Required Report - public distribution

**Date:** 2/13/2004

**GAIN Report Number:** CH4003

CH4002

**China, Peoples Republic of**

**Livestock and Products**

**Semi-Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Maurice House

U.S. Embassy

**Prepared by:**

Casey Bean & Zhang Jianping

**Report Highlights:** China suspended imports of US live cattle and
bovine products on December 25, 2003, after news of the single BSE case
in the United States. The news has not impacted China's beef consumption
levels, a country that produces 99.5 percent of its beef supply. China's
calf crop during 2004 is forecast at 48.8 million head, an increase of
two percent from last year. Dairy cow numbers in 2004 are estimated to
be 30 percent above the previous year as the result of strong consumer
demand for dairy products. China's swine production this year is
forecast at 44.9 million head, a slight increase from last year, while
pork imports will reach 153,000 MT in 2004, a three percent increase.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[**Beef 3**](#beef)

[Summary 3](#summary)

[Production 4](#production)

[Dairy cattle production continues strong growth in 2004, driven by
strong consumer demand for dairy products
4](#dairy-cattle-production-continues-strong-growth-in-2004-driven-by-strong-consumer-demand-for-dairy-products)

[Beef's share of China's total meat consumption in 2004 continues to
rise
4](#beefs-share-of-chinas-total-meat-consumption-in-2004-continues-to-rise)

[Feed and beef prices rise in 2003 "post-SARS", while in 2004 the pace
will slow
4](#feed-and-beef-prices-rise-in-2003-post-sars-while-in-2004-the-pace-will-slow)

[Trade 5](#trade)

[Following US BSE News, China suspends imports of US live cattle and
products on December 25, 2003
5](#following-us-bse-news-china-suspends-imports-of-us-live-cattle-and-products-on-december-25-2003)

[Length of China's import suspension uncertain---US-China technical
exchanges remain vital
5](#length-of-chinas-import-suspension-uncertainus-china-technical-exchanges-remain-vital)

[PSD Cattle 6](#psd-cattle)

[PSD Beef 7](#psd-beef)

[Beef Tariffs 8](#beef-tariffs)

[Pork 9](#pork)

[Summary 9](#summary-1)

[Production 10](#production-1)

[China, world's largest swine producer, forecast to slaughter 580
million head in 2004, a slight increase from last year
10](#china-worlds-largest-swine-producer-forecast-to-slaughter-580-million-head-in-2004-a-slight-increase-from-last-year)

[Trade 10](#trade-1)

[Though China is 99.7 percent self-sufficient in pork, imports forecast
to continue increasing in 2004 with US pork leading the pack
10](#though-china-is-99.7-percent-self-sufficient-in-pork-imports-forecast-to-continue-increasing-in-2004-with-us-pork-leading-the-pack)

[USDA and Chinese Authorities continue technical talks regarding China's
import quarantine measures
10](#usda-and-chinese-authorities-continue-technical-talks-regarding-chinas-import-quarantine-measures)

[PSD Swine 11](#psd-swine)

[PSD Pork 12](#psd-pork)

[Pork Import and Export Tables 13](#pork-import-and-export-tables)

[Pork Tariffs 14](#pork-tariffs)

# Beef

## Summary

China suspended imports of live cattle and bovine products from the
United States on December 25, 2003, due to a single case of BSE (Mad Cow
Disease) in Washington State. The official import suspension impacts
annual US exports to China totaling \$10 million for beef and \$30
million for offals. China also suspended, unofficially, imports of US
non-bovine products such as poultry product-containing pet foods,
porcine solubles and poultry meals, in addition to OIE guideline-based
"non-risk" bovine products such as protein-free tallow, semen and
embryos.

APHIS and FAS China continue to request that the Chinese Government
clarify its BSE regulatory actions and adhere to international standards
set forth by OIE guidelines.

China's overall beef imports in 2004 are forecast to remain the same as
last year, despite BSE cases in both Canada and the US in 2003, because
China is expected to shift import sources to Australia, New Zealand and
Brazil. Higher international beef prices and restrictive quarantine
inspections in China may restrict growth of the country's imports during
the year.

During December 2003, FSIS and FAS successfully negotiated a revision of
the Export Health Certificate (FSIS 9535-I) with Chinese quarantine
authorities, AQSIQ, for meat exports to China. From March 1, 2004, China
will no longer accept any previous versions of the certificate. The new
certificate was implemented to reduce the use of false certificates.

