Knut Bjørn Lindkvist, Department of Geography, University of Bergen

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1 Chinese Norwegian Fishery Symposium August 2008 University of Tromsø. Chinese seafood industry- global challenge and opportunities for Norwegians Knut Bjørn Lindkvist, Department of Geography, University of Bergen Data from: Printed version: SNF-Report 20/05 Elektronic version: asp 1

2 Two articles in peer-review international journals from the report/workshop Possible projects for future collaboration Ocean University of China, Qingdao : The structure of the Salted Fish Processing Industry in China s Qingdao Area International Seafood Trade relations, 2 projects Shanghai Ocean University: The industrial chain of codfish industry in China Ningbo University: Salted Fish Market in the Zhejiang Area Yunnan University, Kunming: Development of market space for salted fish production 2

3 Questions: What are the characteristics of the Chinese aquatic industries? What are the comparative Chinese advantages in the global seafood industry? What are the opportunities for the Norwegians? China and Norway as fishing nations in the world 2004 (source: FAO 2006) , Capture Aquaculture China Peru India Indonesia USA Chile Japan Thailand Russia Norway 3

4 Theoretical basis Dependency theories Comparative advantages Internationalization theories From inland to coast 4

5 Extraordinary strong economic development Real GDP in China Billion USD * 2005* Year * Estimated by Business Monitor International Social insurances may increase production costs Type of insurances Old-age insurance Share of firms with social insurances for their employees 36% Medical insurance Disablement pensions Birth insurance 16% 22% 9% Unemployment insurance 17% 5

6 Consumption development for aquatic products in China per consume of aquatic product Demand elasticity=0,98 (Zhong 2005) Consequences for the future 1. Consumption of aquatic products from 200 yuan to 400 yuan 2. Consumption of aquatic products 25 kg per person to 50 kg per person in15 years! 3. Consequences for world production increase of 30 million metric tons 6

7 Fom 4000 to 8000 aquatic companies in ten years The dynamics behind the expansions 1. Cheap labour from the inland low production costs 2. Consumption increase Over capacity in the processing sector : Production: 9 million metric tons Production capacity : 13 million metric tons Lack of fish 7

8 Lack of fish 1: Aquaculture: 27 mill tons (2003) Inland: Much farming of carp fishes, consumption in the households At the coast: shellfish and seaweed + Only tons of marine species Lack of fish 2: Decrease in traditional Chinese fisheries Knut Bjørn Lindkvist: Tragedy of the commons 2 8

9 Lack of fish 2 and the consequences for China Fishermen and the aquaculture industries will gain a competitive advantage compared to the seafood aquatic industries in China Consequences: Higher prices and a more intense global competition for the fish The problem can not be solved through importation of black Russian fish tons illegal catches every year in the Barents sea 9

10 Problems for China Destruction of resources Increase of commodity prices Increase in consumption expenses for the Chinese Has China comparative advantages? Cheap labour: YES Big market: YES Efficient production: YES Resources: NOT ENOUGH 10

11 Norway and China Opportunities: The Chinese lack of fish is Norway s OPPORTUNITY Chinese demand increases prices of Norwegian commodities for seafood production China will become an important market for Norwegian farmed fish in the future China takes over the most standardized productions: filleting and freezing (and production of individual packages of products) Threats: China may buy illegal captured fish Opportunities for Norwegians? And obviously the answer is: The richest men in Norway invest in fish production activities 11

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