Voluntary Report - public distribution

**Date:** 3/15/2007

**GAIN Report Number:** CH7801

CH7801

**China, Peoples Republic of**

**Product Brief**

**Shanghai Beer Brief 2007**

**2007**

**Approved by:**

![](media/image1.wmf)Wayne A. Batwin

ATO Shanghai

**Prepared by:**

Sonny Chu

**Report Highlights:**

China is already the largest country in terms of beer production and
consumption, and it still possesses tremendous growth potential due to
the low per capita consumption. In recent years, China\'s beer market
has undergone much consolidation; mergers and joint-ventures were
established by either domestic breweries of foreign brewing companies in
an effort to acquire greater market share in this very fragmented market
place. In 2006, two-thirds of total beer sales volume in China was
off-trade sales; however, that volume represented only 55 percent of the
entire market in terms of sales value. In 2006, China imported 114.6
million liters of beer with a sales value of \$US920 million. Most sales
of imported beer are on-trade transactions. Currently, because China\'s
transportation infrastructure is not as well-developed as in Western
nations, beer distribution remains regional.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Shanghai ATO \[CH2\]

\[CH\]

Table of Contents

[**The China Beer Market 2**](#the-china-beer-market)

> [Introduction 2](#introduction)
>
> [Market Segmentation 2](#market-segmentation)
>
> [**Economy 2**](#economy)
>
> [**Standard 2**](#standard)
>
> [**Premium 2**](#premium)

[Import vs. Locally Brewed 2](#import-vs.-locally-brewed)

[Import Consumption 2](#import-consumption)

[Shanghai Region 2](#shanghai-region)

[Consumer Taste 2](#consumer-taste)

[Entering A New Market 2](#entering-a-new-market)

[Regulation & Tariffs 2](#regulation-tariffs)

[Useful Contact Information 2](#useful-contact-information)

[Appendix A: 2](#appendix-a)

[Appendix B: 2](#appendix-b)

# The China Beer Market

# Introduction

![](media/image2.jpeg){width="2.375in" height="1.676388888888889in"}

Like China's overall economy, its beer market is experiencing steady
growth. It is the largest country in terms of beer production and
consumption. In 2006, 31 billion liters of beer were produced in China,
which is in line with the average annual growth rate of 7 percent over
the last ten years. Sales value reached 188.6 billion RMB, which
converts to \$24.2 billion (calculated based on 1 USD = 7.8 RMB). Such a
growth rate has led China to surpass the United States in becoming the
number one beer-producing nation since 2002. This growth has attracted
many foreign brewing companies to China. As a result, its beer market is
undergoing much consolidation by both foreign players as well as
domestic firms. China's total beer consumption also ranks among the
highest in the world, mainly due to the fact that it has the largest
population in the world, estimated at 1.3 billion. The annual per capita
beer consumption is estimated at 27.4 liters (Euromonitor). Compared
with 130 liters in Germany, 80 liters in the United States, and 41
liters in Japan, China's per capita beer consumption remains relatively
low. Because of the large population and low per capita consumption,
China's beer market still has considerable growth potential.

Another factor that contributes to the growth of the beer industry is
certainly the tremendous growth of China's economy. From 1995 to 2005,
China has had 9% average annual GDP growth, leading to increases in
disposable income and improvement in living standards for middle class
Chinese. As their disposable income rises, many Chinese can now afford
to purchase standard lager, and even experience imported premium beer.
As this emerging middle class becomes more affluent, their demand for
quality beer will spur continued growth in the beer market.

To capture this growth however, producers face a major obstacle in
securing distribution. With the market being so fragmented, it is
difficult for any single brewing company to dominate the entire Chinese
market. Local Chinese consumers tend to favor beers from their own
regions, mainly because local beers have long histories with the
locality, but most importantly, because there are not many national
brands to compete with. Also, poor transportation infrastructure makes
it difficult to have an effective national distribution network. In
order to penetrate the market and be able to deliver to as many regions
as possible, brewing companies from overseas have been forming joint
ventures and mergers with Chinese breweries. In doing so, they gain
access to local markets through existing distribution channels, and with
the existing brewing facilities, they can brew and bottle their foreign
brand beers domestically, dramatically reducing costs. Because this is
such an effective way to enter the Chinese market, the beer market has
been going through a major consolidation in recent years.

