Source: NORTH CAROLINA A&T STATE UNIV submitted to NRP
EXPORTING U.S. LIVESTOCK PRODUCTS TO CHINA: ASSESSMENT OF THE CHINESE MARKETING DISTRUBITION SYSTEM
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
Reporting Frequency
Annual
Accession No.
0188870
Grant No.
2001-35400-10626
Cumulative Award Amt.
(N/A)
Proposal No.
2001-01794
Multistate No.
(N/A)
Project Start Date
Jun 15, 2001
Project End Date
Jun 14, 2004
Grant Year
2001
Program Code
[(N/A)]- (N/A)
Recipient Organization
NORTH CAROLINA A&T STATE UNIV
1601 EAST MARKET STREET
GREENSBORO,NC 27411
Performing Department
AGRICULTURAL ECONOMICS
Non Technical Summary
After more than a decade of intensified bargaining, the U.S. and China reached a breakthrough in trade negotiations with the 2000 U.S.-China WTO Accession Agreement. For the first time, U.S. livestock exporters acquired marketing distribution rights within China; thus, bypassing Chinese importers and enabling U.S. exporters to develop their own marketing distribution channels within China. The overall goal of this project is to assess the Chinese livestock marketing distribution system using an institutional framework approach that examines structure, conduct and performance. We believe that in order for U.S. livestock exporters to successfully conduct business in China, they need a clear understanding of Chinese consumers, and business practices of Chinese competitors. In addition to advancing academic research on Chinese marketing channels, results will provide U.S. livestock distributors with Chinese market structure information to enhance competitiveness, one of the goals of the NIRGDP. In addition to academic and outreach publications and presentations, results will be available on web.
Animal Health Component
(N/A)
Research Effort Categories
Basic
100%
Applied
(N/A)
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60661203010100%
Goals / Objectives
Specific research objectives to achieve the goal include the following: to(1) collect information on laws/rules that govern China's livestock product marketing chain via a literature review & focus group studies; 2) conduct consumer preference surveys for livestock-product attributes-product safety, labeling, brand name, & customized cuts; 3) estimate Chinese consumer preferences using ordered probit models; 4)disseminate results in a variety of venues-academic and outreach outlets. Focus group studies, consumer surveys will occur in selected Chinese cities-Beijing, Nanjing, Shanghai and Guangzhou-administered by our Chinese collaborators under the supervision of the principal investigator.
Project Methods
We will conduct a thorough review of Chinese publications on laws and rules relevant to potential foreign marketing distributors in China and hold focus group studies with Chinese government officials, academic researchers. Consumer surveys will be carried out in selected cities about rankings of special attributes associated with livestock products purchased from food stores and supermarkets. Using the survey data, we will model the perception of product attributes with regard to consumer backgrounds. Research outputs will be published and disseminated through various avenues.

Progress 06/15/01 to 06/14/04

Outputs
The overall goal of this project is to assess the Chinese livestock marketing distribution system given passage of the 2000 US-China WTO Accession Agreement. For the first time, US livestock exporters acquired marketing distribution rights within China, thus bypassing Chinese importers and enabling US exporters to develop their own marketing distribution channels. Specific research objectives include to 1) collect information on laws/rules that govern China's livestock product marketing chain via a literature review & focus group studies; 2) conduct consumer preference surveys for livestock product attributes--product safety, labeling, brand name, and customized cuts; 3) estimate Chinese consumer preferences using ordered probit models; 4) conduct business surveys of Chinese livestock distributors on their business practices, performance and management philosophies; 5) estimate the relationship between business performance and business practices, and 6) disseminate the results in a variety of venues. Focus group studies and consumer surveys took place in selected Chinese cities -- Nanjing and Shanghai. Research results conclude that Chinese consumers cannot be treated as a homogenous group. Livestock distributors need to specify their market targets, e.g., specific consumer groups. It is imperative for livestock distributors to establish a good image of high product quality and low prices, since Chinese consumers rank these as the most important attributes.

Impacts
This project is giving North Carolina hog producers the kind of marketing and distribution information that is critical to helping them open a new international market for their product in China.

Publications

  • Peng, Xuehua, Mary A. Marchant, Xiang Dong Qin and Jun Zhuang.1 'Chinese Consumers' Preferences for Livestock Products.' Department of Agricultural Economics Staff Paper #442, University of Kentucky, July 2003.
  • Peng, Xuehua, and Mary A. Marchant. 'Spatial Price Linkages Between Chinese Regional Beef Markets.' Dept. of Agricultural Economics Staff Paper #439, Univ. of Kentucky, Jan. 2003.


