These are tough times for China’s fruit export sector. Much of the pressure is coming from a hungry domestic market, which has in certain cases driven up prices to the point where export hardly seems like a risk worth taking. Throw in rising production and compliance costs, more price-conscious export markets and a strong currency that is squeezing returns – and you can see why fewer suppliers are taking that risk nowadays. It’s a far cry from a decade ago when China was leveraging its labour cost advantage to foray into some of the world’s most demanding markets, notably with its bagged Fuji apples to Europe. Back then, the export sector enjoyed strong government support, but the funding focus now appears to have switched to spurring domestic consumption.
Or has it? Just as China’s role in the international marketplace appears to be receding amid rising costs and lack of innovation, there’s a vast amount of work going on in research institutes across the country on plant genomics and varietal development that could redefine its direction as a supplier in the future.
With its diverse climate, low production costs and large agricultural base, China is often seen by international plant breeders as an opportunity to introduce their new and/or superior varieties to produce higher value products, but the most exciting varietal developments appear to focus on what could come out of China itself, rather than what might be brought in. China’s huge biodiversity and rich repository of germplasm make it an Aladdin’s cave for finding and developing new products. And China is ploughing remarkable resources into breeding and selection that are well funded, managed and targeted, reflecting the government’s policy to boost rural wealth.
At a time when varietal development in many parts of the world is stunted by lack of funding or resources, China’s major focus on this field, and the opportunity for commercialisation of new varieties, present good scope for foreign entities to engage with these research bodies for mutual benefit. Government support for initiatives that involve foreign funding tends to be strong, particularly when they’re designed to lift rural incomes. With their capacity to create wealth, new varieties fit the bill, and could replace low labour costs as one of China’s next great competitive advantages.
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