# Market Segmentation

Before further segmenting China's beer market, two major categories must
be defined in order to avoid misunderstandings. China's beer market can
be separated into two categories: imported and domestic. Imported beers
refer to beers that are brewed overseas and imported into the country.
Examples of imported beers include Guinness, New Castle, and Corona.
Domestic beers include all beers that are being brewed within China,
regardless of the origin of the brand. Aside from the countless numbers
of regional Chinese beers, there are a number of foreign brands that are
domestically brewed. Budweiser, Carlsberg, and Asahi are good examples
among other major domestic foreign-brand beers. Besides being
categorized as imported or domestic, China's beer market can also be
broken down into three segments according to price level.

## Economy

The economy segment of the beer market comprised 90 percent of total
sales volume of the entire China beer market in 2006, which translates
to 28.2 billion liters. It also accounted for 75 percent of sales value
in the same year, which equates to roughly \$18 billion (Euromonitor).
The economy beer segment is dominated by regional players throughout
China. There are no imported economy beers, not only because all
overseas beers are automatically labeled as premium beer, but also
because the sales price of economy lager is so low that it would be
unreasonable to import them and sell within this price range. The retail
price for economy beer is roughly 7 RMB per liter. At the retail level,
a 640 ml bottle has an average cost of 2.50 RMB. As China continues to
grow, the beer market as a whole will become more competitive. The
profit margin of economy lagers is already minimal and it will be
squeezed even further. It is expected that this segment of the market
will lose share to standard and premium beers as China continues to
urbanize and the beer market as a whole continues to consolidate.

## Standard

The standard beer segment has a market share of 7 percent in total sales
volume as of the end of 2006, which also represents 12 percent of the
total sales value. Similar to the economy segment, no imported beers
will be priced at this segment because of its low pricing
characteristic, which disable foreign beer firms to cover costs and earn
a reasonable return. Prices of domestic standard lagers range from 7-20
RMB per liter. The reason for such a wide range of prices is because
this range also suits some foreign brand beers that are being brewed
domestically such as Budweiser and Carlsberg, and they are able to
command higher prices compared to other regional competitors. Unlike the
economy lagers, the standard segment is estimated to grow at a compound
annual rate of 6 percent as the emerging middle class becomes more
willing to substitute economy lager with higher quality beer.

## Premium

![](media/image3.wmf){width="4.125196850393701in" height="2.5in"}

The premium beer market has the least market share in terms of volume.
In 2006, sales volume was estimated at 701.8 million liters, which is 3
percent of the entire beer market in China. Nevertheless, this 3 percent
represents \$3.14 billion in sales value, which is 13 percent overall.
This high level of representation is because the price of premium beer
in China is at least 20 RMB per liter. Additionally, within this premium
beer market, there are two sub-segments. One type of premium beer is
brewed domestically; the other type is actually imported into the
country. Interestingly, most domestically produced premium beers are of
foreign brands, such as Bud Ice, Budweiser Gold, and Heineken. An
exception is Tsingtao, which has a high enough international reputation
to establish its own line of premium beer. In 2006, the sales volume
ratio of domestic premium lager to total premium lager was estimated at
84 percent; by sales value, domestic premium is 71 of the entire premium
market.

# Import vs. Locally Brewed

![](media/image4.wmf){width="3.6251968503937007in"
height="2.544488188976378in"}Foreign beer companies, when they have
decided to enter the Chinese market, have two options on how to carry
out their operations in China; one is to import beers into the country;
another option is to brew them domestically. Many multinational
companies have the equity to acquire numerous local players in different
regions of China, hoping to capture more market share. By merging with
local breweries, overseas companies can bring technological know-how and
experience to local firms. In return, local breweries have the
experience to help foreign partners meet any government regulations in
order to establish a presence in their respective regions through
existing distribution channels. An example of a foreign brand beer being
brewed in China is Budweiser. It is one of the first foreign beers that
penetrated the China market. Initially it started out as an import beer
but as demand rose, Budweiser began to create joint ventures with local
breweries and produce their beer domestically. Because of its early
market entry and economies of scale, Budweiser is able to charge a more
affordable price and still maintain a premium image. Currently, its
share in the entire premium beer segment is estimated at 48 percent
(Euromonitor), which overwhelmingly exceeds Tsingtao in second place
with a 12 percent market share.

Another option for foreign companies to enter the Chinese market is
through direct imports. Compared to a foreign beer that is brewed
locally, production costs for overseas brewers are generally higher than
if the beer were brewed in China, so imported beers carry a higher price
tag than foreign beers brewed domestically. Additionally, transportation
costs and import tariffs also need to be accounted for, pushing the
final retail price even higher. In China, a good distribution channel
that can support the high price of imported premium beers is
distributing through food service venues. On-trade establishments
provide stable outlets for imported beer sales and act as protective
harbors for overseas brewing companies because pubs and bars often serve
only a limited number of beer brands.

