""

Required Report - public distribution

**Date:** 9/15/2003

**GAIN Report Number:** CH3112

CH3112

**China, Peoples Republic of**

**Livestock and Products**

**Annual**

**2003**

**Approved by:**

![](media/image1.wmf)LaVerne Brabant

U.S. Embassy

**Prepared by:**

Casey E. Bean/Zhang Jianping

**Report Highlights:**

During 2003 the outbreak of SARS in China and detection of BSE in Canada
negatively affected China's meat consumption and trade picture. However,
demand for imported pork and beef is forecast to rebound to pre-SARS
levels for the reminder of 2003 and into 2004. Rising incomes in China
continue to favor growth in beef imports at the expense of domestic pork
production and consumption. Import fraud problems prompted China to work
with USDA to develop more effective certification and labeling
procedures. During 2003 the Chinese Government announced a new strategic
plan to bolster cattle production.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Beef and Cattle 4](#beef-and-cattle)

[In Response to sluggish growth in China's cattle and beef sector,
Government Announces Nationwide "Beef Advantageous Development Area
Program"
4](#in-response-to-sluggish-growth-in-chinas-cattle-and-beef-sector-government-announces-nationwide-beef-advantageous-development-area-program)

[Rising Chinese consumer income leads to increase per capita meat
consumption and demand for higher quality meat in 2004, but meat safety
concerns on the rise
5](#rising-chinese-consumer-income-leads-to-increase-per-capita-meat-consumption-and-demand-for-higher-quality-meat-in-2004-but-meat-safety-concerns-on-the-rise)

[China's growing economy and production constraints keep upwards
pressure on prices
5](#chinas-growing-economy-and-production-constraints-keep-upwards-pressure-on-prices)

[During 2003 SARS outbreak and BSE in Canada shift live cattle and meat
trade patterns, but imports forecast to recover in 2004 with U.S.
products capturing the leading share.
5](#during-2003-sars-outbreak-and-bse-in-canada-shift-live-cattle-and-meat-trade-patterns-but-imports-forecast-to-recover-in-2004-with-u.s.-products-capturing-the-leading-share.)

[Swine and Pork 15](#swine-and-pork)

[Swine production forecast to be flat during 2003 and 2004 due to weak
consumer demand for pork stemming from rising popularity of other meats.
15](#swine-production-forecast-to-be-flat-during-2003-and-2004-due-to-weak-consumer-demand-for-pork-stemming-from-rising-popularity-of-other-meats.)

[Pork consumption has fallen from 80% in 1980s of all meat consumed to a
new low of 62.23% in the first five months of 2003
15](#pork-consumption-has-fallen-from-80-in-1980s-of-all-meat-consumed-to-a-new-low-of-62.23-in-the-first-five-months-of-2003)

[Prices for pork remain lackluster.
15](#prices-for-pork-remain-lackluster.)

[Fraud prevention efforts strengthening in China---USDA/FSIS
certificates should improve sales opportunities for imported U.S. pork
products.
15](#fraud-prevention-efforts-strengthening-in-chinausdafsis-certificates-should-improve-sales-opportunities-for-imported-u.s.-pork-products.)

# Executive Summary

China's beef imports during 2004 are forecast at 30,000 MT, above this
year's level as consumption is expected to remain strong due to a result
of the "SARS rebound". A lower tariff in 2004 will benefit imports as
domestic production lags demand especially high-end muscle meat and beef
cuts. The outbreak of SARS in the spring depressed beef consumption in
the second quarter, but consumption briskly recovered the remainder of
2003. SARS affected beef less than pork and poultry. One possible
explanation is that cattle are believed to eat more natural feed and
have less contact with the disease. Higher international beef prices may
slow the pace of beef imports during 2004.

China\'s total cattle inventory increased slightly in the first quarter
of 2003 over the same period of 2002. However, beef cattle inventories
and beef production are both forecast to remain flat while dairy cattle
production rises because dairy demand is even stronger than beef. Dairy
products are considered one of the best food products to improve health,
and the government has been paying greater attention to dairy
development. This trend will continue into 2004 as the more prosperous
dairy industry absorbs more investment. Strong beef consumption is
driven by demand in the fast food, hot pot, and traditional stir-fry and
newly developed Korean food sectors. Post adjusted dairy cattle
inventory numbers based on official data of the National Statistics
Bureau (NSB). Beef imports do not include offal in the PSD table.

