中国乳制品月报

Welcome to the March issue of Dairy Products China News.

Numbers on the performance of China’s economy continue to fuel the concern that the country’s export boom – at once its greatest source of strength and weakness – may slow in line with the falling demand in Europe and the US.  The country reported a trade surplus of USD27.2 billion USD in January but this turned into a deficit of USD31.5 billion in February. The optimistic view is that the Chinese New Year always causes this type of “blip” in the data.

Optimistic economists also generally take the view that China’s Government has enough options to stimulate the local economy if needed, and indeed it is now moving to relax restrictions on lending capacity at certain key banks. Investment spending is also an option but it’s already 45% of national GDP.  Growing domestic consumption is a must for a sustainable economic future.  Yet local retail sales rose at a nominal 14.7 % year on year to RMB3.37 trillion (USD533.8 billion) in January-February, far below the expected 17.3%.

This month we report on the latest figures from Yili and developments at companies such as Mengniu, Yakult and By-health which show a more positive picture at present, but most of the other dairy processors are having a harder time.  Growing dairy demand in China is a clear expectation over the medium-/longterm – we all hope the optimism being shown by most economists proves well-founded so that short-/medium term growth continues as well.