Regardless of the route imported brands used to enter the premium beer
market, because of high profit margins, the market is becoming more
competitive.

# Import Consumption

![](media/image5.wmf){width="2.886220472440945in"
height="2.2818897637795277in"}

When foreign brand beers enter the China market, they would be
automatically perceived as premium beers in the eyes of the Chinese
consumers. Even though the imported beer sales volume represents roughly
just 0.5 percent of the entire beer market, it is a growing niche market
as disposable income in China rises and the Chinese people become more
affluent. As mentioned earlier, most sales of imported beer often occur
at bars and restaurants that appeal to expatriates and the more affluent
Chinese generation. In 2006, China imported 114.6 million liters of
beer, of which 84 percent were sold on-trade. Total sales value of
imported beer reached \$920 million USD; 92 percent were on-premise
sales. Compared to retail sales at hypermarkets and supermarkets,
selling import beers in restaurants and bars yields greater profit for
both the overseas breweries and the establishment because the price of a
glass of beer can be several times higher in a pub than a bottle of the
same beer sold in a supermarket. For example, a glass of Guinness stout
at an Irish pub can sell for 60 RMB, while a 12 FL ounce bottle only
sells for 12 RMB in retail stores, a five-fold difference. Most sales of
these imported premium beers are generated at restaurants, bars, and
high-end retailers that provide service to foreign expatriates. In
cities where there is a stable population of expatriates--such as
Beijing and Shanghai-on-trade sales of imported beers is strongest at
bars and clubs. Popular bars and pubs often feature imported beers from
Europe, particularly from England and Ireland. They often target
expatriates who favor darker beer. And with a generally excellent
reputation overseas, imported brands can often gather a consistent loyal
expatriate consumer base through these bars and pubs, along with the
local Chinese who are willing to try them.

# Shanghai Region 

As the financial and business capital of China, Shanghai is one of the
fastest growing cities in China. With a population estimated at around
18 million (including long-term residents), Shanghai's GDP reached \$127
billion dollars in 2006. Per capita GDP in 2006 was \$7131,
significantly higher than the national average of \$1,700. This provides
a suitable environment for the growth of foreign beer. According to the
yearbook, total sales volume of beer reached 135,900 tons in 2005, which
includes 98,100 tons in wholesale trade and 37,800 tons in retail trade.
Like the rest of China, much of the sales volume is from economy and
standard lagers. The dominant regional brand is Suntory. Other
competitors include Reeb, Snow, Yanjing, Tsingtao, Asahi, Kirin, and
Budweiser.