During 2003 China's imports of pork are forecast down at 56,000 MT due
to the effect of the SARS panic on consumption, but recover to 70,000 MT
during 2004. However, import demand remains strong for pork offal and
feet, a significant component of China's frozen pork imports. Pork
production is increasing slowly but steadily as overall pork consumption
is still growing. Pork consumption growth mainly comes from population
growth, and pork consumption is more and more challenged by gaining
popularity of other meats. China is generally self sufficient in pork
production.

China's health officials are strengthening the country's regulatory
environment, as consumer concerns about food health and safety rise,
posing challenges for both domestic producers and key supplying
countries such as Denmark, the United States and Australia. FAS/Beijing
and the U.S. Meat Export Federation are working closely with China's
regulators to ensure China's import requirements remain science-based
and transparent.

# Beef and Cattle

## In Response to sluggish growth in China's cattle and beef sector, Government Announces Nationwide "Beef Advantageous Development Area Program" 

China's total cattle inventory in the first quarter of 2003 was 124.8
million head, 1.4 percent up over the same period of 2002. The slight
increase appears most likely due to dairy cattle numbers increasing
rapidly and not due to draft animal numbers decreasing. Farmers were
apparently compensated for lowering draft numbers. Another factor for
the increase this year was because the Chinese Government resumed state
meat reserves, but the reserve pattern was changed from frozen meat to
mainly live animals. Although the reserve target was small (i.e., only
about one percent of total beef production), the policy change may have
encouraged farmers to increase their cattle inventories. Despite these
efforts by the government, growth of the beef cattle industry is
forecast to remain slow.

Several factors constrain the Chinese cattle and beef industry. First,
genetic improvement lags far behind many other countries. Purely bred
beef cattle herds are very small. Crossbred local draft breeds with
western genetics only reach 30 percent. Investment in cattle genetic
improvement mainly goes to the more profitable dairy sector; therefore
breeding dairy cattle imports always dominate live cattle imports.
Chinese cattle genetics result in much lower carcass weight than the
world level on average after slaughter, thus actually making production
costs higher.

Second, limited arable land in China constrains growth of the cattle
industry. Due to China's burgeoning population and limited arable land,
fertile land is increasingly being converted to cash crop production.
This trend makes feed and fodder production more costly. The lack of
natural grassland is another related concern, partially stemming from
serious over-grazing on natural grassland. The grazing rate on natural
grassland is 130-140 percent on average, and some places even as high as
300 percent. According to a new survey by the Government, overgrazing
combined with small investment and natural disasters have made 90
percent of China's natural grassland deteriorated. To address the
over-grazing problem, the Government recently announced a "Grassland
Law" that will reduce the number of grazing animals.

Cattle farms are still predominately small-scale, and family households
raise 70 to 80 percent of China's cattle. As a result, it is still very
difficult to control major animal diseases. A comprehensive veterinary
system is still lacking to efficiently cover all cattle. Finally,
China's slaughter and processing sector remains under-developed. Most
slaughter and processing plants cannot meet sanitary requirements
domestically or internationally.

In response to these challenges, China's Ministry of Agriculture (MOA)
recently initiated a National strategic "Beef Advantageous Development
Area Program" for 2003-2007. The two areas are China's Central Plain and
the Northeast, the traditional center of China's livestock industry.
These areas will shift their marketing focus to higher quality beef
production in order to gradually substitute imported beef and increase
exports of high-end muscle beef in the future. However, it remains to be
seen how long the program will take and whether Chinese beef can
compete, quality and price-wise, with international high-end beef
products. The other issue is the uncertainly of feed and fodder
supplies. For the foreseeable future, China's beef industry will not
threaten U.S. beef exports to China, but longer-term production
improvements may cut into import growth.

