Opium, tea and salmon: Cracking the Chinese dream

Editorial
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Beijing’s pragmatism can have unequal consequences.

The 99-year lease expired in 1997. As long as Hong Kong had been subject to the British Commonwealth, as a trading post and canal into the Chinese mainland. Ownership came as a result of so-called “opium wars”. For many centuries, China had offered high-priced luxury goods to Europeans. Spices, silk and tea. Against cash settlement. They had not been as eager to import goods. Except for opium from British colonies.

This would the China’s political leadership eventually stop. They first started a war and then another. As they lost. Like a plaster on the wound, the British gained ownership of the Hong Kong trade hub.

The agreement was similar to the one that regulated the right of passage over the Suez Canal, which was returned and nationalised by Egyptian authorities in 1956.

Catches mice
Three years before the turn of the millennium, there was widespread consensus among political commentators and observers that China would now introduce Beijing-led communism and choke Hong Kong’s financial and political autonomy. Hong Kong was going to slow down. Free trade would be curbed.

But that did not happen.

22 years after the transfer of ownership, Hong Kong is still its own customs region and free trade zone. And the economy and foreign trade are flourishing like never before. Hong Kong still attracts large-scale foreign investment capital. At an arm’s length to Beijing.

Aslak Berge

The Chinese are pragmatic. They do not think the same way as us in the West.

“It doesn’t matter if the cat is black or white, only it catches mice,” said the father of the modern Chinese economic miracle, Deng Xiaoping.

In the freezer
After six years frozen out of China in the wake of the Liu Xiaobo Peace Prize, expectations were soaring when Norway’s then Foreign Minister Børge Brende met his Chinese counterpart Wang Yi in Beijing on December 19, 2016. Norway and China had become friends again. A breakthrough. Norwegian salmon farmers would again gain access to a 100,000 tonnes market in the East. A market that is guaranteed to grow a lot in the years to come. In the same way as the Chinese consumption of fish-meal, iron ore, mobile phones, gambling, internet trading and cars.

The best thing about salmon was that no one else in the world has the prerequisites to deliver the product on a large scale.

According to Pareto Securities’ analyst Henning Lund, Chinese consumers consumed salmon corresponding to seven sushi pieces throughout 2012. Virtually nothing. The potential for multiplying this should be simple, we believed.

After a whole year of getting certificates, permits, documents and formalities in place, it started. In January 2018, salmon exports to China increased by 500 per cent.

But then it stopped.

In January 2019, China imported salmon for EUR 28 million. Slightly less than the Netherlands. Still, almost one and a half year after the trade breakthrough, China is well behind of schedule.

Self-sufficiency
One side of the calculation is probably correct. China will consume a lot of salmon in the future. Much more than the country’s population has previously done. But they will, to a much greater extent than assumed, be self-sufficient.

Now one company, Pure Salmon, is planning to build land-based fish farms with a production capacity to produce up 100,000 tonnes of salmon on Chinese soil annually. This comes in addition to several other facilities that are under construction.

Today it became known that Wuchang Shipbuilding Industry will build a fully-submersible fish cage with capacity for one million fish, 5,000 tonnes in the Yellow Sea. The client, Rizhao Wanzefeng Fishery, is planning the construction of a number of such facilities, which are confusingly similar to SalMar’s “Ocean Farm 1”.

The Chinese are pragmatic. They do not think the same way as us in the West.