+----+--------+--------+--------+---------+------+-----+----+------+
|    |        | ##     |        |         |      |     |    |      |
|    |        |  China |        |         |      |     |    |      |
|    |        |  Total |        |         |      |     |    |      |
|    |        |  Beer  |        |         |      |     |    |      |
|    |        | Import |        |         |      |     |    |      |
+----+--------+--------+--------+---------+------+-----+----+------+
|    | ** **  | **     |        |         | *    | **% | *  | **%  |
|    |        | United |        |         | * ** | S   | *  | Chan |
|    |        | States |        |         |      | har | ** | ge** |
|    |        | D      |        |         |      | e** |    |      |
|    |        | ollars |        |         |      |     |    |      |
|    |        | (milli |        |         |      |     |    |      |
|    |        | ons)** |        |         |      |     |    |      |
+----+--------+--------+--------+---------+------+-----+----+------+
| Ra | City   | 2004   | 2005   | 2006    | 2004 | 2   | 20 | \-   |
| nk |        |        |        |         |      | 005 | 06 | 0    |
|    |        |        |        |         |      |     |    | 6/05 |
|    |        |        |        |         |      |     |    | -    |
+----+--------+--------+--------+---------+------+-----+----+------+
|    |        |        |        |         |      |     |    |      |
+----+--------+--------+--------+---------+------+-----+----+------+
|    | O      | 33.    | 27.    | 27      | 100  | 100 | 1  | 0.79 |
|    | verall | 472323 | 014625 | .229006 |      |     | 00 |      |
+----+--------+--------+--------+---------+------+-----+----+------+
| 1  | **Shan | 7.     | 7.     | 7       | 2    | 2   | 2  | 3.04 |
|    | ghai** | 987416 | 104122 | .320421 | 3.86 | 6.3 | 6. |      |
|    |        |        |        |         |      |     | 89 |      |
+----+--------+--------+--------+---------+------+-----+----+------+
| 2  | T      | 7.     | 6.     | 6       | 2    | 23  | 2  | 1.06 |
|    | ianjin | 762935 | 339812 | .407028 | 3.19 | .47 | 3. |      |
|    |        |        |        |         |      |     | 53 |      |
+----+--------+--------+--------+---------+------+-----+----+------+
| 3  | Sh     | 8.     | 4.     | 5       | 26.2 | 17  | 2  | 2    |
|    | enzhen | 768154 | 818651 | .879312 |      | .84 | 1. | 2.01 |
|    |        |        |        |         |      |     | 59 |      |
+----+--------+--------+--------+---------+------+-----+----+------+
| 4  | B      | 2.     | 3.     | 4       | 7.6  | 1   | 1  | 1    |
|    | eijing | 544713 | 539844 | .239804 |      | 3.1 | 5. | 9.77 |
|    |        |        |        |         |      |     | 57 |      |
+----+--------+--------+--------+---------+------+-----+----+------+
| 5  | Dalian | 1.     | 2.     | 1       | 5.18 | 8   | 3. | -5   |
|    |        | 734721 | 169277 | .015861 |      | .03 | 73 | 3.17 |
+----+--------+--------+--------+---------+------+-----+----+------+
| S  |        |        |        |         |      |     |    |      |
| ou |        |        |        |         |      |     |    |      |
| rc |        |        |        |         |      |     |    |      |
| e: |        |        |        |         |      |     |    |      |
| C  |        |        |        |         |      |     |    |      |
| hi |        |        |        |         |      |     |    |      |
| na |        |        |        |         |      |     |    |      |
| Cu |        |        |        |         |      |     |    |      |
| st |        |        |        |         |      |     |    |      |
| om |        |        |        |         |      |     |    |      |
| s, |        |        |        |         |      |     |    |      |
| W  |        |        |        |         |      |     |    |      |
| or |        |        |        |         |      |     |    |      |
| ld |        |        |        |         |      |     |    |      |
| T  |        |        |        |         |      |     |    |      |
| ra |        |        |        |         |      |     |    |      |
| de |        |        |        |         |      |     |    |      |
| A  |        |        |        |         |      |     |    |      |
| tl |        |        |        |         |      |     |    |      |
| as |        |        |        |         |      |     |    |      |
+----+--------+--------+--------+---------+------+-----+----+------+

Ever since 2000, China's total beer imports have been declining. In
2000, China's beer imports totaled \$92 million dollars; three years
later in 2003, this amount fell to \$50.1 million dollars. By the end of
2006, China's beer imports were estimated at slightly more than \$27
million dollars. There are several factors that might contribute to such
a decline. After foreign brewing companies successfully entered the
China market, they eventually started to brew their products
domestically. Another factor might be that over time, some firms
realized that China's minimal demand for foreign beer was not sufficient
to sustain their business, forcing them to withdraw from the market.
Also, strong competition exists among the different types of imported
foreign alcohol because for example, consumers at a nightclub might
consider drinking whiskey or vodka over a bottle of imported beer.
According to retail experts, sales of imported spirits have increased
significantly due to intensive promotion at nightclubs and karaoke bars.
This also might have dampened Chinese consumers' appetite for imported
beers.

Although China's beer imports have fallen significantly, Shanghai's
imports of beer have remained relatively stable. In 2000, Shanghai's
beer imports totaled \$10.6 million; as of 2006, it was estimated at
\$7.3 million dollars. Despite the similar decline of China's total
import beer markets a whole, Shanghai's market share in the overall
imported beer market has been increasing. The reasons for this might
seem evident. As the business capital of eastern China, Shanghai is home
to a growing population of expatriates, estimated at more than half a
million. Expats are the major source of consumption of imported beer,
and that is the reason why more and more pubs, restaurants, and high-end
retail markets have been established to attract and serve this group of
consumers who are willing to spend; therefore, the imported beer market
in Shanghai is becoming more competitive.

# Consumer Taste

In recent years when the low-carb diet became the latest trend, light
beer became a success in western markets, especially in America due to
its low carbohydrate content. In China, light beers have also been well
received, although not for the same low-carb reason. Most Chinese
consumers prefer light beer for its taste. Light beer generally has a
lower percentage of alcohol; therefore it tastes crisp and is not as
bitter as normal beer. Light beers may also have a lower concentration
of wort in order to decrease the bitterness of the beer. Conventional
beers, for example Tsingtao and Budweiser, have an alcohol percentage
and wort content of 4.0 percent and greater and 10°P, respectively.
Light beers, on the contrary, often rate above 3.0 percent and 8°P,
respectively. Some economy lagers even have alcohol content of just
above 2 percent. Compared to traditional Chinese beers, western lagers
are generally bold in flavor, especially dark beer and stout. They may
not appeal to the mass Chinese market, but their goal is to focus on
niche markets in the common market entry strategy for imported beer in
China.