## Rising Chinese consumer income leads to increase per capita meat consumption and demand for higher quality meat in 2004, but meat safety concerns on the rise

Strong beef demand in the first quarter of 2003 was disrupted in the
spring by the sudden outbreak of severe acute respiratory syndrome
(SARS) in China. Consumption fell sharply in April and May, due to the
panic of contracting the disease, as consumers avoided hotels and
restaurants during this period. Fortunately, the SARS crisis was
short-lived in China. With SARS under control by July 2003, WHO lifting
the China travel ban and the government lifting domestic tourism travel,
consumers have resumed dining outside the house. As a result, demand for
beef has rebounded. During the third quarter of 2003 beef demand is
forecast to recover to pre-SARS levels and remain stable through the
rest of the year. Overall, the pace of growth in beef consumption during
2003 is forecast below pre-SARS forecast levels, yet the total quantity
is still above the previous year.

The outlook for 2004 is steady increases in per capita and total beef
consumption due to rising incomes, particularly in urban centers, and
diversification away from traditional meats like pork. As the standard
of living improves, consumers are demanding higher quality beef cuts.
The constraints on China's domestic production and supply will result in
continued increases in imports of higher quality beef during 2004.

Chinese consumers are also becoming more discriminating about food
safety and health issues. In turn, China's health authorities have
increased meat inspections and standards at stores. The traditional wet
markets, where farmers directly sell their products, face increased
pressure as they struggle to meet stiffer safety and inspection
requirements. These conditions favor increased sales of frozen
beef---including competively priced imported products. Other consumption
trends reported in FAS/Beijing's CH2044 GAIN report remain unchanged.

In response to the changing food safety regulatory environment in China,
during 2003 the U.S. Meat Export Federation, with cooperation from
FAS/Beijing, sponsored a series of seminars to strengthen China's
understanding of the U.S. meat safety system and how the industry and
government work cooperatively. Participants in China included officials
from the Ministry of Health, AQSIQ and the meat trade. USDA's Cochran
Program also plays a major role in fostering technical exchanges between
China's quarantine officials and their counterparts in the United
States.

## China's growing economy and production constraints keep upwards pressure on prices

With meat consumption steadily growing coupled with production
constraints, beef prices are expected to rise during 2003 and 2004. The
Ministry of Agriculture reports that although China's beef prices on
average in June 2003 rose only slightly against March, prices rose by 8
percent over the same period in 2002. Strong demand with a continued
economy growth and production constraints will keep beef prices high for
the rest of the year and during 2004.

## During 2003 SARS outbreak and BSE in Canada shift live cattle and meat trade patterns, but imports forecast to recover in 2004 with U.S. products capturing the leading share.

In recent years, China's beef market is typified by growing levels of
imported product filling the shortfall in domestic production as overall
meat consumption rises. During 2003 the outbreak of SARS, and the
resulting decline in restaurant consumption, is forecast to slow this
pace of import growth. According to trade contacts, beef imports were
interrupted during the SARS period due to transportation problems and
delays in issuing China's Import Quarantine Certificate. Fortunately,
the SARS situation was short-lived. As a result, beef imports in 2003
are still forecast above last year's level. Strong demand for the rest
of the year and into 2004, coupled with further import tariff
reductions, are forecast to sustain beef imports at or above this year's
level. Only much higher beef prices and an unpredicted food safety issue
could dampen this forecast.

The detection of BSE in Canada has not directly affected U.S. beef
exports to China, and China's imports of Canadian beef are
insignificant. However, some traders report Canada's BSE situation could
become a problem if China's quarantine authorities, AQSIQ, impose
additional export certification requirements on how the U.S. has treated
cattle imports from Canada and what measures the U.S. has taken to
prevent BSE. In particular, according to trade contacts, China may
impose additional import measures if other Asian countries take the
lead. FAS/Beijing and the U.S. Meat Export Federation continue working
with AQSIQ to strengthen their understanding of the science-based risk
assessment, monitoring and testing being done on cattle in the United
States to ensure the highest quality of exported U.S. meat products.

In part due to the detection of BSE in Canada, this year China and
Australia signed a protocol allowing more types of Australian meat to
enter China. Canada was China's second largest supplier of live cattle
in 2002, and China promptly switched to other suppliers such as the
United States and Australia. Trade contacts also report Australia's meat
industry may focus trade promotion efforts on high-end chilled beef for
supermarkets or restaurants. This business would not directly compete
with the segment of the market utilizing U.S. exported frozen beef
products. However, if prices of Australian beef products remain
competitive and much of the imported beef is used in restaurants,
Australia's efforts could hurt exports of U.S. high-end muscle meat to
China.