# Production

## Dairy cattle production continues strong growth in 2004, driven by strong consumer demand for dairy products

## 

As a result of the Ministry of Agriculture (MOA) increasing China's
total cattle inventories (January to September 2003) by 1.5 percent,
post increased our forecast of cattle numbers for 2004 by 1.7 percent to
181 million head. Dairy cows numbers are forecast at 9 million head, an
increase of 30 percent over 2003, while beef cow numbers are forecast at
59.4 million head, up about one percent. Strong demand for dairy
products continues to drive production in China's dairy industry.

According to MOA, 14.5 million small family farms raise beef cattle in
China, accounting for 83 percent of total cattle output with annual
slaughter of less than 50 head. The top three cattle producing provinces
are Henan (6.1 million head slaughter), Sichuan (1.3 million) and Hebei
(1 million). Only about 900 farms in China are considered large-sized
with annual slaughter of 500-999 head, accounting for 1.6 percent of
total production, mainly located in the Northeast or Hebei.

## Beef's share of China's total meat consumption in 2004 continues to rise

# 

China's beef production is estimated to reach 6.6 MMT (million MT) in
2004, an increase of 6.4 percent from 2003 based on MOA's recent
forecasts for last year. China is expected to slaughter 47.2 million
beef and dairy cattle, up 5 percent. The beef share of China's total
meat production rose to 9 percent in 2003, while pork's share remained
stable.

China's annual GDP is expected to grow at 8 percent annually in the next
couple of years. As a result, meat demand is forecast to continue rising
during 2004 and beyond. More disposable income will lead to a more
diverse diet and alternatives to eating pork, particularly since beef is
considered a healthier food in China.

The Chinese Government continues to focus policy efforts on the
livestock structural adjustment to stabilize grain-fed animal size and
faster grass-fed animal size. Based on post's visits to beef production
areas, farmers in traditional grain areas are permitted to convert 20
percent of farmland, while farmers in suburbs are allowed to convert 30
percent of farmland to feed grain or forage grass.

## Feed and beef prices rise in 2003 "post-SARS", while in 2004 the pace will slow

As a result of the "post-SARS" recovery in beef consumption in China,
demand for beef and grain was strong. As a result, beef prices remained
higher through the later half of 2003. The average increase in beef
prices was 8 percent. Although feed prices increased rapidly due to
higher grain prices, the beef price increases were above that of feed.
Fattened beef cattle can bring about RMB 500 (\$60.00) profit for cattle
farmers. The forecast for 2004 is a slowing of price increases for feed
and beef. The outbreak of avian influenza in China, depending on the
number of culled birds, will likely impact overall feed prices during
the spring.

The detection of BSE cases in both Canada and the United States is not
forecast to impact China's beef consumption levels. China's overall beef
self-sufficiency is about 99.5 percent. China's ban on US beef,
implemented last December, will only impact beef sales at high-end
hotels and restaurants where the overall volume is still quite limited.

## 

# Trade

## Following US BSE News, China suspends imports of US live cattle and products on December 25, 2003

Because China is expected to shift imported beef sources to Australia,
New Zealand and Brazil, post forecasts China's beef imports will reach
29,000 MT in 2004, about the same as last year. China's imports of dairy
cattle are forecast to rise to 50,000 head, an increase of 25 percent.
China will also shift live cattle imports to Australia and New Zealand.

China officially suspended imports of all US beef and beef products last
December 25, including meat, semen and embryos and meat and bone meal.
An unofficial ban appears to also be in place for non-bovine products
such as pet foods and porcine solubles. China excluded from its import
suspension dairy products, hides/skins and bovine gelatin for photo use.

Despite efforts by FAS China to convince Chinese authorities that US
beef that had already cleared Customs and entered China should be
excluded from any regulatory actions, China also suspended quarantine
clearances of all "pipeline" US beef products. These are shipments,
already certified by FSIS, which arrived at a port without Customs
clearance or are on the water en route to China. China's actions also
impacted containers of US beef at Hong Kong ports originally destined
for Mainland China. As a result, traders report that US beef supplies
continue to accumulate at Hong Kong warehouses and ports.

