The Intricacies of Chinese Sustainable Seafood Consumption

August 6, 2021

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Edition six of 2021

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China is the world’s largest market for seafood. Understanding this market is therefore crucial when exploring seafood sustainability. That’s why with this article we want to examine the priorities, assumptions and perceptions that drive the Chinese shrimp market in particular, and what all of this means for sustainable seafood consumption in general.

China’s seafood market at a glance

China is the world’s top seafood importer: in 2020, it imported 3.86 million MT, worth $12.7 billion. With rapid urbanization and rising incomes, consumers are demanding a wider range of seafood products1. In particular, China has been experiencing an increase in shrimp imports. As the second largest shrimp importer worldwide, it imported 738,703 MT of shrimp in 2020, an impressive 280% more than in 2016. This growth has provided an opportunity for global shrimp producers to diversify their export: instead of only exporting to saturated markets like the US, Europe and Japan, they are now also exporting to this large and expanding Chinese market2. Needless to say, China is an influential market when it comes to seafood consumption.

Sustainable seafood certification in its infancy

Seafood sustainability certification is relatively new to the Chinese. Although the idea that producers should invest in certification and that buyers should exercise their market power to choose sustainable seafood is common in the US and North-western Europe, this concept is still in its infancy in China3. Though seafood sustainability certification standards such as the Marine Stewardship Council (MSC), Aquaculture Stewardship Council (ASC) and Best Aquaculture Practices (BAP) are present in China, their efforts are focused on the certification of seafood produced in China, but which is then exported to foreign markets.

Consequently, the consumption of certified seafood in China is low. Though a small number MSC, ASC and BAP-labelled products can be found in high-end supermarkets, hotels and restaurants, most of it is imported luxury seafood. A quick search of online retail web shops such as Alibaba and JD.com doesn’t find any products carrying sustainability certification. However, these web shops do reveal food safety, quality and social certifications such as BRC, ISO and SA8000. JD.com also indicates whether a product has undergone the nucleic acid test to prove that no trace of COVID-19 can be detected.

Seafood sustainability certification is relatively new to the Chinese. Although the idea that producers should invest in certification and that buyers should exercise their market power to choose sustainable seafood is common in the US and North-western Europe, this concept is still in its infancy in China.



Government and civil society sustainable seafood efforts

While the consumption of sustainability certified seafood is currently negligible in China, government and civil society efforts to promote seafood sustainability do exist. That being said, government attention is clearly more focused on improving seafood production: aquaculture policy development centres around administering zoning permits, developing a farming licence and registration system, and controlling seed quality and food safety regulation. Traceability is also high on the agenda, and policies to improve traceability have been introduced, mostly relating to limiting food safety risks3.

Government efforts have also taken the form of reducing the consumption of specific aquatic species. For example, the Chinese government is a signatory to the Convention on International Trade in Endangered Flora and Fauna (CITES) and consuming some endangered species has been banned under Chinese law. Probably the most influential government policy in terms of sustainable seafood consumption was China’s anti-corruption campaign under Xi Jinping between 2012 and 20173.

One of the key targets of this campaign was the practice of banqueting by government officials. Traditionally, during banquets, eating unsustainable and endangered seafood such as shark fins and live reef fish was common. But the campaign has had the positive effect of considerably reducing consumption of these species in the banqueting sector. Another target of the campaign was the “grey trade” in Chinese border regions, where products are smuggled into China from locations such as Vietnam and Hong Kong to avoid the higher tariffs imposed on the mainland. This trade is a major barrier when it comes to traceability and the government has been taking action: in 2018 there was a crackdown on shrimp entering the Chinese market through Vietnam’s Hai Phong Port, significantly reducing the amount of shrimp coming into China through the illicit Vietnam route.

Civil society organizations, too, are promoting sustainable seafood production and consumption, and NGOs dedicated to this have been popping up. For example, China Blue Sustainability Institute, founded in 2015, was China’s first NGO committed to promoting sustainable fisheries and aquaculture. It’s involved in a number of fisheries and aquaculture improvement projects, and has launched China’s first seafood sustainability database, iFISH, which assesses the sustainability of about 50 seafood species. The Qingdao Marine Conservation Society, also involved in implementing a number of improvement projects, conducts seafood sustainability ratings in collaboration with Monterey Bay Aquarium’s Seafood Watch and is developing a China Seafood Sustainability Assessment and Education Program. So if information about sustainable seafood is available, why are Chinese consumers not demanding sustainable seafood? Let’s take a look at some possible reasons.
 
Food safety and freshness over sustainability 

In a recent study of 4,221 Chinese consumers, food safety was found to be the most important factor affecting purchasing decisions. And concerns over food safety have only increased with COVID-19. Before the pandemic, food safety concerns were driven by frequent incidents related to, for example, the overuse of antibiotics in shrimp farming. But food safety concerns have changed and grown as a result of the COVID-19 pandemic: containers of shrimp are detained out of fear of contamination, there is overall distrust amongst consumers of imported, frozen shrimp products, and there are currently strict inspections and border controls in place.

Another reason why there is no a market for certified seafood is that Chinese consumers have a clear preference for fresh seafood products over frozen products, and most certified seafood is frozen.

Food safety was found to be the most important factor affecting purchasing decisions. Before the pandemic, food safety concerns were driven by frequent incidents related to, for example, the overuse of antibiotics in shrimp farming.