During 2003 China's imports of dairy cattle are increasing sharply due
to China's investment in the dairy sector and herd improvements. China's
imports of breeding cattle were 11,432 head during 2002, more than
quadrupling the previous year. Imports in the first two quarters of 2003
are already 58 percent higher that total imports from last year.
Continued strong demand, constrained domestic supplies, and a zero
tariff for breeding animals will result in continued increases in live
cattle imports in 2003 and 2004. While Australian suppliers dominate
China's import picture, U.S. suppliers are slightly gaining due to
higher quality, according to traded sources. The BSE problem in Canada
also provides an opportunity for the United States to increase exports.

This year China's imports of muscle meat have outpaced growth for offal.
According to U.S. trade statistics (e.g., combination of exports to the
mainland and Hong Kong with most re-exported to the mainland), muscle
beef exports exceeded the volume of offal exports. The gradual
transition from higher quality meat reflects China's growing economy,
higher incomes and a more discriminating consumer. With domestic
supplies unable to meet demand and further tariff reductions in 2004,
this trend will further continue this year and the next.

The United States is the largest supplier for both beef meat and offal.
However, the Chinese data inflate U.S. offal exports because large
volumes of offal enter China represented as U.S. products to avoid
quarantine restrictions placed on European and South American countries
(please refer to FAS/Beijing's report, CH2044). Although traders can
choose direct shipments or use Hong Kong middlemen (i.e., transportation
companies) to import, direct shipments are gaining. Traders explain that
middlemen provide a package price for delivery, and a large portion of
the traders' profit is reduced by the so-called transportation cost.
Further, according to traders, it is easier to obtain Import Quarantine
Permits for direct shipments.

Despite China's admission to the WTO and phased-in reductions in import
tariffs, the country still maintains 30 to 46% tariff rates (MFN + VAT)
on selected meat cuts (see table in this report). These high tariffs
increase the cost of imported meat products and raise food costs for
consumers in China.

Turning to China's beef export picture, the country's exports are
expected to decline in 2003 and beyond because demand in Hong Kong, the
main export market, has been shrinking. EU countries appear likely to
continue banning most Chinese meat products due to health concerns.
Additionally, it is still uncertain how long the "SARS effect" will
continue to impact other country's shaken confidence in Chinese
products.

