No Pork Dumplings for Chinese New Year?
Since July 2019, the price of pork in China has skyrocketed due to the African swine fever crisis. Contrary to the previous universal prediction that it would only last for a short period of time, there has been no sign showing that the pork crisis would cease soon. Chinese netizens have been joking online about how they will not be able to eat pork dumplings this upcoming new year due to the unprecedented high price. In some cities, such as Nanning, coupons have been distributed by the governments to ease the crisis. What happened to the pork crisis and why is pork so important to China’s economy?
From July last year, the widespread African swine fever has killed over 100 million pigs across China, approximately one-third of the entire pig population in the country. Considering pork is the major player in China’s food market, the severe pork shortage available on the market has raised concerns from farmers, retailers, customers, and governments. According to the stats collected in October, retailer price has surged past 50 yuan per kilogram which is around 7 dollars. The price jump has become the biggest since 2016. As winter approaches, demand for pork will inevitably increase. However, due to the short supply and the exceptionally high price facing customers during this cold winter, whether or not people will use pork for their dumplings remains unknown. The customer price index rose 3% in September from a year earlier, showcasing the massive influence the swine fever has incurred on China’s food market and the general consumer economy.
How crucial is pork to China’s consumer economy? China is the world’s largest consumer and importer of pork. It is astonishing to learn that on average, Chinese consume 120 pounds of pork annually; half of the world’s pork is consumed in China. In 2017, people in China consumed 39.5 kilograms of pork per person, taking up 66% of the total meat consumption. Historically, pork was considered a luxury good back in the mid-twentieth century. Before the 1950s, most people in China got only 3% of their annual calorie intake from meat, and pork was rare in the Chinese diet. However, the government implemented the planned supply of pork in 1954, marking the starting point of the marketization of pork. In 1977, the policy of allowing residents to use food tickets to buy 1 kilogram of pork per person monthly was carried out. It was not until 1992 that the marketization of pork was finalized.
Although the price of pork has remained considerably affordable to Chinese people in the past few decades, it is noticeable that pork remains a key player in determining our CPI. Despite the economic growth and the descending percentage of food expenses out of our total expense, pork has remained 2.13% of our CPI. That explains part of the reason why the sudden increase in pork price has spurred a wide concern across the public and the government. It is even announced as an “important political task” to stabilize supply and prices.
What could happen if the price of pork remains high? To give you a rough idea, food still comprises 34% of China’s CPI. The rising price of pork could easily prompt up the prices of its substitutes such as chicken and lamb, further increasing the price of meat in general. CPI is closely related to inflation, and if the food price skyrocketed, inflation would speed for the country.
To combat the pork crisis, the Chinese government has implemented multiple solutions. The solutions include releasing some of its frozen pork reserves, introducing rationing to limit its citizens from purchasing a certain amount of pork, and encouraging farmers to raise more pigs. However, the short-term effects do not appear promising. How to deal with the severe pork shortage has remained a complicated problem for the government to grapple with.
Edited by: Urvi Agrawal
Sources:
https://www.economist.com/christmas-specials/2014/12/17/empire-of-the-pig