## Length of China's import suspension uncertain---US-China technical exchanges remain vital

It is uncertain how long China's US beef and product import suspension
will remain in place. As evidence, China has not yet lifted its import
ban on any BSE countries including the EU, Japan and Canada. The US
Government continues to work with Chinese authorities, providing
information about the USDA BSE investigation, new BSE-prevention
measures and efforts to re-open international markets including China.

## PSD Cattle

  --------------------- ---------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                                

  **Country**           **China,                                               
                        Peoples                                                
                        Republic                                               
                        of**                                                   

  **Commodity**         **Animal                                    (1000      
                        Numbers,                                    HEAD)      
                        Cattle**                                               

                        2002       Revised    2003       Estimate   2004       Forecast

                        USDA       Post       USDA       Post       USDA       Post
                        Official   Estimate   Official   Estimate   Official   Estimate
                        \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year Begin**            01/2002               01/2003               01/2004

  Total Cattle Beg.     128242     128242     130848     130848     133023     133023
  Stks                                                                         

  Dairy Cows Beg. Stks  5662       5662       6870       6873       8300       9003

  Beef Cows Beg. Stocks 58258      58258      57193      58846      56000      59428

  Production (Calf      47164      47164      48000      48000      48860      48860
  Crop)                                                                        

  Intra EC Imports      0          0          0          0          0          0

  Total Imports         11         11         25         40         30         50

  TOTAL Imports         11         11         25         40         30         50

  TOTAL SUPPLY          175417     175417     178873     178888     181913     181933

  Intra EC Exports      0          0          0          0          0          0

  Total Exports         58         58         50         51         48         48

  TOTAL Exports         58         58         50         51         48         48

  Cow Slaughter         0          0          0          0          0          0

  Calf Slaughter        0          0          0          0          0          0

  Other Slaughter       44011      44011      45000      45014      45900      47264

  Total Slaughter       44011      44011      45000      45014      45900      47264

  Loss                  500        500        800        800        800        400

  Ending Inventories    130848     130848     133023     133023     135165     134221

  TOTAL DISTRIBUTION    175417     175417     178873     178888     181913     181933

  Calendar Yr. Imp.     0          0          2          2          4          0
  from U.S.                                                                    

  Calendar Yr. Exp. to  0          0          0          0          0          0
  U.S.                                                                         
  --------------------- ---------- ---------- ---------- ---------- ---------- ----------

## PSD Beef

  --------------------- ---------- ---------- ---------- ---------- ----------- ----------
  **PSD Table**                                                                 

  **Country**           **China,                                                
                        Peoples                                                 
                        Republic                                                
                        of**                                                    

  **Commodity**         **Meat,                                     (1000 MT    
                        Beef and                                    CWE)(1000   
                        Veal**                                      HEAD)       

                        2002       Revised    2003       Estimate   2004        Forecast

                        USDA       Post       USDA       Post       USDA        Post
                        Official   Estimate   Official   Estimate   Official    Estimate
                        \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]     \[New\]

  **Market Year Begin**            01/2002               01/2003                01/2004

  Slaughter (Reference) 44011      44011      45000      45000      45900       45900

  Beginning Stocks      0          0          0          0          0           0

  Production            5846       5846       6020       6200       6260        6600

  Intra EC Imports      0          0          0          0          0           0

  Total Imports         28         26         27         29         30          29

  TOTAL Imports         28         26         27         29         30          29

  TOTAL SUPPLY          5874       5872       6047       6229       6290        6629

  Intra EC Exports      0          0          0          0          0           0

  Total Exports         44         45         40         43         38          45

  TOTAL Exports         44         45         40         43         38          45

  Human Dom.            5830       5827       6007       6186       6252        6584
  Consumption                                                                   

  Other Use, Losses     0          0          0          0          0           0

  TOTAL Dom.            5830       5827       6007       6186       6252        6584
  Consumption                                                                   

  Ending Stocks         0          0          0          0          0           0

  TOTAL DISTRIBUTION    5874       5872       6047       6229       6290        6629

  Calendar Yr. Imp.     18         18         19         23         21          0
  from U.S.                                                                     

  Calendar Yr. Exp. to  0          0          0          0          0           0
  U.S.                                                                          
  --------------------- ---------- ---------- ---------- ---------- ----------- ----------