+--------------------+-------+-------+-------+-------+-------+-------+
| **PSD Table**      |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| **Country**        | ###   |       |       |       |       |       |
|                    | ### C |       |       |       |       |       |
|                    | hina, |       |       |       |       |       |
|                    |  Peop |       |       |       |       |       |
|                    | les R |       |       |       |       |       |
|                    | epubl |       |       |       |       |       |
|                    | ic of |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**      | ####  |       |       |       | (1000 |       |
|                    | ## An |       |       |       | HEAD) |       |
|                    | imal  |       |       |       |       |       |
|                    | Numbe |       |       |       |       |       |
|                    | rs, C |       |       |       |       |       |
|                    | attle |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
|                    | 2002  | Re    | 2003  | Est   | 2004  | For   |
|                    |       | vised |       | imate |       | ecast |
+--------------------+-------+-------+-------+-------+-------+-------+
|                    | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                    | Off   | Est   | Off   | Est   | Off   | Est   |
|                    | icial | imate | icial | imate | icial | imate |
|                    | \[    | \[    | \[    | \[    | \[    | \[    |
|                    | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+--------------------+-------+-------+-------+-------+-------+-------+
| **Market Year      |       | 01    |       | 01    |       | 01    |
| Begin**            |       | /2002 |       | /2003 |       | /2004 |
+--------------------+-------+-------+-------+-------+-------+-------+
| Total Cattle Beg.  | 1     | 1     | 1     | 1     | 1     | 1     |
| Stks               | 28242 | 28242 | 27504 | 30848 | 26616 | 33023 |
+--------------------+-------+-------+-------+-------+-------+-------+
| Dairy Cows Beg.    | 10255 | 5662  | 12000 | 6870  | 0     | 8300  |
| Stocks             |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Beef Cows Beg.     | 57000 | 58258 | 55000 | 57193 | 0     | 56000 |
| Stocks             |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Production (Calf   | 41805 | 47164 | 42550 | 48000 | 0     | 48860 |
| Crop)              |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Intra EC Imports   | 0     | 0     | 0     | 0     | 0     | 0     |
+--------------------+-------+-------+-------+-------+-------+-------+
| Other Imports      | 7     | 11    | 7     | 25    | 0     | 30    |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports      | 7     | 11    | 7     | 25    | 0     | 30    |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY       | 1     | 1     | 1     | 1     | 1     | 1     |
|                    | 70054 | 75417 | 70061 | 78873 | 26616 | 81913 |
+--------------------+-------+-------+-------+-------+-------+-------+
| Intra EC Exports   | 0     | 0     | 0     | 0     | 0     | 0     |
+--------------------+-------+-------+-------+-------+-------+-------+
| Other Exports      | 50    | 58    | 45    | 50    | 0     | 48    |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Exports      | 50    | 58    | 45    | 50    | 0     | 48    |
+--------------------+-------+-------+-------+-------+-------+-------+
| Cow Slaughter      | 0     | 0     | 0     | 0     | 0     | 0     |
+--------------------+-------+-------+-------+-------+-------+-------+
| Calf Slaughter     | 0     | 0     | 0     | 0     | 0     | 0     |
+--------------------+-------+-------+-------+-------+-------+-------+
| Other Slaughter    | 42000 | 44011 | 43000 | 45000 | 0     | 45900 |
+--------------------+-------+-------+-------+-------+-------+-------+
| Total Slaughter    | 42000 | 44011 | 43000 | 45000 | 0     | 45900 |
+--------------------+-------+-------+-------+-------+-------+-------+
| Loss               | 500   | 500   | 400   | 800   | 0     | 800   |
+--------------------+-------+-------+-------+-------+-------+-------+
| Ending Inventories | 1     | 1     | 1     | 1     | 0     | 1     |
|                    | 27504 | 30848 | 26616 | 33023 |       | 35165 |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION | 1     | 1     | 1     | 1     | 0     | 1     |
|                    | 70054 | 75417 | 70061 | 78873 |       | 81913 |
+--------------------+-------+-------+-------+-------+-------+-------+
| Calendar Yr. Imp.  | 0     | 0     | 0     | 2     | 0     | 4     |
| from U.S.          |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Calendar Yr. Exp.  | 0     | 0     | 0     | 0     | 0     | 0     |
| to U.S.            |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+

  --------------------- ---------- ---------- ---------- ---------- ----------- ----------
  **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) 42000      44011      43000      45000      0           45900

  Beginning Stocks      0          0          0          0          0           0

  Production            5600       5846       5700       6020       0           6260

  Intra EC Imports      0          0          0          0          0           0

  Other Imports         26         26         30         27         0           30

  TOTAL Imports         26         26         30         27         0           30

  TOTAL SUPPLY          5626       5872       5730       6047       0           6290

  Intra EC Exports      0          0          0          0          0           0

  Other Exports         40         45         40         40         0           38

  TOTAL Exports         40         45         40         40         0           38

  Human Dom.            5586       5827       5690       6007       0           6252
  Consumption                                                                   

  Other Use, Losses     0          0          0          0          0           0

  TOTAL Dom.            5586       5827       5690       6007       0           6252
  Consumption                                                                   

  Ending Stocks         0          0          0          0          0           0

  TOTAL DISTRIBUTION    5626       5872       5730       6047       0           6290

  Calendar Yr. Imp.     6          18         10         19         0           21
  from U.S.                                                                     

