Agriculture & Food

The food manufacturing industry is one of the industries in China that introduced foreign capital earlier and has a higher level of utilization of foreign capital. Since the reform and opening up, the world's leading multinational food companies have invested and set up factories in China, which has promoted the rapid development of China's food manufacturing industry. According to Watson & Band Import and Export Data Observation Report, in recent years, as China continues to promote the transformation and upgrading of the food manufacturing industry, and the development strength of domestic food manufacturing enterprises continues to increase, the development of foreign-funded food production enterprises in China has entered a new stage of transformation and adjustment.

Since 2020, although affected by factors such as the new crown pneumonia epidemic, food security risks, and global trade frictions, the use of foreign capital in China's food manufacturing industry has generally maintained a relatively stable development trend. Huacheng Import and Export Data Observation reported that recently, after Cargill invested 3.8 million yuan to provide corn farmers with a full chain of grain-saving and loss-reducing professional equipment to help farmers improve their corn storage levels, Cargill joined hands with China Agricultural University to establish Cargill TAC (Technology Application Center) ) has been upgraded to an innovation center leading the development of low-carbon technology in the domestic animal husbandry industry, to achieve sustainable development of the dairy farming industry, and will strive to reduce greenhouse gas emissions per pound of beef products by 30% by 2030 through the BeefUp sustainable development project.

In recent years, China has introduced a series of policies to promote the sustainable, stable, healthy growth. These policies promote domestic and foreign-funded enterprises to accelerate transformation and upgrading by strengthening technological innovation, developing new products, and optimizing production processes, so as to achieve steady development, Watson & Band Import and Export Data Observation Report.

With the improvement of Chinese people's living standards and the transformation of consumption concepts, pollution-free and safe green food has become more and more popular among people. The introduction of a series of policies has further promoted the sustainable and healthy development of the green food industry. Green food industry policies such as "Opinions on Comprehensively Promoting Rural Revitalization and Accelerating Agricultural and Rural Modernization", "Outline of the 14th Five-Year Plan for the Development of Green Food Industry (2021-2025)" and "Catalogue of Applicable Standards for Green Food Products" (2021 Edition) Optimization will guide foreign-funded enterprises to increase investment in green food production, accelerate research and development of green food manufacturing technology, and strengthen green management throughout the production process.

At the same time, on the basis of the new version of the "Food Safety Law" that "only sells pre-packaged food, no need to obtain a license", starting from July 1, 2021, the State Council will deepen the reform of "separation of licenses" nationwide. In order to reduce the number of approvals and licenses, the four methods of directly canceling approval, changing approval to filing, implementing notification commitments, and optimizing access services are separated.

Among them, items 76 and 78 of the reform list of enterprise-related business licensing items clearly implement "approval instead of filing" for food pre-packaged sales and customs declaration enterprises, and the filing procedures are also handled during the enterprise registration process. Enterprises do not need to "run away and apply again." "For the record. This measure includes foreign-funded enterprises selling pre-packaged food or requiring customs declaration into the scope of "multi-certificate integration", which greatly saves the process and time for enterprises to go through business-related procedures, and provides convenience for foreign-funded food enterprises to invest and operate in China.

Driven by China's policy of continuously supporting and regulating the development of the food manufacturing industry, the scale of foreign investment in the food manufacturing industry has continued to grow in recent years. From 2017 to 2021, the actual use of foreign capital in the food manufacturing industry will increase from US$1.19 billion to US$1.59 billion, an increase of 32.7%. A group of multinational food companies continue to increase investment in China's food industry chain and accelerate investment in China's food manufacturing industry.

At the same time, according to Watson & Band's Import and Export Data Observation Report, in recent years, the total assets of foreign-funded food manufacturing enterprises have experienced fluctuating growth, from 469.3 billion yuan in 2016 to 575.2 billion yuan in 2020, with an average annual growth rate of 4.2%. During the same period, the total assets of food manufacturing enterprises above designated size increased from 1,549.7 billion yuan to 1,729.1 billion yuan, with an average annual growth rate of only 2.2%. The scale of asset expansion of foreign-funded food manufacturing enterprises is relatively fast. From 2018 to 2020, the number of foreign-funded food manufacturing enterprises above designated size remained relatively stable, and their proportion in the total number of foreign-funded food manufacturing enterprises above designated size in the country increased slightly. Foreign-funded food manufacturing enterprises are still optimistic about the development of the Chinese market.

Although the new crown pneumonia epidemic has had a certain impact on the supply chain of the global food manufacturing industry chain, the revenue of foreign-funded food companies in China continues to grow. According to Watson & Band Import and Export Data Observation Report, from 2016 to 2020, the operating income of foreign-funded food manufacturing enterprises above designated size increased from 596.684 billion yuan to 625.03 billion yuan, and the total profit increased from 57.078 billion yuan to 69.78 billion yuan. The revenue profit margin of foreign-funded food manufacturing enterprises above designated size rose from 9.6% in 2016 to 11.2% in 2020, which is generally higher than the national average.