## Beef Tariffs

  ----------------- ----------------- --------- ------- -------- ------------
  Tariffs on Cattle                                              
  and Beef,                                                      
  Effective January                                              
  1, 2004                                                        

                                                                 Effective

                                      General   MFN     V.A.T.   Rate
                                                        1/       

                                                                 (mfn+vat)

  Cattle, Breeding  0102.1000         0%        0%      13%      13.0%

  Cattle, Other     0102.9000         30%       10%     13%      24.3%

                                                                 

  Beef, Fresh or                                                 
  chilled                                                        

  Carcass &         0201.1000         70%       20%     13%      35.6%
  half-carcass                                                   

  Other cuts with   0201.2000         70%       12.0%   13%      26.6%
  bones                                                          

  Other cuts,       0201.3000         70%       12.0%   13%      26.6%
  boneless                                                       

  Beef, Frozen                                                   

  Carcass &         0202.1000         70%       25%     13%      41.3%
  half-carcass                                                   

  Other cuts with   0202.2000         70%       12.0%   13%      26.6%
  bones                                                          

  Other cuts,       0202.3000         70%       12.0%   13%      26.6%
  boneless                                                       

  Source: China                                                  
  Customs                                                        
  ----------------- ----------------- --------- ------- -------- ------------

  ------------ ------------ ---------- ------------ ------------ ------------
  Tariffs on                                                     
  Beef, Offal                                                    
  Effective                                                      
  January 1,                                                     
  2004                                                           

                                                                 Effective

                            General    MFN          V.A.T.       Rate

                                                                 (mfn+vat)

                                                                 

  Beef Offal   0206.1000    70%        12.0%        13%          26.6%

               0206.2100    70%        12.0%        13%          26.6%

               0206.2200    70%        12.0%        13%          26.6%

               0206.2900    70%        20.0%        13%          35.6%

  Source:                                                        
  China                                                          
  Customs                                                        
  ------------ ------------ ---------- ------------ ------------ ------------

# Pork

## Summary

China, the world's largest swine producer, is forecast to produce 44.9
MMT of pork in 2004, an increase of 3 percent from last year. Post
adjusted upwards the PSD table's pork production numbers for 2003 and
2004 based on MOA's recent statistics for 2003. China's expanding
economy and disposable consumer income continues to benefit livestock
producers.

During 2003, China's swine and pork production rapidly recovered from
the SARS outbreak impact on consumption because both were only affected
for about two months. By the time the SARS situation stabilized in June
2003, pork consumption and production rapidly recovered to normal
levels. As a result, the year's total production level steadily
increased. Although pork prices fell during the first half of 2003,
lower feed prices helped compensate farmers. Additionally, China's
larger-scale swine farmers, i.e., those slaughtering over 50 head per
year, are increasing in number.

China's pork imports in 2004 are forecast to increase by 3 percent to
153,000 MT due to continued growth in consumer demand for feet products.
China's pork exports are estimated to increase 30 percent up to 367,000
MT. Although China's exports to Russia have decreased due to Russia's
import quota restriction, increased exports to other Asian countries
have filled up the gap.

Post revised upwards China's pork import numbers for 2002 to 2004 based
on China Customs data provided to the World Trade Atlas.

# Production

## China, world's largest swine producer, forecast to slaughter 580 million head in 2004, a slight increase from last year

China is forecast to slaughter 580 million swine in 2004 due to strong
pork prices and the continued expansion of China's economy and
disposable income. Pork price increases will likely slow down after
March 2004 in part due to lower feed prices resulting from lackluster
feed demand from the Chinese poultry industry now facing an outbreak of
Avian Influenza.

According to MOA, China has about 99 million small family farms raising
over 300 million pigs with an annual slaughter rate of less than 10 head
(59 percent of the total slaughtered). The top three swine producing
provinces in China are Sichuan, Henan and Hunan, all located in
traditional grain production areas. Swine farmers may also raise cattle,
pigs and poultry. Large-sized farms, typically located along the coastal
areas of Guangdong, Zhejiang and Fujian, represent only 5 percent of
China's total slaughter. These farms have between 3,000 and 10,000 head.
Swine production, like cattle and poultry, is highly dispersed
throughout the country. This production dispersion complicates China's
efforts to implement a complete and effective veterinary system.

