China’s aquaculture sector will continue to struggle for cash as long as obstacles like inadequate insurance cover persist, according to a leading private equity manager seeking investment opportunities in Chinese seafood.
Chinese investor Sun Yan, head of Beijing Tai You Investment Co, believes seafood has changed from “non-essential food” to a “blue granary.” The seafood market in China is “full of opportunity” thanks to technological breakthroughs in mariculture and logistics that make transport of fresh and live product easier and quicker, Sun said.
Rising Chinese demand for seafood means aquaculture is becoming an investment theme, said Sun.
“However, the industry still needs top technology," he said.
Sun pointed out various investment hurdles in China seafood sector at a ‘Modern Fisheries & Finance Workshop’ forum hosted by the Ocean University of China, one of the country’s leading centers for research and training in aquaculture and fisheries.
China has struggled to extend insurance cover to its fragmented aquaculture sector, which remains largely unprotected from frequently inclement weather. Sun called for a “robust insurance system” for China’s aquaculture sector in order to assure would-be investors.
“[Insurance] is central to the industry’s prestige…I hope more investment comes here but it needs a strategic direction,” Sun said. “I hope we find a breakthrough point.”
Sun’s words were echoed by Gong Qing Li, head of the school of aquatic products at the Ocean University. Gong called for “concrete proposals and professional policy treatment” from the Ministry of Agriculture. China needs to “optimize” fishery resources by improving environment protection and food safety, he added.
Another speaker at the workshop, professor Dong Shuang Lin, suggested China’s seafood sector needs money to “intensify” its aquaculture in order to compete.
“Why is Western industry aquaculture so good? Their costs are high but quality is high too,” Lin said. “Intensification is the only solution for China. [Private] finance and R&D and industrialization are the way ahead.”
China’s seafood sector remains highly state-driven. The government plans to raise standards through the establishment of 2,500 demonstration parks – the appellation is given to leading producers and companies – by 2020. China’s use of demonstration zones or farms has angered seafood producers in the U.S. and elsewhere, who see the facilities as benefitting unfairly from government subsidies.
