. Everything from modern home furniture to office and laboratory furniture will be available. Home Furniture will be on display from March 18 to the 21st and office furniture will be available from March 27 to March 30th.

If you haven’t signed up yet, don’t worry there is still time. You need to apply for an “invitation” through the Fair’s website here. Admission is free, but registration typically takes about a week to get your confirmation. Once you receive confirmation, print out the information and take it with you along with a photo ID and a passport photo (or you may take one there).

Spring Canton Fair Location: No. 380, Yuejiang Zhong Road, Guangzhou, China.

Other Canton Fair Posts:

2011 Spring Canton Fair Dates & Information
Spring Canton Fair Update
108th Canton Fair Review
China’s Canton Fair – October 2010

Please do not hesitate to post any questions, comments or advice for future fair adventurers below.

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Disney Comes to Shanghai 4/8/2011

Disneyland Comes to Shanghai

This post is for all you Disney lovers out there. Work on Shanghai’s soon-to-be Disneyland began today with a groundbreaking ceremony. The CEO of Walt Disney Co., Robert Iger and the Party Secretary of Shanghai, Yu Zhengsheng were there with shovels in hand. The newest Disneyland will be located in the Pudong New Area of Shanghai and is estimated to be completed within five years. Along with the theme park will be two hotels, and a multitude of stores and restaurants. The estimated cost is about $670 million (4.5 billion yuan).

All the characters were present at the ceremony, dressed in traditional Chinese garments. Can’t wait to check this one out!

Source: http://usa.chinadaily.com.cn/china/2011-04/08/content_12294387.htm

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Food Importers and Manufacturers – New Regulations and Compliance Standards You Should Know About 4/8/2011

food importer regulationsIn January, the Food Safety Modernization Act was signed into law and the FDA is currently working its way through the implementation process. Perhaps the most groundbreaking part of this law is the requirement for food producers and manufacturers and processors to verify and certify their suppliers’ food safety processes.

Why start worrying about imported food and ingredients now? Over the last decade, more and more food has become available on America’s shelves and a good amount of it is imported; 15% of food to be exact. Certain foods have much higher percentages; such as 75% of seafood, 20% of vegetables and 50% of all fruits are imported. The FDA however, hasn’t had the bandwidth or the manpower to inspect more than 1 percent of all the imported food in most recent years.

What does this mean for food manufacturers and producers with international supply chains, from say, China? The new law places the responsibility on the business owners to verify and certify that their international suppliers are complying with the standards set by the FDA in the U.S. The goal of the FSMA is to ensure that imported food is just as safe as the food that is produced domestically and will require a great deal of cooperation and partnership from many different countries and agencies.

What is compliance and how do businesses become certified? At this point, the FDA is still creating the guidelines for how to become certified. However, food safety experts have suggested implementing a preventative, risk-based plan like HACCP. Although the FSMA rules will require actions beyond having a solid HACCP plan, it is said to be a great starting point for companies working towards future compliance.

Industry experts also suggest that as companies prepare for compliance, they should undergo a “gap analysis” to locate weaknesses and shortcomings in their food safety plans. With the results from the gap analysis, companies will then be able to address the issues before an FDA inspection, which when paired with a HACCP plan can help expedite the process for compliance.

The FDA must accomplish the following tasks by the indicated dates: (taken from the FDA’s website)

– Preventive Controls for Facilities – June 2012

– Produce Safety Standards – January 2013

Inspection, Compliance & Response

– Rules and Process for Administrative Detention – May 2011

– Recall Authority (May be mandated only by the Commissioner of the FDA or the Secretary for Health and Human Services) – Currently Active

– Suspension of Registration Regulations – May 2011

Imports

– Foreign Supplier Verification Program Guidance – January 2012

– Accredited Third-Party Certification Program – January 2013

– Mandatory Certification for High Risk Foods – Currently Active (but the definition of “high risk foods” is still in development)

The latest update in FSMA:

As the first big accomplishment of the Food Safety Modernization Act,  the FDA has released a user-friendly food recall database. The database is an easier way to allow consumers to access up-to-date information regarding current and past food safety scares. The database provides information sorted by type, such as food, drugs, animal health etc., but can also be searched by date, food type, or brand. If available, the product labels will be posted as well. This new database is one step in the long process of the food safety act’s implementation that will help create better communication between the governmental agencies and consumers.

You can also sign up for daily or weekly updates that deliver the most recent recalls directly to your inbox.

The database can be viewed and searched here: http://www.fda.gov/Safety/Recalls/default.htm

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China & US March Manufacturing Rates Rise 4/7/2011

China U.S. manufacturingDespite fears that China’s efforts to decrease inflation would decrease economic growth, the production numbers still indicate a rise in China Manufacturing this March. March’s Purchasing Manager’s Index (PMI) rose from 52.2 in February, to 53.4 in March.

According to economists, China’s central bank will increase interest rates again this quarter to further curb inflation. Some argue that this will eventually hurt China’s overall economy in addition to slowing the growth, but only time can tell.

The manufacturing sector in the United States also grew this past March. It was the 20th consecutive month for manufacturing growth. In fact, it was also the 22nd consecutive month for overall economy growth as well. The PMI for March was 61.4 percent, which is down from February’s 61.4 percent, but any number above 50 indicates growth. The economy also grew by 3.1 percent during the last quarter of 2010.

Source 1

Source 2

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China’s 12th Five Year Plan is Formed 4/7/2011

China's five year planLast month, China’s newest Five Year Plan (FYP) was developed at the Annual Sessions of China’s National People’s Congress. At the center of the 12th FYP is possibly their most ambitious energy goal to date. The new plan calls for a reduction of energy intensity by 16 percent over the next five years. As the goal is quite bold, it is possible considering that during the previous FYP, China managed to reduce energy by 20 percent.

Other goals of the FYP include a plan to reduce pollution and reduce China’s dependency on fossil fuels. China is aiming to reduce carbon dioxide emissions by 17 percent and to increase the use of non-fossil fuels from 8 percent (current state) to 11.4 percent in 5 years.

When it comes to implementation, China has decided to encourage development and foreign investment in industries that will increase their ability to move towards these green goals. They will be executing programs to support growth in the high-end manufacturing industries such as clean energy, various service industries and environmental protection.

Of course, there are supporters and opponents of the newest FYP. Supporters of the plan include environmental protection groups and clean energy groups who are encouraged by China’s step towards a greener country. Some opponents say however, that the plan could be too ambitious and that some of the other goals included in the plan may be conflicting with their green initiatives; such as the target to build upwards of 40 new airports over the next five years.

Ambitious or not, achievable or not, changes are on their way for foreign investors and where different incentives will be placed in the upcoming years.

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Interview – Imports and the Food Safety Modernization Act 4/5/2011

We found this very useful FDA interview on the provisions applied to importers under of the Food Safety Modernization Act. David Elder, the Director of Regional Operations from the FDA, covers the steps being taken for implementation.

Interesting Points from the video:

  • 15 percent of food consumed in the United States is imported.
  • Importers must verify that their suppliers are conforming with the FDA’s standards.
  • Import Verification Guidance documents must be published by the FDA by January 2012.
  • The FDA must have an Accreditation System in place by January 2013.
  • Comments from industry professionals will be allowed as new provisions are posted.
  • Products and suppliers that not not pass FDA inspection can be refused entry into the U.S.
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