During 2004 the growth of China's per capita pork consumption will
continue to lag behind the growth of beef.

# Trade

## Though China is 99.7 percent self-sufficient in pork, imports forecast to continue increasing in 2004 with US pork leading the pack

Post revised upwards our PSD table's pork imports for 2002-2004 based on
China Customs' data provided to the World Trade Atlas. According to
trade contacts, China's reported world import figures are more accurate
than the individual country numbers. China Customs no longer breaks-out
China's imports from Hong Kong.

China's imports of pork are forecast at 153,000 MT during 2004, about
three percent above last year. US pork exports to China account for over
50 percent of both pork and offal trade to Mainland China, and the US
share of China's pork imports via Hong Kong is even greater. Denmark is
the other major pork supplier to China. Canada supplies China some pork
as well.

## USDA and Chinese Authorities continue technical talks regarding China's import quarantine measures

In December 2003, USDA and Chinese meat safety officials held technical
talks in Beijing to discuss China's increasingly stringent application
of pathogen standards on raw meat products. The meeting focused on
understanding each other's food safety laws and regulations, regulatory
procedures, standards, tests, monitoring system and enforcement methods.

## PSD Swine 

  --------------------- ---------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                                

  **Country**           **China,                                               
                        Peoples                                                
                        Republic                                               
                        of**                                                   

  **Commodity**         **Animal                                    (1000      
                        Numbers,                                    HEAD)      
                        Swine**                                                

                        2002       Revised    2003       Estimate   2004       Forecast

                        USDA       Post       USDA       Post       USDA       Post
                        Official   Estimate   Official   Estimate   Official   Estimate
                        \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year Begin**            01/2002               01/2003               01/2004

  TOTAL Beginning       457430     457430     462917     462915     467902     467327
  Stocks                                                                       

  Sow Beginning Stocks  37250      37250      37800      37800      38367      38367

  Production (Pig Crop) 575212     575212     575300     575300     580000     580000

  Intra EC Imports      0          0          0          0          0          0

  Total Imports         3          1          1          2          1          2

  TOTAL Imports         3          1          1          2          1          2

  TOTAL SUPPLY          1032645    1032643    1038218    1038217    1047903    1047329

  Intra EC Exports      0          0          0          0          0          0

  Total Exports         1888       1888       1850       1887       1800       1886

  TOTAL Exports         1888       1888       1850       1887       1800       1886

  Sow Slaughter         0          0          0          0          0          0

  OTHER SLAUGHTER       566840     566840     567466     568003     574693     574033

  Total Slaughter       566840     566840     567466     568003     574693     574033

  Loss                  1000       1000       1000       1000       1000       1000

  Ending Inventories    462917     462915     467902     467327     470410     470410

  TOTAL DISTRIBUTION    1032645    1032643    1038218    1038217    1047903    1047329

  Calendar Yr. Imp.     0          0          0          0          0          0
  from U.S.                                                                    

  Calendar Yr. Exp. to  0          0          0          0          0          0
  U.S.                                                                         
  --------------------- ---------- ---------- ---------- ---------- ---------- ----------

## PSD Pork

  --------------------- ---------- ---------- ---------- ---------- ----------- ----------
  **PSD Table**                                                                 

  **Country**           **China,                                                
                        Peoples                                                 
                        Republic                                                
                        of**                                                    

  **Commodity**         **Meat,                                     (1000 MT    
                        Swine**                                     CWE)(1000   
                                                                    HEAD)       

                        2002       Revised    2003       Estimate   2004        Forecast

                        USDA       Post       USDA       Post       USDA        Post
                        Official   Estimate   Official   Estimate   Official    Estimate
                        \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]     \[New\]

  **Market Year Begin**            01/2002               01/2003                01/2004

  Slaughter (Reference) 566840     566840     567466     568003     574693      574033

  Beginning Stocks      0          0          0          0          0           0

  Production            43266      43266      44100      44600      44938       45938

  Intra EC Imports      0          0          0          0          0           0

  Total Imports         60         145        56         149        70          153

  TOTAL Imports         60         145        56         149        70          153

  TOTAL SUPPLY          43326      43411      44156      44749      45008       46091

  Intra EC Exports      0          0          0          0          0           0

  Total Exports         225        215        300        283        300         367