# Entering A New Market

Since imported beer is automatically labeled as a premium, a suitable
distributor should have a large distribution network that caters to
high-end food services, such as hotels, restaurants, and bars. Since
China's transportation infrastructure is not as developed as in the U.S.
and Europe, ![](media/image6.jpeg){width="2.375in"
height="1.7673611111111112in"}distributors usually only cater to their
localities. This is a key reason why China's beer market is so
fragmented. Consequently, foreign beer companies must identify their
target regional markets and typically find separate distributors for
each market.

As previously mentioned, China's beer market pre-dominantly consists of
economy and standard lagers, most of which are being distributed via
off-trade outlets such as independent corner stores, grocery stores, and
supermarkets. The rest are being distributed through on-trade
establishments such as restaurants, hotels, and bars. According to
statistics gathered by Euromonitor International, in 2006, two-thirds of
total beer volume in China was sold through off-trade outlets; the
remainder was sold on-premise. In terms of sales value, however, 55
percent was from off-premise transactions; 45 percent on-premise.

##### On-trade vs Off-trade Sales of beer: Volume 2006

Off-trade On-trade TOTAL

Volume (million litres) 21,152.2 10,030.0 31,182.2

Value (million RMB) 105,128.3 83,523.1 188,651.4

Source: Trade press (FMCG Report, FMCG Information), company research,
store checks, trade interviews, Euromonitor International estimates

A third of the beer sales represents nearly half of the market value;
this is because selling beer through restaurants and bars can definitely
command a higher price. This is especially true for imported beer
because of its premium status. People like to be seen drinking imported
premium beers at bars because it projects a sophisticated image to
others, and it is a way to show off their status. Therefore, even though
a bottle of Heineken costs 60 RMB, which is probably 600 percent higher
than what it costs at a supermarket, there is still plenty of demand for
it. On the contrary, when Chinese consumers purchase beer at a
supermarket, maybe for a family dinner, they tend to purchase local
economy or standard lagers because there are no perceived additional
benefits of drinking premium beer at home. This might also be the reason
why independent food stores on the streets in general only carry local
beers, and sometimes Budweiser.

##### Off-trade Sales of Beer and Distribution Format: % Volume Analysis 2006

\% Off Trade

Supermarkets/hypermarkets 24.0

Independent food stores 68.5

Convenience stores 7.0

Discounters 0.0

Specialists 0.0

Direct sales 0.0

Others 0.5

Total 100.0

Source: Trade press (FMCG Report, FMCG Information), company research,
store checks, trade interviews, Euromonitor International estimates

Since China is a net beer producing country of mostly economy and
standard lagers, it is reasonable to assume from the above table that
almost all of China's beers being sold off-trade through independent
food stores ("mom-and-pop" shops) are local lagers. Premiums are
generally sold through supermarkets and the growing number of
hypermarkets such as Carrefour, Wal-Mart, and Metro.

# Regulation & Tariffs

This year marks the fifth year anniversary of China joining the World
Trade Organization. When China joined the WTO, the tariff for imported
beer was been eliminated. Nevertheless, once the beer has been imported
into the country, it is currently subjected to a 17 percent Value Added
Tax (VAT). In addition to VAT, a consumption tax is added according to
the manufacturer sales price (MSP) of the beer, as shown below.

  ----------------------------------- -----------------------------------
                                      Consumption Tax

  Beer with msp exceeding RMB         RMB 250/ton
  3,000/ton                           

  Beer with msp less than RMB         RMB 220/ton
  3,000/ton                           

  Unbranded beer                      RMB 250/ton
  ----------------------------------- -----------------------------------

Source: USDA GAIN Report Number**:** CH4620 (South China's Beer and Wine
Market: A Window of Opportunity 2004)

For every imported product entering a Chinese port, China Inspection &
Quarantine (CIQ) has to take test samples from each shipment for health
safety measures. This procedure is no different for imported beer.
Besides testing samples, CIQ also examines the beer label to ensure that
it meets Chinese standards. Each label should include the following
information in Chinese:

> 1\) Brand & Company name
>
> 2\) Ingredients
>
> 3\) Net weight (ml)
>
> 4\) Alcohol content (%)

6\) Wort content (°P)

> 7\) Production Date (yy/mm/dd)

8\) Shelf life / Expiration date

> 9\) Place of production
>
> 10\) Packer / Distributor (name & address)
>
> 11\) Country of Origin

Label requirements in China tend to change very frequently, so it is
recommended that before actually exporting the beer shipment, overseas
breweries should send an example of the label to importers/distributors
in China to have it approved by CIQ before hand. Therefore, not only by
providing promising distribution outlets, a good distributor will assist
foreign brewers by also helping sellers meet government regulations,
such as providing proper labels and the necessary export/import
documents.

