SMES: OPPORTUNITIES FOR THE EXPORT OF FOOD AND BEVERAGES TO CHINA 

China has 7% of the world’s arable land but has to feed about 20% of the world’s population, which is why it is also the world’s second largest importer of agricultural products.

Among the five-year plans of the Chinese Government is food, a priority issue and, therefore, its great challenge is to guarantee food supplies for about 1.4 billion inhabitants. Within this strategy, guaranteeing the importation of various food and beverage products from abroad to China is of great importance.

China has 7% of the world’s arable land but has to feed about 20% of the world’s population, which is why it is also the world’s second largest importer of agricultural products.

The arable area in China is not enough to meet domestic consumption. To solve this challenge, they are, among other actions, renting and buying arable land as well as acquiring the agri-food production of some products for 20 or 30 years in countries such as Ukraine, Argentina, Brazil, etc. ( https://landmatrix.org/ ). Another key strategy of China is to import food and beverages from other countries and that is where the opportunity lies for international companies, here is an excellent opportunity for SMEs around the world.

These indicators show us that there is a valuable opportunity to export to the Chinese market that is not exclusive to large corporations, and therefore, small and medium-sized companies (SMEs) must take advantage of and discover the great opportunity that exists and that it is feasible to do so. . It is a long-term life insurance for SMEs to have a percentage of exports that will help when demand in local markets falls. In times of Covid they have even increased the export to China of food products from many countries, for example, from Spain ( https://cincodias.elpais.com/cincodias/2021/03/19/companias/1616164524_323843.html ) .

Why are most small and medium-sized entrepreneurs afraid or self-limiting or discarding themselves when exporting to China? Some reasons are as follows:

• They mistakenly think that it is essential to speak Mandarin or Cantonese while few Chinese speak English fluently. Instead, Chinese SMEs are making successful exports globally and in almost all sectors without being fluent in local languages. Chinese SMEs had nearly 70% of China’s total exports abroad. Therefore, the entrepreneur of an SME does not need to speak the language of the country to which he wants to export, what he needs is to rely on teams of experts or consulting firms that know above all the culture of doing business with Chinese citizens. Knowing the language of your client of course makes the professional relationship more friendly, but does not prevent a successful business transaction.
• They also mistakenly think that their production is small, and therefore they cannot go to a market as big as the Asian giant. On the other hand, China is a very segmented market where each province or each city has its ecosystem and, therefore, we must avoid seeing China as a giant but rather as a market where there are small markets or niches where there are opportunities for SMEs to export.

There are several paths that are available to small and medium-sized entrepreneurs in the food and beverage sector, being highly recommended:

• Use export specialists for SMEs ( https://www.onexiexie.com ) who can facilitate the knowledge of the Chinese market, its consumers and business opportunities and, most importantly, which is to help close agreements.
• Contact the Government Trade Offices of the different countries in China that have the capacity and knowledge to locate potential partners, distributors, importers and distribution channels in China. They can do these steps better and more efficiently than individually, since the support and presence of representatives of your own Government in the negotiations is very valuable and respected by the Chinese businessman.
• Use smaller “market places” specialized by regions, cities and sectors that exist on the internet in addition to the larger ones that are better known internationally.

There is a prosperous Chinese middle class that will reach 500 million citizens from the year 2030 and they have among their priorities and habits the consumption of international products that will increase at the same rate as their purchasing power. Currently the Chinese tourist is the number one in the world and the one who spends the most, which allows them to personally taste and consume in different countries their best local food and drinks that they advertise at the same time on their Chinese social networks with their smartphones. This generates an exponential increase in knowledge and consumption habits among Chinese in the medium and long term of international food and beverages.

The small and medium producer or entrepreneur must realize that the great consumer of the world’s food and beverages in the 21st century is the Chinese citizen who wants to regularly taste and consume the international products of our countries.

Javier González García

Founder
International Trade Agency / 国际贸易署 / अंतर्राष्ट्रीय व्यापार एजेंसी

www.onexiexie.com

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