China food chain

Last year, China reported almost 70 billion yuan (USD 8.63 billion) losses in discarded fruit and vegetables. Annual food production is estimated at USD 300 billion but over 20% of food is wasted during transportation due, according to the experts, to poor refrigeration. Contrary to popular belief, China's comparative advantage in the agricultural field does not lie in the production of staple crops such as rice and wheat, but rather in the production and processing of fruit and vegetables, horticultural goods and select livestock-related products according to a research report by Cheng Guoqiang, an expert with the State Council Development Research Centre. Thus China is faced with highly perishable products and the task of putting in place the necessary institutions, infrastructure and human capital needed to handle them. Cold-chain storage, handling and transportation are essential and warehousing and suitable storage facilities are equally vital for an efficient marketing system. The lack of controlled-atmosphere equipment makes it expensive to transport frozen and perishable produce and currently there is a lack of incentives in the value chain to instigate widespread use. Today's figures show the cold-chain equipment industry is at a level of 11 billion yuan (USD 1.35 billion) and is expected to grow by 15-20% a year. The per capita income in China is rapidly approaching USD 7500, which is the threshold for strong cold-chain demand. Rapid adoption of modern retailing practices in the cities will stimulate strong short-haul and regional cold-chain development in urban areas.