by Jia Wei

 

BEIJING, May 1 (China Economic Net) –As China has a supply gap of beef and Pakistan has sufficient capacity, how long will it take for Pakistani beef to enter the Chinese market?

 

According to the Pakistan Economic Survey 2019-20, more than 8 million rural households in Pakistan engage in livestock production which contributes to 35% to 40% of their total income. Over the years, animal husbandry has surpassed farm production and become the biggest contributor to value-added agriculture.

 

Pakistan has 208 million food animals, with a milk output of over 60 million tons and an annual production of 20 billion eggs, Khurshid Ahmad, Animal Husbandry Commissioner, Ministry of National Food Security and Research, said.

 

Compared with Pakistan, China is a large meat importer. In 2020, China's beef production reached 6.72 million tons, and the import volume reached 2.1183 million tons with an increase of 27.65%, setting the beef import record. At the same time, China's chicken import volume nearly doubled compared with that in 2019.

 

China's annual output of beef and mutton adds up to 10 million tons, said Li Jinghui, Deputy Secretary General of China Animal Agriculture Association and President of White-feathered Broiler Alliance, adding that "China's per capita output is a few kilograms, which fails to meet domestic needs. That's why there are millions of tons of imports."

 

 

China is a major meat importer while animal husbandry plays an important role in the economy of Pakistan, yet annual meat trade between the two countries is very small. So far, China has not opened the door of Pakistani beef import, as Pakistan is still on China's "List of Animals and Their Products in the Countries and Regions with A Prevalent Animal Epidemic Situation Banned for Entry".

 

Can this barrier be broken through? Foot-and-mouth disease (FMD) free zone has been most often mentioned by insiders and experts of animal husbandry industry in the two countries.

 

In 2019, China and Pakistan signed the Foot-and-Mouth Disease Free Zone Agreement. Pakistani government is undertaking a vaccination programme to address the FMD issue. In this way, Pakistan is expected to move from the World Organization for Animal Health (OIE)’s Stage-2 category for countries (in which FMD is reduced to target areas) to Stage-3.

 

Chinese research institutions are providing Pakistan with state-of-the-art technology, said He Cheng, a professor at China Agricultural University's College of Veterinary Medicine, adding that "with vaccines and training personnel, Pakistan can produce certified and FMD free meat and dairy products, which is our goal."

 

On the site selection of FMD free zone, Shen Jing, Deputy General Manager of QYH Biotech, with China Animal Husbandry Industry as its shareholder, revealed that they plan to build the FMD free area in either Balochistan province or Punjab province, and carry out the construction with the support of Chinese customs and quarantine agencies. At the same time, he said they will further explore the possibility of information and personnel exchange, promote the use of vaccines and the establishment of standards, and advance the mutual recognition of standards.

 

Food and fodder should go ahead of troops and horses. Vaccine is a key element in the construction of FMD free zone. At present, the FMD vaccines, approved by Drug Regulatory Authority of Pakistan, mainly come from China, Russia and western Europe.

 

Masood Rabbani, Vice Chancellor of University of Veterinary & Animal Sciences (UVAS), proposed an idea to realize the localization of FMD vaccines with the help of China. "We have a vaccine research institution in Pakistan, and we can accept investment from Chinese enterprises to build processing facilities to produce foot-and-mouth disease vaccine," he said.

 

As an enterprise exporting FMD vaccines to Pakistan in 2019, Shen Jing also plans to bring Chinese vaccine technology to Pakistan. "We will build a veterinary vaccine factory in Gwadar Port, Pakistan. The annual output of foot-and-mouth disease vaccine is expected to be 700 million doses. It is not only used in Pakistan, but also exported to the Middle East and South Asian countries. "

 

Gwadar Port sits at the southern end of China-Pakistan Economic Corridor. As a Chinese enterprise deeply involved in Gwadar Port, Zhang Baozhong, the chairman of China Overseas Ports Holding Company, put forward a new idea. He suggested that China and Pakistan make decisions as soon as possible and take Gwadar Port as a green channel for agricultural cooperation. "That is to say, we can carry out corresponding inspection and quarantine in Gwadar Port. After the products are transported to Chinese ports, no further inspection and quarantine is required. In this way, these goods can reach Chinese consumers directly. "

 

 

There is a long history of animal husbandry cooperation between China and Pakistan. As early as 1974, Guangxi province, China, imported 50 Nili-Ravi buffaloes, popularly known as “black gold” of Pakistan, initiating the bilateral scientific and technological cooperation. Since then, Guangxi province has become a core producing area of buffalo milk in China. In 2020, the production value of Guangxi's buffalo milk industry is expected to reach RMB 5 billion yuan, and the output of buffalo milk accounts for 50% of the whole country.

 

As with Lafite in the red wine market, Pakistan's Nili-Ravi buffalo milk is also known as the "king of milk" due to its higher nutritional content. Facing the huge market demand, Chinese buffalo milk enterprises need to introduce Nili-Ravi buffalo again to address the problem of insufficient milk supply. However, Pakistan does not allow live buffalo export. In this context, Chinese enterprise has to make a detour to import Pakistan’s buffalo oocytes and frozen semen.

