Food safety in China opens doors for Australia’s agri sector

Dr Jue Chen looks at the huge opportunities for Australia’s agri sector as China’s growing middle class takes an increasingly stronger interest in where their food is coming from.

The Australian food and wine industry could be big winners as part of the Asian century. Demand for food in Asia is likely to double between 2007 and 2050, with China accounting for 43 percent of increased demand, particularly for beef, wheat and dairy products.

Indeed, the Chinese market is now considered to be a rising economic powerhouse and, along with a number of its near neighbours, has entered what has been dubbed ‘the Asian Century’. These nations have experienced dramatic economic growth and are developing an affluent urban middle class which, amongst other things, is attracted to the purchase and consumption of Australian food and wine.

Recent food security issues in China have highlighted the potential value of China and Australia sharing their common understanding and practices to develop a secure food industry. Although relatively small, Australia is an advanced player in the food industry and a major contributor to food industry innovation including matters related to food security and food sovereignty. As evidenced in the Government’s White Paper: Australia in the Asian Century, the food industry is strongly endorsed as a sector of engagement in the Asian region and especially in China.


Australia’s national objectives include being a globally competitive and productive player and, in the food context, for Australia to ‘enhance private and public engagement in the region and build better relationships between governments, industry and the community’.

China’s growing concern over food safety

Food safety issues have driven quality food production and consumption in China. The 2008 melamine scandal which involved one of China’s largest dairy firms SanLu, caused Chinese consumers to lose faith in the country’s dairy industry. Another incident involving China’s largest meat processor, Shuanghui, provoked the government to suspend its activities due to the presence of the illegal additive – Clenbuterol – which was found in pork meat. Previously both SanLu and Shuanghui were considered to be amongst the most reliable brands in China. Both these scandals have led Chinese consumers to express concern and disappointment in the food industry as they are now unsure which brands they can trust. Agri Winery Anqi Wang web

The dairy scandal prompted well-off consumers to turn to imported alternatives. Thus concerns about trust in the food supply chain following these food safety scandals, coupled with the rising purchasing power of Chinese consumers has been a key factor in the growth of quality food sector in China.

In December 2012, China Central Television reported that some poultry farmers had fed their chickens excessive amounts of antibiotics to help them survive in overcrowded coops. This was just another in a series of food safety scares that have eroded the confidence of Chinese consumers in recent years and have increased concerns about domestically produced food products. This increased concern about food safety means food safety has become a top priority on the agenda of the Chinese state councils. Chinese consumers doubt whether food products are really safe and whether they meet all the declared standards.

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Pictured right: Australian wineries hold substantial appeal to Chinese investors and the growing sophistication of the Chinese middle class palate. (Fergusson Winery in the Yarra Valley, Victoria. Courtesy Anqi Wang)

They tend to be suspicious of the quality of most food including food certification because they don’t believe they can rely on inspections and policy enforcement. However, they are eager to understand more about food and the food industry in general. Therefore, food logos and labelling are usually the consumer’s guarantee that the product has been produced in high quality environments.

Influencing the Chinese Consumer

Much has already been said about the various food safety scandals in China but it is worth reiterating here that issues relating to food safety seem to be paramount in the minds of consumers. This has prompted a number of agencies to review standards and the enforcement measures that support them and these issues have also been of interest within media circles. Indeed, food safety has a major impact on almost all other issues – including brand or logo recognition, certification – which in the past in China has generally been considered to be open to manipulation, and of course price, which, if high, will be accepted in China if it means the product meets more reliable food safety regulations. Dealing firstly with this issue of recognition of brands and logos, the food scandals in China have certainly raised awareness of the need for safer food.

The increase in the pace of home and working life in China has meant that health is a prominent driver, especially among office workers who are mindful of the need to balance work with fresh air, exercise and healthy lifestyles. As a result, good quality food products are popular among middle-aged and young adults with relatively high incomes. These groups make up the elite in society, and are part of a big consumer group. The rising sense of ‘enjoying life’ and ‘quality of life’ is beginning to drive up spending, not only among consumers in key cities but also in the second and third tier cities and this places Australian food and wine products in a good position to capitalise on this trend. Chinese buyers show more interest in tangible signs of quality, which are reinforced by the label.Agri Tasmanian Dairy Anqi Wang thumb


Freshness and texture are the quality indicators that have most influence on purchasing food products and some Chinese consumers are also influenced by fashion and trends in terms of drinking wine. As a result, they are reluctant to purchase products which have no visual signs of quality Challenges within the Chinese market include perceptions of freshness, transportation and shelf life as well as some price sensitivity. 

The market presents major opportunities for both local and international businesses but consumer trust and brand awareness are significant issues that need to be overcome to ensure that the benefits of this market accrue to those that seek to access this marketplace.

*Pictured: Australia’s dairy industry in particular, has a significant opportunity in assisting China in securing its long-term food security needs after the 2008 melamine scandal left many Chinese disgruntled by the country’s own domestic dairy sector. (Dairy Farm, Tasmania. Courtesy Anqi Wang)

The implications for Australia

In light of these circumstances, a team from Swinburne University of Technology comprising of myself, and my colleagues Professor Barry O’Mahony and Associate Professor Bruno Mascitelli at the Faculty of Business and Enterprise are organising a forum on ‘Knowledge Exchange of Quality Food Production and Distribution: China and Australia’ in Wuhan – one of the food bowls of China. The event, which runs from November 11 to 13, is supported by the Commonwealth Government through the Australia China Council of the Department of Foreign Affairs and Trade, and co-hosted by Swinburne University of Technology and the Chinese partner Huazhong Agricultural University. It seeks to pursue this key national objective by harnessing knowledge and expertise within Australia’s food chain for a constructive knowledge exchange with China and its industry experts, regulators and academics in the food industry.

The objective is to draw on existing partnerships to provide an opportunity for experts from both countries to acquaint themselves with current developments and contemporary challenges in the food sector. Both nations have challenges specific to their national circumstances which require discussion and debate. Topics to be discussed include new directions in food production, food security, supply chain, organic food, food regulation, supply issues, agri-tourism, and trade implications.

The ‘think tank’ and network meeting seeks to play a leading role in strengthening and enhancing current relationships within the region by increasing co-operation and research after the event. The expected short-term outcomes will include the documentation of opportunities for Australia-China collaboration as well as an understanding of where synergy can be applied across areas of food production and regulation in the future.

A long-term legacy will be an appreciation of the key issues and challenges that need to be addressed to improve business and government relationships between Australia and China. This will form the basis of a strategic plan developed to address key challenges in partnership with industry, government and the university partners.

*Dr. Jue Chen is originally from China. She is lecturer in the Faculty of Business and Enterprise at Swinburne University of Technology in Australia. In collaboration with her colleagues at Swinburne, Jue has completed a number of industry and government projects in the areas of food supply chain and consumer purchase behaviour.

To learn more about the ‘Knowledge Exchange of Quality Food Production and Distribution: China and Australia’ contact: Dr. Jue Chen E:


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