Shaping the future of animal health

Prepare for new cattle and beef markets in China

Experience tells us that early movers will reap the biggest benefits from the China–Australia Free Trade Agreement (FTA).

Exporters of Australian beef and cattle could benefit from more competitive access to new markets right across China. Commencing in 2015, the FTA will eliminate many tariffs on goods and services, including:

  • 12–25% on beef over next 9 years
  • 12–25% on offals over next 4–10 years
  • 5–14% on hides and skins over next 4–8 years
  • 10% on live cattle over next 4 years.

FTA brightens positive outlook for beef

Australian cattle producers were already expecting increased prices. Strong demand—driven by high global beef and cattle prices—is coupled with a significant reduction in supplies as the national herd is forecast to fall to a two decade low of 26.1 million head by mid-2015.

Already, China is proving to be a promising market for Australian beef and cattle. China has become Australia’s third largest beef export destination after Japan and the US, just ahead of Korea.

In 2013–14, Australian beef and veal exports to China reached a record 160 441 tonnes swt, an increase of 74% on the previous year’s record volume.

Coupled with higher Australian beef production since early 2013, the surge in Australian frozen and chilled beef exports to China has been driven by China’s:

  • strong economy, growing population and higher personal income
  • improved infrastructure and rapid urbanisation
  • increased demand from different channels over a wider geographic area
  • tight domestic supplies and higher red meat prices
  • reported decrease in national cattle herd
  • increased food safety concerns and stricter government controls.

In the live export sector, approximately 1 in 3 Australian dairy farmers are now producing heifers destined for China. Taking 78 896 head in 2013–14, China is Australia’s largest dairy cattle export market, as the Chinese government commits to increase its national dairy herd to make more domestic fresh milk available.

Business in China requires preparation

To make complex deals with second and third-tier cities in China (ie not Shanghai, Beijing, Guangzhou or Shenzhen), Australian businesses are urged to:

  • invest in new infrastructure
  • gain a sophisticated understanding of the Chinese market
  • closely coordinate with Chinese parties.

Need advice about exporting agricultural products to China? Start with ‘Doing business in China’, published by AUSTRADE, the Australian Government Australian Trade Commission.