Progress 01/01/03 to 12/31/03

Outputs
The overall goal of this project is to assess the Chinese livestock marketing distribution system given passage of the 2000 U.S.-China WTO Accession Agreement. For the first time, U.S. livestock exporters acquired marketing distribution rights within China; thus, bypassing Chinese importers and enabling U.S. exporters to develop their own marketing distribution channels. Specific research objectives include to 1) collect information on laws/rules that govern China's livestock product marketing chain via a literature review & focus group studies; 2) conduct consumer preference surveys for livestock product attributes--product safety, labeling, brand name, and customized cuts; and 3) estimate Chinese consumer preferences using ordered probit models. 4) conduct business surveys of Chinese livestock distributors on their business practices, performance and management philosophies; 50 estimate the relationship between business performance and business practices; 60 disseminate the results in a variety of venues. Focus group studies and consumer surveys took place in selected Chinese cities--Nanjing and Shanghai. Research results conclude that Chinese consumers cannot be treated as a homogenous group. Livestock distributors need to specify their market targets, e.g., specific consumer groups. It is imperative for livestock distributors to establish a good image of high product quality and low prices, since Chinese consumers rank these as the most important attributes. Additionally, livestock distributors, domestic or foreign, should place a priority on supermarkets as their major future outlet for livestock products.

Impacts
This project is giving North Carolina hog producers the kind of marketing and distribution information that is critical to helping them open a new international market for their product in China.

Publications

  • Peng, Xuehua, Mary A. Marchant, Xiang Dong Qin and Jun Zhuang. 2003. Chinese Consumers' Preferences for Livestock Products. Department of Agricultural Economics Staff Paper #442, University of Kentucky, July 2003.
  • Peng, Xuehua, and Mary A. Marchant. 2003. Spatial Price Linkages Between Chinese Regional Beef Markets. Dept. of Agricultural Economics Staff Paper #439, Univ. of Kentucky, Jan. 2003.


Progress 01/01/02 to 12/31/02

Outputs
The Chinese livestock market has become increasingly market oriented since 1992. After China entered the World Trade Organization in 2001, it started to embrace intense competition in its distribution system. Consumers have more choices of outlets and more varieties of products than ever before. In the past year, we finished analyzing information obtained from the previous year's survey, and conducted a full-scale survey with refined questionnaire in Nanjing and Shanghai. New information was obtained on consumers' preferences and their socio-economic backgrounds. In particular, consumers were asked about their opinions on GMO food products in China. In addition, materials and recently published regulations on Chinese livestock distribution were collected, and are awaiting further analysis.

Impacts
Seminars were hosted in China to introduce potential Chinese importers to U.S. livestock industries and import opportunities. One master student graduated with a thesis on Chinese Consumers' Preferences. Market information and import regulations about Chinese livestock industries were disseminated to some potential U.S. pork producers. Research results were presented at professional meetings, including at the annual AAEA meeting in Long Beach, California.

Publications

  • Xiang Dong Qin, William Amponsah and Xuehua Peng. "China As a Potential Market for U.S. Pork Exports."Accepted for publication Spring 2003 Review of Agricultural Economics.
  • Xiang Dong Qin, Mary Marchant and Xuehua Peng. "New Insights of Chinese Livestock Consumer Preferences." Presented as a selected paper at the annual AAEA meeting at Long Beach, California in July, 2002
  • Xuehua Peng, Mary Marchant and Xiang Dong Qin. "Chinese Consumers Preferences on Livestock Products." Submitted for publication at the AAEA annual meeting in Montreal, Canada in August 2003


Progress 01/01/01 to 12/31/01

Outputs
The project officially started on June 15, 2001. The literature review on China's livestock marketing channel has started since then. China's distribution system has evolved through four stages. The first stage was from 1949 to the initiation of China's reform in 1979. The second stage was the initial reform stage from 1979 to 1984. China gradually intensified its market reforms and distribution system reform stepped into a comprehensive reform and development stage from 1985-1991. Since 1992, there has been a breakthrough in the national understanding of the market economy. During this stage, which is from 1992 to present time, more trade barriers have been eliminated, and foreign investment has gradually entered the retail business. The majority of U.S. livestock exports to China is frozen and chilled. To understand how Chinese consumers view the frozen and chilled livestock products, a consumer survey was conducted in Nanjing and Shanghai in the summer of 2001. Survey data are under analysis.

Impacts
China have gradually established and fostered a commodity market system. The first phase of the project execution has helped us to better understand the Chinese livestock market. With the successful fieldwork in China, we have established a useful network for future business exploration and academic collaborative research. We have used the new market information that we acquired to help some small and independent hog producers in the US to open the variety pork meat market in China. We have also shared our knowledge with the extension agents in some southeast states.

Publications

  • No publications reported this period