China's food industry, one of the key industries in the country, has retained its fast growth rate in recent years and is believed to have a bright future, despite some existing problems.
According to the National Bureau of Statistics, the industrial output value of the food sector accounts for 9 to 10 percent of the country's total industrial output value.
The food industrial output value was predicted to rise 10 percent to reach 940 billion yuan (US$113.5 billion) last year.
It was expected to gain 169.3 billion yuan (US$20.45 billion) of profits last year, 18.4 percent increase over the previous year.
Though the output value increased at an average annual rate of 13.1 percent during the 1980-2000 period, the industry still has some problems hindering its development, said Bi Qingyan, the deputy secretary-general of China National Food Industry Association.
"Nearly 80 percent of enterprises are small and medium-sized ones with backward techniques and equipment," he said, "the capacity utilization rate is only 45 to 65 percent."
He added that another problem is the irrational product mix and the unbalanced development among regions. The output value of the tobacco industry is 17 percent of the food industry's total, but its profits and taxes account for 60.57 percent of the output value.
The food industrial output value of the western area is 15.71 percent of the country's total, 60 percent of which are tobacco and alcoholic drinks.
In addition, the quality of food is still a problem.
"Domestic food enterprises are now at a disadvantage in competing with their foreign counterparts," Bi said, "but we believe that China's entry into the World Trade Organization(WTO) will not put great pressure on them, since the food market has already opened."
Many enterprises in industries producing beverages, biscuits and beer have been developing in competition.
Moreover, the inflow of foreign capital and advanced techniques will gear up the development of the industry.
The government's policy of Western Development and laying stress on agriculture will also push forward its development.
During the 10th Five-Year Plan period (2001-05), the food industry will focus on developing such fields as food processing, sugar refining, diary products and green products.
"We will readjust the industrial structure and will build enterprises on a large scale through annexation and reorganization," Bi said. "We are confident that the industry will continue to develop."
The industry's aim is that output value reaches 1.369 trillion yuan (US$165.3 billion), 10.31 percent of the total industrial output value by 2005.
It is also expected to export US$19.4 billion worth of food products by 2005, at an annual growth rate of 8 percent.
(China Daily January 6, 2002)