# Useful Contact Information

U.S. Agricultural Trade Office, Shanghai

Suite 331, Shanghai Centre

1376 Nanjing West Road

Shanghai, China 200040

Tel: +86 (21) 6279-8622

Fax: +86 (21) 6279-8336

Email: atoshanghai@usda.gov

# Appendix A:

<table style="width:100%;">
<colgroup>
<col style="width: 8%" />
<col style="width: 3%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="15">China Import Statistics</td>
</tr>
<tr class="even">
<td colspan="15"><p>Commodity: 220300, Beer Made From Malt</p>
<p>By Volume</p></td>
</tr>
<tr class="odd">
<td colspan="15">Calendar Year: 2001 - 2006</td>
</tr>
<tr class="even">
<td rowspan="2"><strong>Partner Country</strong></td>
<td rowspan="2"><strong>Unit</strong></td>
<td colspan="6"><strong>Volume</strong></td>
<td colspan="6"><strong>% Share</strong></td>
<td><strong>% Change</strong></td>
</tr>
<tr class="odd">
<td><strong>2001</strong></td>
<td><strong>2002</strong></td>
<td><strong>2003</strong></td>
<td><strong>2004</strong></td>
<td><strong>2005</strong></td>
<td><strong>2006</strong></td>
<td><strong>2001</strong></td>
<td><strong>2002</strong></td>
<td><strong>2003</strong></td>
<td><strong>2004</strong></td>
<td><strong>2005</strong></td>
<td><strong>2006</strong></td>
<td><strong>2006/2005</strong></td>
</tr>
<tr class="even">
<td>World</td>
<td>L</td>
<td>53757363</td>
<td>43585174</td>
<td>43381407</td>
<td>26831939</td>
<td>21126589</td>
<td>21319824</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  0.91</td>
</tr>
<tr class="odd">
<td>Mexico</td>
<td>L</td>
<td>12094318</td>
<td>13139535</td>
<td>12476954</td>
<td>13530734</td>
<td>12717608</td>
<td>10567696</td>
<td>  22.50</td>
<td>  30.15</td>
<td>  28.76</td>
<td>  50.43</td>
<td>  60.20</td>
<td>  49.57</td>
<td>  -16.91</td>
</tr>
<tr class="even">
<td>Germany</td>
<td>L</td>
<td>6715770</td>
<td>19094116</td>
<td>19140481</td>
<td>5966813</td>
<td>2794164</td>
<td>4951429</td>
<td>  12.49</td>
<td>  43.81</td>
<td>  44.12</td>
<td>  22.24</td>
<td>  13.23</td>
<td>  23.22</td>
<td>  77.21</td>
</tr>
<tr class="odd">
<td>Korea South</td>
<td>L</td>
<td>1444032</td>
<td>1912261</td>
<td>1460921</td>
<td>3430239</td>
<td>2479359</td>
<td>2472799</td>
<td>  2.69</td>
<td>  4.39</td>
<td>  3.37</td>
<td>  12.78</td>
<td>  11.74</td>
<td>  11.60</td>
<td>  -0.26</td>
</tr>
<tr class="even">
<td>Malaysia</td>
<td>L</td>
<td>549651</td>
