On February 18, 2019, the CPC Central Committee and the State Council issued the Outline of the Development Plan for the Guangdong, Hong Kong & Macao Greater Bay Area (hereinafter referred to as the Outline). The 27,000-word document comprehensively plans the strategic positioning, development goals and spatial layout of the Guangdong, Hong Kong & Macao Greater Bay Area (hereinafter referred to as “Greater Bay Area”). It is a programmatic document guiding the current and future cooperation and development of the Greater Bay Area. Driven by national policies and local governments, the industry, economy and system of the Greater Bay Area are experiencing unprecedented integration and development, which also provides a broader stage for the development of companies in various industries including imported food industry. So, What’s the impact of the Outline on the imported food industry?

DEVELOP TRANSPORTATION TO ACCELERATE FOOD IMPORTING AND TO REDUCE COSTS

The Outline proposes that “The Greater Bay Area should build a modern comprehensive transportation system. In terms of shipping, we will consolidate and upgrade Hong Kong's position as an international shipping center and enhance the integrated services of international shipping services in Guangzhou and Shenzhen. In terms of Aviation transportation, the Greater Bay Area should construct a world-class airport system. We will consolidate and enhance Hong Kong's position as an international aviation hub, enhance the competitiveness of Guangzhou and Shenzhen airports as international hubs, and enhance the functions of Macao and Zhuhai Airports. On the highway transportation, we should perfect the comprehensive highway from Guangdong to the surrounding provinces and regions of the Area. In terms of railways, an intercity rapid transportation network with high-speed railways, intercity railways and highgrade highways will be built, with the focus on connecting the mainland with Hong Kong and Macao as well as the east and west sides of the Pearl River estuary.”

There is no doubt that transportation plays an important role in economic development. The significant improvement of transportation in the Greater Bay Area is bound to have a profound impact on the imported food industry, especially the imported fresh food. Imported fresh food has very high requiements for transport, so the development of the Guangdong, Hong Kong and Macao transport system can greatly improve the speed of fresh imports and reduce costs, which will also promote the consumption of fresh imports of mainland residents. In addition, in 2017, Guangdong province ranked the first in the trade volume of imported food in China, totaling 13 billion US dollars, thus the construction of roads to other cities from Guangdong province will also facilitate the sales of imported food to other provinces and cities. In addition, the construction of an overland international thoroughfare connecting ASEAN countries will also facilitate the import of food from ASEAN countries to China. It’s expected that there will be more ASEAN fresh foods exported to China through the channel.

DEVELOP LOGISTICS AND FOOD DISTRIBUTION CENTER TO IMPORT MORE OVERSEAS FOOD TO CHINA

According to the Outline, “Cooperation in logistics among Guangdong, Hong Kong and Macao should be promoted. Third-party logistics and cold-chain logistics should be vigorously developed. Supply chain management should be improved and international logistics hubs should be built.” 

Logistics is very important for the global trade cooperation between international enterprises. The improvement of logistics will promote the trade cooperation between the whole region and the international community. The development of cold chain logistics will also improve the quality of imported fresh food, greatly reduce the loss of fresh products during the transport process, and lower the cost of enterprises.

In addition, the Outline clearly states that we support Macao in accelerating the construction of a food distribution center for Portuguese-speaking countries, and support Hengqin District to provide support to Macao's development of cross-border e-commerce industry, and make it easier for products from Portuguese-speaking countries to enter the mainland market through Macao. With development of food distribution center, Portugal, Brazil and other Portuguese-speaking countries will export food to China more conveniently and quickly. It will provide more convenient and advantageous resources for the procurement of Portuguese products in the cross-border e-commerce industry and greatly promote the economy of Hengqin District of Zhuhai. It is expected that more food from Portuguese-speaking countries will be sold to the Chinese market.

ENHANCE CONSUMER CONFIDENCE BY BUILDING FOOD SOURCE TRACING CENTER

The Outline points out that Guangzhou Nansha District should be supported to build a global center for tracing the source of import and export commodities and accelerate the pilot project of market procurement and trade. 

With the increasing number of younger consumers, more and more people choose to buy imported food to meet their personalized demand. Food safety and food source have been eternal topics that consumers care about for a long time. So the construction of Food Source Tracing Center for Global Import and Export Commodity will be able to provide importers, distributors and consumers more clear and perfect commodity information, including production certificate from origin and a series of basic data during transit. Transparency of product information also help dealers and consumer to make sure whether the received food is safe and reliable. Thus, the construction of Source Tracing Center will also boost the demand for imported.

UPGRADE EXHIBITION SERVICE TO FURTHER DEVELOP THE INDUSTRY

The Outline proposes to build a modern service industry system, to promote the professionalization and high-end development of producer services, such as business services and circulation services and to focus on conferences and exhibitions, shipping and logistics and other professional services. 

Exhibitions are trading platforms for Chinese imported food buyers and the overseas food suppliers. The support of the Outline for conferences and exhibitions will promote the development and service level of import food exhibition, make the exhibitions better serve the import food enterprises, promote the growth of the trade volume of the whole import food market, and expend the market scale of the whole industry.

EXPAND MARKET SIZE OF IMPORTED FOOD INDUSTRY TO 500 BILLION YUAN

Openness, cooperation and mutual benefit are among the basic principles of the Outline. The program calls for building a new system of an open economy, a high-level open platform, and better alignment of trade and investment rules with high standards. It also calls for more effective alignment of international and Chinese domestic markets and resources, and faster development of new strengths in international cooperation and competition.

In 2018, China's imported food market reached 480 billion yuan, with dairy products, edible vegetable oil, meat and aquatic products accounting for a large proportion of China's food imports accounted. The release of the Outline will promote trade cooperation between more Chinese food importer and overseas food suppliers. The improvement of various services and the increase of market products will also enhance consumers' confidence and purchase desire. It is expected that the market demand and trade volume will also continue to grow, and Chinese imported food market will become more and more prosperous and the scale will continue to grow. It is estimated that the scale of the imported food market will exceed ¥500 billion in 2019.