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

+---------------+----------+---------+----------+----------+---------+
| China\'s Live |          |         |          |          |         |
| Cattle        |          |         |          |          |         |
| Imports by    |          |         |          |          |         |
| Origin (China |          |         |          |          |         |
| Data)         |          |         |          |          |         |
|               |          |         |          |          |         |
| (Number of    |          |         |          |          |         |
| Head)         |          |         |          |          |         |
+---------------+----------+---------+----------+----------+---------+
|               |          |         |          |          |         |
+---------------+----------+---------+----------+----------+---------+
| ORIGIN        | 2001     | 2002    | 2002     | 2003     | 2002/03 |
+---------------+----------+---------+----------+----------+---------+
|               | Jan-Dec  | Jan-Dec | Jan-Jun  | Jan-Jun  | Jan-Jun |
+---------------+----------+---------+----------+----------+---------+
|               |          |         | (Com     | (Com     | \% Chng |
|               |          |         | parison) | parison) |         |
+---------------+----------+---------+----------+----------+---------+
| Australia     | 2,231    | 9,280   | 2,760    | 15,572   | 464.20% |
+---------------+----------+---------+----------+----------+---------+
| New Zealand   | 0        | 0       | 0        | 1,560    | 100.00% |
+---------------+----------+---------+----------+----------+---------+
| United States | 317      | 256     | 116      | 1,022    | 781.03% |
+---------------+----------+---------+----------+----------+---------+
| Canada        | 227      | 1,896   | 0        | 11       | 100.00% |
+---------------+----------+---------+----------+----------+---------+
| Other         | 0        | 0       | 0        | 0        | 0.00%   |
+---------------+----------+---------+----------+----------+---------+
|               |          |         |          |          |         |
+---------------+----------+---------+----------+----------+---------+
| TOTAL         | 2,775    | 11,432  | 2,876    | 18,165   | 531.61% |
+---------------+----------+---------+----------+----------+---------+
| Source: China |          |         |          |          |         |
| Customs       |          |         |          |          |         |
|               |          |         |          |          |         |
| ##            |          |         |          |          |         |
| ##### HS Code |          |         |          |          |         |
| s: 0102.1000  |          |         |          |          |         |
| and 0102.9000 |          |         |          |          |         |
+---------------+----------+---------+----------+----------+---------+

+---------------+---------+---------+----------+----------+---------+
| China\'s      |         |         |          |          |         |
| Fresh,        |         |         |          |          |         |
| Chilled and   |         |         |          |          |         |
| Frozen Beef   |         |         |          |          |         |
| Imports by    |         |         |          |          |         |
| Origin (China |         |         |          |          |         |
| Data)         |         |         |          |          |         |
|               |         |         |          |          |         |
| (Metric Tons, |         |         |          |          |         |
| Product       |         |         |          |          |         |
| Weight)       |         |         |          |          |         |
+---------------+---------+---------+----------+----------+---------+
|               |         |         |          |          |         |
+---------------+---------+---------+----------+----------+---------+
| SOURCE        | 2001    | 2002    | 2002     | 2003     | 2002/03 |
+---------------+---------+---------+----------+----------+---------+
|               | Jan-Dec | Jan-Dec | Jan-Jun  | Jan-Jun  | Jan-Jun |
+---------------+---------+---------+----------+----------+---------+
|               |         |         | (Com     | (Com     | \%      |
|               |         |         | parison) | parison) | Change  |
+---------------+---------+---------+----------+----------+---------+
| United States | 1,848   | 8,423   | 3,146    | 3,382    | 7.50%   |
+---------------+---------+---------+----------+----------+---------+
| Australia     | 1,802   | 2,139   | 951      | 1,281    | 34.70%  |
+---------------+---------+---------+----------+----------+---------+
| New Zealand   | 114     | 210     | 134      | 76       | -43.28% |
+---------------+---------+---------+----------+----------+---------+
| Others        | 4       | 246     | 48       | 456      | 850.00% |
+---------------+---------+---------+----------+----------+---------+
|               |         |         |          |          |         |
+---------------+---------+---------+----------+----------+---------+
| TOTAL         | 3,768   | 11,018  | 4,279    | 5,195    | 21.41%  |
+---------------+---------+---------+----------+----------+---------+
| Source: China |         |         |          |          |         |
| Customs       |         |         |          |          |         |
|               |         |         |          |          |         |
| ####          |         |         |          |          |         |
| ### HS Codes: |         |         |          |          |         |
|  0201.1000, 0 |         |         |          |          |         |
| 201.2000, 020 |         |         |          |          |         |
| 1.3000, 2002. |         |         |          |          |         |
| 1000, 2002.20 |         |         |          |          |         |
| 00, 2002.3000 |         |         |          |          |         |
+---------------+---------+---------+----------+----------+---------+