  TOTAL Exports         225        215        300        283        300         367

  Human Dom.            43101      43196      43856      44466      44708       45724
  Consumption                                                                   

  Other Use, Losses     0          0          0          0          0           0

  TOTAL Dom.            43101      43196      43856      44466      44708       45724
  Consumption                                                                   

  Ending Stocks         0          0          0          0          0           0

  TOTAL DISTRIBUTION    43326      43411      44156      44749      45008       46091

  Calendar Yr. Imp.     9          108        27         78         35          81
  from U.S.                                                                     

  Calendar Yr. Exp. to  0          0          0          0          0           0
  U.S.                                                                          
  --------------------- ---------- ---------- ---------- ---------- ----------- ----------

##  Pork Import and Export Tables

  ------------- ------------- ------------ -------------------------- ------------- -----------
  ** **         ** **         ** **        **World Trade Atlas**      ** **         ** **

                                           **Product Group**                        

                                           **China, Fresh, Chilled                  
                                           and Frozen Pork**                        

                                           **Quantity**                             

                                           **January - December**                   

  **Imports**                                                                       **%
                                                                                    Change**

  **Rank**      **Country**   **- KG -     **- KG - 2002**            **- KG -      **03/02**
                              2001**                                  2003**        

  0             \--World\--   94,249,775   144,904,773                149,055,576   2.86

  1             United States 39,558,456   108,214,261                77,638,979    -28.25

  2             Denmark       17,706,792   1,443,695                  37,501,998    2497.64

  3             Canada        22,207,286   35,001,901                 33,896,830    -3.16

  Source of                                                                         
  Data: China                                                                       
  Customs                                                                           
  ------------- ------------- ------------ -------------------------- ------------- -----------

+------+--------------+-----------+------------+-----------+--------+
| *    | ** **        | ** **     |            |           | ** **  |
| * ** |              |           |            |           |        |
|      |              | **World   |            |           |        |
|      |              | Trade     |            |           |        |
|      |              | Atlas**   |            |           |        |
|      |              |           |            |           |        |
|      |              | ** **     |            |           |        |
|      |              |           |            |           |        |
|      |              | **Product |            |           |        |
|      |              | Group**   |            |           |        |
|      |              |           |            |           |        |
|      |              | **China,  |            |           |        |
|      |              | Fresh,    |            |           |        |
|      |              | Chilled   |            |           |        |
|      |              | and       |            |           |        |
|      |              | Frozen    |            |           |        |
|      |              | Pork**    |            |           |        |
|      |              |           |            |           |        |
|      |              | **Q       |            |           |        |
|      |              | uantity** |            |           |        |
|      |              |           |            |           |        |
|      |              | **        |            |           |        |
|      |              | January - |            |           |        |
|      |              | D         |            |           |        |
|      |              | ecember** |            |           |        |
+------+--------------+-----------+------------+-----------+--------+
|      |              |           |            |           |        |
+------+--------------+-----------+------------+-----------+--------+
|      |              |           |            |           |        |
+------+--------------+-----------+------------+-----------+--------+
|      |              |           |            |           |        |
+------+--------------+-----------+------------+-----------+--------+
|      |              |           |            |           |        |
+------+--------------+-----------+------------+-----------+--------+
| **E  |              |           |            |           | **%    |
| xpor |              |           |            |           | Ch     |
| ts** |              |           |            |           | ange** |
+------+--------------+-----------+------------+-----------+--------+
| **Ra | **Country**  | **- KG -  | **- KG -   | **- KG -  | **0    |
| nk** |              | 2001**    | 2002**     | 2003**    | 3/02** |
+------+--------------+-----------+------------+-----------+--------+
| 0    | \--World\--  | 10        | 1          | 21        | 31.91  |
|      |              | 3,209,393 | 61,946,660 | 3,617,005 |        |
+------+--------------+-----------+------------+-----------+--------+
| 1    | Hong Kong    | 5         | 60,654,043 | 7         | 24.39  |
|      |              | 1,066,577 |            | 5,449,881 |        |
+------+--------------+-----------+------------+-----------+--------+
| 2    | Russia       | 2         | 75,586,853 | 7         | -6.19  |
|      |              | 6,480,817 |            | 0,909,385 |        |
+------+--------------+-----------+------------+-----------+--------+
| 3    | Korea, North | 5,075,590 | 9,010,106  | 4         | 420.34 |
|      |              |           |            | 6,883,127 |        |
+------+--------------+-----------+------------+-----------+--------+
| 4    | Singapore    | 1         | 8,728,617  | 8,279,253 | -5.15  |
|      |              | 1,276,461 |            |           |        |
+------+--------------+-----------+------------+-----------+--------+
| 5    | Macau        | 2,097,543 | 2,481,451  | 3,282,833 | 32.29  |
+------+--------------+-----------+------------+-----------+--------+
| 6    | Moldova      | 63,500    | \-         | 2,450,500 | 0      |
+------+--------------+-----------+------------+-----------+--------+
| 7    | Albania      | 1,479,545 | 1,832,000  | 2,266,058 | 23.69  |
+------+--------------+-----------+------------+-----------+--------+
| 8    | Korea, South | \-        | 25,005     | 985,000   | 3      |
|      |              |           |            |           | 839.21 |
+------+--------------+-----------+------------+-----------+--------+
| So   |              |           |            |           |        |
| urce |              |           |            |           |        |
| of   |              |           |            |           |        |
| D    |              |           |            |           |        |
| ata: |              |           |            |           |        |
| C    |              |           |            |           |        |
| hina |              |           |            |           |        |
| Cus  |              |           |            |           |        |
| toms |              |           |            |           |        |
+------+--------------+-----------+------------+-----------+--------+