<td>229509</td>
<td>576667</td>
<td>947158</td>
<td>812576</td>
<td>1054237</td>
<td>  1.02</td>
<td>  0.53</td>
<td>  1.33</td>
<td>  3.53</td>
<td>  3.85</td>
<td>  4.94</td>
<td>  29.74</td>
</tr>
<tr class="odd">
<td>Netherlands</td>
<td>L</td>
<td>17794503</td>
<td>5240205</td>
<td>2850963</td>
<td>482136</td>
<td>982913</td>
<td>596120</td>
<td>  33.10</td>
<td>  12.02</td>
<td>  6.57</td>
<td>  1.80</td>
<td>  4.65</td>
<td>  2.80</td>
<td>  -39.35</td>
</tr>
<tr class="even">
<td>Ireland</td>
<td>L</td>
<td>47313</td>
<td>54654</td>
<td>70819</td>
<td>133387</td>
<td>254940</td>
<td>358272</td>
<td>  0.09</td>
<td>  0.13</td>
<td>  0.16</td>
<td>  0.50</td>
<td>  1.21</td>
<td>  1.68</td>
<td>  40.53</td>
</tr>
<tr class="odd">
<td>Russia</td>
<td>L</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>36056</td>
<td>266006</td>
<td>290899</td>
<td>0</td>
<td>0</td>
<td>  0.00</td>
<td>  0.13</td>
<td>  1.26</td>
<td>  1.36</td>
<td>  9.36</td>
</tr>
<tr class="even">
<td>United States</td>
<td>L</td>
<td>146897</td>
<td>94178</td>
<td>24214</td>
<td>23049</td>
<td>73272</td>
<td>265198</td>
<td>  0.27</td>
<td>  0.22</td>
<td>  0.06</td>
<td>  0.09</td>
<td>  0.35</td>
<td>  1.24</td>
<td>  261.94</td>
</tr>
<tr class="odd">
<td>United Kingdom</td>
<td>L</td>
<td>101702</td>
<td>100405</td>
<td>139177</td>
<td>149691</td>
<td>233808</td>
<td>218957</td>
<td>  0.19</td>
<td>  0.23</td>
<td>  0.32</td>
<td>  0.56</td>
<td>  1.11</td>
<td>  1.03</td>
<td>  -6.35</td>
</tr>
<tr class="even">
<td>Belgium</td>
<td>L</td>
<td>42240</td>
<td>64386</td>
<td>104421</td>
<td>139150</td>
<td>182962</td>
<td>202513</td>
<td>  0.08</td>
<td>  0.15</td>
<td>  0.24</td>
<td>  0.52</td>
<td>  0.87</td>
<td>  0.95</td>
<td>  10.69</td>
</tr>
<tr class="odd">
<td>France</td>
<td>L</td>
<td>10793049</td>
<td>16526</td>
<td>14610</td>
<td>10341</td>
<td>109457</td>
<td>76786</td>
<td>20.08</td>
<td>0.04</td>
<td>  0.03</td>
<td>  0.04</td>
<td>  0.52</td>
<td>  0.36</td>
<td>  -29.85</td>
</tr>
<tr class="even">
<td>Japan</td>
<td>L</td>
<td>23960</td>
<td>29435</td>
<td>27984</td>
<td>45859</td>
<td>45540</td>
<td>56348</td>
<td>  0.04</td>
<td>  0.07</td>
<td>  0.06</td>
<td>  0.17</td>
<td>  0.22</td>
<td>  0.26</td>
<td>  23.73</td>
</tr>
<tr class="odd">
<td colspan="15">Source: China Customs, Global Trade Atlas</td>
</tr>
</tbody>
</table>