 

Chen Yiyi, President of Royal Group, a leading buffalo milk production and processing enterprise in China, led a Chinese business delegation to Pakistan, the hinterland of buffalo milk production around the world, in April.

 

Touching upon his visit to Pakistan, Chen said that Pakistan lacks products with high added value and deep processing, while China needs to import high-quality products. As Pakistan has such resources, if the two countries can cooperate, it will definitely be mutual beneficial. He divided the cooperation into two stages. "In the initial stage, we can carry out technical exchange and cooperation. In the second stage, we hope to set up a factory in Punjab province to produce products for export to China."

 

As for plans of Chinese enterprises to invest in Pakistan, Syed Fakhar Imam, Pakistan’s Federal Minister for National Food Security and Research, showed strong support. "We also have a general development plan for the next 5-10 years. Now the government is making major decisions in this regard. We welcome Chinese investment from the public and private sectors, as well as the joint establishment of cooperative enterprises in agriculture. "

 

 

China is Pakistan’s largest source of foreign direct investment. Chinese enterprises' investment in Pakistan has increased year by year. Figures show that the China-Pakistan Economic Corridor has brought $25.4 billion of direct investment to Pakistan. However, there is information asymmetry in the agricultural sector, which constrains Chinese enterprises' investment. Masood Rabbani advised Chinese enterprises to understand the legal framework of agriculture in Pakistan. Li Bijian, Chinese Consul General in Karachi, also gave the similar suggestion to Chinese enterprises.

   

In order to facilitate Chinese enterprises’ investment, the China-Pakistan Agricultural and Industrial Cooperation Information Exchange Platform was officially launched in January 2021. To provide more exchange and cooperation opportunities for enterprises of the two countries, the platform plans to hold several online seminars in different fields be held this year. An online exchange activity on animal husbandry and fishery was held on April 28, at which participants discussed the cooperation space and investment between China and Pakistan in animal husbandry and fishery.   　

At this meeting, Syed Fakhar Imam said Pakistan wants to modernise its fisheries and marine farming. Since 2016, China has become Pakistan's largest importer of seafood, thanks to the increase of air routes between the two countries. Pakistan's seafood exports totaled 195,000 tons in FY2019, but Pakistan’s ambitions go beyond that. “Over 250,000 tons per year is the set target of exports," said Muhammad Akram, chairman of the fisheries development committee of Pakistan's National Ministry of Food Security and Research. He added, "We want to develop farming techniques and modernize the industry. With the support of these policies, we can accelerate the development of the fishery."

 

With a coastline of nearly 1,000 kilometers, Pakistan has excellent natural conditions to develop marine fishery. Driven by the construction of CPEC, technology and technology transfer will be the important driving forces for the development of fishery in Pakistan. Rehana Kauser, a project leader of the National Agricultural Research Centre (NARC) of Pakistan, said in recent years, Pakistan has been formulating and improving international standards for fishery products and food, holding related exhibitions, and will further invest in research. The fishing industry will also benefit from the expanding market, and there are many areas for cooperation with China. "Amid CPEC and trade liberalization, we will see a new era for fishery’s better development," he said. 

  

China has more than 3,000 aquatic products and produces more than 60% of the world's seafood. Pakistanis wonder how can China achieve sustainable aquaculture? Ma Zhuojun, Director of the International Cooperation Department of the Chinese Academy of Fishery Sciences, believes that international cooperation through the Aquaculture Interchange Program(AIP) is a good way for Pakistan to learn from.  

 

AIP is the latest international popular Aquaculture project. Its key word is "adaptability", said Ma, adding that it means that we should match the local environmental conditions to find the most suitable species and patterns for agriculture.

 

"Global cooperation is very important for the development of aquaculture. If any country wants to develop aquaculture, the theme word should be appropriate and matching. We need to identify many factors, including varieties and models."   

 

As an emerging fishing hub, Baluchistan once sent a fishing delegation to Fujian China in 2019 to learn about local farming techniques. Some fishing enterprises in Fujian showed interest to invest in Gwadar port. At the webinar, Farman Ullah Zarkoon, CEO, of Balochistan’s Board of Investment and Trade, promoted Gwadar port and said they are exploring incentive measures.  

 

Karachi is the traditional fishing hub of the eastern fisheries of Pakistan. Li Bijian, Chinese Consul General in Karachi, said Chinese enterprises are welcome to invest in Pakistan's fishery industry. He also put forward five requirements. Firstly, partners of Chinese and Pakistani should strictly abide by each other's laws and regulations. Secondly, the two sides should conduct training and capacity building on an equal and mutually beneficial basis. Thirdly, technology transfer should be based on commercial terms, i.e. strict protection of intellectual property rights. Fourthly, partners should work together to ensure that their investments are protected and guaranteed. Banks in both countries should lend as much as possible to small and micro businesses so that they can successfully set up and operate their businesses. Fifthly, Pakistan should create a favorable investment environment and welcome and accept the relocation of manufacturers and manufacturing industries. From the point of view of China and other countries, Pakistan should introduce relevant policies to encourage foreign investment and strengthen policy continuity.