  ------------- ---------------- ----------- ------------------ ----------- -----------
  ** **         ** **            ** **       **World Trade      ** **       ** **
                                             Atlas**                        

                                             **Product Group**              

                                             **China, Processed             
                                             Pork**                         

                                             **Quantity**                   

                                             **January -                    
                                             December**                     

  **Exports**                                                               **%
                                                                            Change**

  **Rank**      **Country**      **- KG -    **- KG - 2002**    **- KG -    **03/02**
                                 2001**                         2003**      

  0             \--World\--      3,057,988   3,715,775          3,534,730   -4.87

  1             Hong Kong        2,591,757   3,162,686          2,861,967   -9.51

  2             Japan            109,828     172,600            219,989     27.46

  3             Singapore        176,390     138,131            145,700     5.48

  4             Myanmar          5,125       78,266             126,140     61.17

  5             Macau            93,935      97,153             89,549      -7.83

  6             Malaysia         49,500      52,499             72,256      37.63

  Source of                                                                 
  Data: China                                                               
  Customs                                                                   
  ------------- ---------------- ----------- ------------------ ----------- -----------

##  Pork Tariffs

  --------------- ----------- ---------- ---------- ---------- ------------
  Tariffs on Pork                                              
  Offal Effective                                              
  January 1, 2004                                              

                                                               Effective

                              General    MFN        V.A.T.     Rate

                                                               (mfn+vat)

                                                               

  Pork Offal      0206.3000   70%        20.0%      13%        35.6%

                  0206.4100   70%        20.0%      13%        35.6%

                  0206.4900   70%        12.0%      13%        26.6%

  Source: China                                                
  Customs                                                      
  --------------- ----------- ---------- ---------- ---------- ------------

  ------------------------------- ----------- --------- ------- -------- -----------
  Tariffs on Hogs and Pork,                                              
  Effective January 1, 2004                                              

                                                                         Effective

                                              General   MFN     V.A.T.   Rate

                                                                         (mfn+vat)

  Swine, Breeding                 0103.1000   0%        0%      13%      13.0%

  Swine, Other                    0103.9110   50%       10%     13%      24.3%

                                  0103.9120                              

                                  0103.9200                              

  Pork, Fresh or Chilled                                                 

  Sucking pig                     0203.1110   70%       20%     13%      35.6%

  Other                           0203.1190                              

  Hams, shoulders and cuts        0203.1200                              
  thereof, with bones                                                    

  Other                           0203.1900                              

  Pork, Frozen                                                           

  Sucking pig                     0203.2110   70%       12.0%   13%      26.6%

  Other                           0203.2190                              

  Hams, shoulders and cuts        0203.2200                              
  thereof, with bones                                                    

                                  0203.2900                              

  Source: China Customs                                                  
  ------------------------------- ----------- --------- ------- -------- -----------