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AS a result of the 100-day action plan that President Xi Jinping and U.S. President Donald Trump agreed upon at the Mar-a-Lago resort in Florida in April this year, China agreed to resume imports of U.S. beef in June.
The lifting of the ban has made the United States able to provide tender and delicious beef to nearly 1.4 billion new customers in China after 14 years of halted trade. According to Sam’s Club, a members-only chain store under U.S. retail giant Walmart, short rib imported from the States, which is very popular in China, is now priced at 178 yuan (US$26.5) per 500 grams in its Chinese stores and the availability is still limited. In 2003, China and 64 other countries all over the world implemented full or partial restrictions on U.S. beef imports because of cases of mad cow disease found in the country’s Washington State. The disease, formally known as bovine spongiform encephalopathy, is a brain-wasting condition that typically affects cattle.
To ensure quality and safety, China has set stringent requirements for imported U.S. beef this time: Cattle must be less than 30 months of age, be born and raised in the United States, Mexico or Canada, be free of growth hormones and feed additives and be slaughtered in the States.
Fueled by rising incomes and low domestic supply, China is now the world’s fastest-growing beef market, with imports increasing from US$275 million in 2012 to US$2.5 billion in 2016. According to the Ministry of Agriculture, China consumed a total of 8 million tons of beef last year. Until the ban in 2003, the United States was once China’s largest supplier of imported beef, accounting for more than 70 percent of the total intake. Due to the U.S. beef ban for the past 14 years, Chinese imports have been dominated by Australia, New Zealand, Canada, Brazil and Argentina.
An agreement may mean only a piece of paper for politicians, but it means much more and even livelihood for common people. Residents in Texas, Nebraska, Kansas, Iowa and other states who were highly anticipating the continuation of beef trade with China warmly welcomed the resumption. Frankly speaking, almost every sector of the U.S. beef industry, not only farmers, ranchers and the feed lot owners that fatten the cattle, but also the slaughterhouses, and trade and logistics companies can benefit from the good news from China.
According to official statistics, the U.S. cattle inventory was 93.5 million head of cattle at the beginning of 2017. Texas led the way with 12.3 million head, followed by Nebraska and Kansas each with 6.4 million head of cattle. With the reopening of the gigantic Chinese market, U.S. cattle ranching and other related industries are expected to grow steadily in the coming years.
Corn and beef are highly related. American farmers and ranchers look at corn in various forms. It may be the raw product corn or it may be the value-added beef industry. Beef exports to China will surely give more stimulation to corn production in the United States. With Nebraska as an example, corn and beef work in tandem with each other in the cattle-on-feed state. More than 6 million cattle in Nebraska are now fed on corn and corn byproducts. Cattle feed in the state is composed of roughage, raw corn, corn sweetener byproduct and ethanol byproduct, also known as distillers grains. This is a very sophisticated and synergistic way for American farmers to leverage their corn production and add value to their commodities.
Beef can not only beef up Sino-American economic relations, but also help balance China’s trade surplus with the United States. Despite the fact that the beef industry is only part of bilateral trade between China and the U.S., it could also be interpreted as positive signs for further deepening cooperation between the world’s two largest economies.
Moreover, in a highly interdependent world, good cooperation between China and the U.S. will not only benefit the businesses and people of the two countries, but also bring prosperity and stability to the entire world.
(The author is the editor-in-chief of the Shenzhen Daily with a Ph.D. from the Journalism and Communication School of Wuhan University.)