# Appendix B:

<table style="width:100%;">
<colgroup>
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14">China Import Statistics</td>
</tr>
<tr class="even">
<td colspan="14"><p>Commodity: 220300, Beer Made From Malt</p>
<p>By Value</p></td>
</tr>
<tr class="odd">
<td colspan="14">Calendar Year: 2001 - 2006</td>
</tr>
<tr class="even">
<td rowspan="2"><strong>Partner Country</strong></td>
<td colspan="6"><strong>United States Dollars</strong></td>
<td colspan="6"><strong>% Share</strong></td>
<td><strong>% Change</strong></td>
</tr>
<tr class="odd">
<td><strong>2001</strong></td>
<td><strong>2002</strong></td>
<td><strong>2003</strong></td>
<td><strong>2004</strong></td>
<td><strong>2005</strong></td>
<td><strong>2006</strong></td>
<td><strong>2001</strong></td>
<td><strong>2002</strong></td>
<td><strong>2003</strong></td>
<td><strong>2004</strong></td>
<td><strong>2005</strong></td>
<td><strong>2006</strong></td>
<td><strong>2006/2005</strong></td>
</tr>
<tr class="even">
<td>World</td>
<td>69428007</td>
<td>52461496</td>
<td>50145466</td>
<td>33472323</td>
<td>27014625</td>
<td>27229006</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  100.00</td>
<td>  0.79</td>
</tr>
<tr class="odd">
<td>Mexico</td>
<td>13106699</td>
<td>15512172</td>
<td>15958874</td>
<td>17305544</td>
<td>16407335</td>
<td>13659124</td>
<td>  18.88</td>
<td>  29.57</td>
<td>  31.83</td>
<td>  51.70</td>
<td>  60.74</td>
<td>  50.16</td>
<td>  -16.75</td>
</tr>
<tr class="even">
<td>Germany</td>
<td>9518408</td>
<td>25243935</td>
<td>22284238</td>
<td>7177279</td>
<td>3519129</td>
<td>6411246</td>
<td>  13.71</td>
<td>  48.12</td>
<td>  44.44</td>
<td>  21.44</td>
<td>  13.03</td>
<td>  23.55</td>
<td>  82.18</td>
</tr>
<tr class="odd">
<td>Korea South</td>
<td>940349</td>
<td>1601540</td>
<td>1403881</td>
<td>3515828</td>
<td>2508015</td>
<td>2260417</td>
<td>  1.35</td>
<td>  3.05</td>
<td>  2.80</td>
<td>  10.50</td>
<td>  9.28</td>
<td>  8.30</td>
<td>  -9.87</td>
</tr>
<tr class="even">
<td>Malaysia</td>
<td>23740066</td>
<td>5784068</td>
<td>2921381</td>
<td>701061</td>
<td>1190953</td>
<td>1285190</td>
<td>  34.19</td>
<td>  11.03</td>
<td>  5.83</td>
<td>  2.09</td>
<td>  4.41</td>
<td>  4.72</td>
<td>  11.82</td>
</tr>
<tr class="odd">
<td>Netherlands</td>
<td>752211</td>
<td>427582</td>
<td>1006125</td>
<td>1857067</td>
<td>1149354</td>
<td>831752</td>
<td>  1.08</td>
<td>  0.82</td>
<td>  2.01</td>
<td>  5.55</td>
<td>  4.25</td>
<td>  3.05</td>
<td>  -30.16</td>
</tr>
<tr class="even">
<td>Ireland</td>
<td>148948</td>
<td>169196</td>
<td>217856</td>
<td>420569</td>
<td>585940</td>
<td>662913</td>
<td>  0.21</td>
<td>  0.32</td>
<td>  0.43</td>
<td>  1.26</td>
<td>  2.17</td>
<td>  2.43</td>
<td>  13.14</td>
</tr>
<tr class="odd">
<td>Belgium</td>
<td>29070</td>
<td>79343</td>
<td>188703</td>
<td>303348</td>
<td>439969</td>
<td>508405</td>
<td>  0.04</td>
<td>  0.15</td>
<td>  0.38</td>
<td>  0.91</td>
<td>  1.63</td>
<td>  1.87</td>
<td>  15.55</td>
</tr>
<tr class="even">
<td>United Kingdom</td>
<td>100841</td>
<td>123804</td>
<td>206595</td>
<td>234694</td>
<td>422158</td>
<td>459673</td>
<td>  0.15</td>
<td>  0.24</td>
<td>  0.41</td>
<td>  0.70</td>
<td>  1.56</td>
<td>  1.69</td>
<td>  8.89</td>
</tr>
<tr class="odd">
<td>United States</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>28436</td>
<td>218518</td>
<td>354475</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0.08</td>
<td>0.81</td>
<td>  1.30</td>
<td>  247.94</td>
</tr>
<tr class="even">
<td>Russia</td>
<td>15699286</td>
<td>19630</td>
<td>20639</td>
<td>12716</td>
<td>212665</td>
<td>251710</td>
<td>22.61</td>
<td>0.04</td>
<td>0.04</td>
<td>0.04</td>
<td>0.79</td>
<td>  0.92</td>
<td>  15.19</td>
</tr>
<tr class="odd">
<td>France</td>
<td>273826</td>
<td>67007</td>
<td>45781</td>
<td>28611</td>
<td>101877</td>
<td>160256</td>
<td>  0.39</td>
<td>  0.13</td>
<td>  0.09</td>
<td>  0.09</td>
<td>  0.38</td>
<td>  0.59</td>
<td>  -24.64</td>
</tr>
<tr class="even">
<td>Japan</td>
<td>34519</td>
<td>42959</td>
<td>93010</td>
<td>75719</td>
<td>83842</td>
<td>116067</td>
<td>  0.05</td>
<td>  0.08</td>
<td>  0.19</td>
<td>  0.23</td>
<td>  0.31</td>
<td>  0.43</td>
<td>  38.44</td>
</tr>
<tr class="odd">
<td colspan="14">Source: China Customs, Global Trade Atlas</td>
</tr>
</tbody>
</table>