Without consumer demand, there’s no market incentive

Perceptions about environmental sustainability in China currently don’t translate into market pressures to supply sustainable seafood to the domestic market5. Though a study in 2012 found that consumers were willing to pay more for seafood with an eco-label6 and a recent study found that consumers were willing to pay a premium price for Pacific white shrimp (L. vannamei) with traceability assurance4, both studies were conducted among a small sample of consumers, and were biased towards educated and higher income sections of the population. These findings therefore can’t be used to make assumptions about the preferences of the general population.

Without consumer demand for sustainable seafood, importers are not incentivized to require sustainability certification for seafood.

ShrimpTails spoke to some Latin American exporters that currently export shrimp to China who confirmed that food safety remains a higher priority: “While Chinese importers appreciate the overall sustainability in farms, they’re usually more concerned about the safety of the product”, one exporter told us.
 

Cultural perceptions and drivers

There are also a number of socio-political and cultural factors that explain the lack of consumer interest in sustainable seafood. There appears to be a strong perception that the responsibility for environmental protection lies with the government and not with consumers or the market. A study in 2016 showed that seafood consumers in Beijing and Shanghai agreed strongly with the following statement: “The protection of endangered species can be better achieved by government regulations, compared to public awareness campaigns”. The population’s reliance and trust in the government is a trait firmly embedded in Chinese society and this is due to the government’s historically central role in planning and decision-making. As such, sustainability is believed to be the state’s responsibility and is associated with state regulation, not with markets.

What’s more, in the face of rapid modernization in China, the average consumer is simply not yet aware of seafood sustainability. Yet, somewhat paradoxically, the concept of sustainability is firmly embedded in Chinese culture according to Han Han, CEO of China Blue: Chinese culture emphasizes living in harmony with nature. As an old Chinese saying goes: “The sky [representing nature] and human beings are integrated into one”. However, for the past 60 to 100 years, the Chinese have experienced a very dramatic transition from a traditional society to modern one. Processes of modernization, industrialization and globalization have had significant impacts on both the traditional social practices of the Chinese and on the natural environment. While there is an increasing awareness of environmental issues – such as air pollution – which have direct impacts on people’s daily lives, concerns about seafood sustainability are simply not on the radar of consumers just yet.

What does the future hold for seafood sustainability in China?

Within the next 10 to 20 years, the government’s priority will be improving seafood production and governance. Urgency lies with creating registration systems, developing sound infrastructure for efficient and safe production, and removing illegal farming and fishing. Next to this, energy will go into improving governance in the seafood industry through inspection and traceability systems. As more safe, sustainable and traceable seafood is produced in China, the supply of domestically produced seafood adhering to higher food safety requirements and with a lower environmental footprint is likely to increase.

Awareness of environmental issues is increasing. Educational campaigns, marketing and visibility about the importance of seafood sustainability can help to raise its profile. Furthermore, since a lot of seafood is consumed in food service outlets (for example, in hotels, restaurants and at food stalls), involving the food service segment to boost demand for sustainable seafood could also provide a promising avenue for increasing demand for sustainable seafood2.

Currently, safety and quality are what consumers look for in their shrimp. Perhaps linking sustainable farming and fishing practices to the production of high-quality and safe products could provide a way to convince consumers about the importance of sustainability3. After all, it’s logical that shrimp that grow in a controlled, unpolluted and sustainable ecosystem will be safer and of higher quality.

The dynamics described in this article suggest that the conditions for applying sustainable seafood certification as a means to improve sustainable consumption in China are not yet present. But China is working on cultivating a sustainable seafood sector, albeit in a different way to those that have been developed in other large seafood markets. Whether China will, over time, adopt international seafood sustainability certification, develop its own sustainability standards or take an entirely different path towards sustainability remains to be seen.

References
1 Yunyun Dai, Yong-Ming Yuan, Yuan Yuan, Zhen Zhou and Hongyan Zhang (2020). Factors influencing Chinese consumer attitudes on the safety of aquatic products. Journal of the World Aquaculture Society. https://onlinelibrary.wiley.com/doi/full/10.1111/jwas.12823
2 Ou Wang and Simon Somogyi (2018). Chinese consumers and shellfish: Associations between perception, quality, attitude and consumption. Food Quality and Perception. https://www.sciencedirect.com/science/article/abs/pii/S0950329318300090
3 Fabinyi (2016). Sustainable seafood consumption in China. Marine Policy. https://www.sciencedirect.com/science/article/pii/S0308597X16303402
4 Shijiu Yin, Fei Han, Mo Chen, Kai Li, Qi Li (2020). Chinese urban consumers’ preferences for white shrimp: Interactions between organic labels and traceable information. Aquaculture. https://www.sciencedirect.com/science/article/abs/pii/S0044848619313547
5 Michael Fabinyi, Kate Barclay and Hampus Eriksson (2017). Chinese Trader Perceptions on Sourcing and Consumption of Endangered Seafood. Frontiers in Marine Science. https://www.frontiersin.org/articles/10.3389/fmars.2017.00181/full

6 Pei Xua, Yinchu Zeng, Quentin Fong, Todd Lone, Yuanyuan Liu (2012). Chinese consumers’ willingness to pay for green- and eco-labeled seafood. Food Control. https://www.sciencedirect.com/science/article/abs/pii/S0956713512001703

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