+------------+---------+---------+------------+------------+---------+
| China\'s   |         |         |            |            |         |
| Beef Offal |         |         |            |            |         |
| Imports by |         |         |            |            |         |
| Origin     |         |         |            |            |         |
| (China     |         |         |            |            |         |
| Data)      |         |         |            |            |         |
|            |         |         |            |            |         |
| (Metric    |         |         |            |            |         |
| Tons,      |         |         |            |            |         |
| Product    |         |         |            |            |         |
| Weight)    |         |         |            |            |         |
+------------+---------+---------+------------+------------+---------+
| SOURCE     | 2001    | 2002    | 2002       | 2003       | 2002/03 |
+------------+---------+---------+------------+------------+---------+
|            | Jan-Dec | Jan-Dec | Jan-Jun    | Jan-Jun    | Jan-Jun |
+------------+---------+---------+------------+------------+---------+
|            |         |         | (C         | (C         | \%      |
|            |         |         | omparison) | omparison) | Change  |
+------------+---------+---------+------------+------------+---------+
| United     | 19,528  | 30,272  | 18,585     | 16,029     | -13.75% |
| States     |         |         |            |            |         |
+------------+---------+---------+------------+------------+---------+
| Canada     | 3,252   | 5,596   | 2,715      | 4,981      | 83.46%  |
+------------+---------+---------+------------+------------+---------+
| Australia  | 5,672   | 1,678   | 441        | 921        | 108.84% |
+------------+---------+---------+------------+------------+---------+
| New        | 2,824   | 1,160   | 489        | 683        | 39.67%  |
| Zealand    |         |         |            |            |         |
+------------+---------+---------+------------+------------+---------+
| Others     | 1,092   | 185     | 0          | 78         | 100.00% |
+------------+---------+---------+------------+------------+---------+
|            |         |         |            |            |         |
+------------+---------+---------+------------+------------+---------+
| TOTAL      | 32,368  | 38,891  | 22,230     | 22,692     | 2.08%   |
+------------+---------+---------+------------+------------+---------+
| Source:    |         |         |            |            |         |
| China      |         |         |            |            |         |
| Customs    |         |         |            |            |         |
|            |         |         |            |            |         |
| ###        |         |         |            |            |         |
| #### HS Co |         |         |            |            |         |
| des: 0206. |         |         |            |            |         |
| 1000, 0206 |         |         |            |            |         |
| .2100, 020 |         |         |            |            |         |
| 6.2200 and |         |         |            |            |         |
|  0206.2900 |         |         |            |            |         |
+------------+---------+---------+------------+------------+---------+

+--------------+----------+----------+---------+---------+---------+
| China\'s     |          |          |         |         |         |
| Live Cattle  |          |          |         |         |         |
| Exports by   |          |          |         |         |         |
| Destination  |          |          |         |         |         |
| (China Data) |          |          |         |         |         |
|              |          |          |         |         |         |
| (Number of   |          |          |         |         |         |
| Head)        |          |          |         |         |         |
+--------------+----------+----------+---------+---------+---------+
| DESTINATION  | 2001     | 2002     | 2002    | 2003    | 2002/03 |
+--------------+----------+----------+---------+---------+---------+
|              | Jan-Dec  | Jan-Dec  | Jan-Jun | Jan-Jun | Jan-Jun |
+--------------+----------+----------+---------+---------+---------+
|              |          |          |         |         | \%      |
|              |          |          |         |         | Change  |
+--------------+----------+----------+---------+---------+---------+
| Hong Kong    | 50,674   | 49,163   | 23,591  | 21,310  | -9.67%  |
+--------------+----------+----------+---------+---------+---------+
| Macao        | 5,174    | 5,335    | 2,618   | 2,529   | -3.40%  |
+--------------+----------+----------+---------+---------+---------+
| Korea, DPR   | 1,323    | 17       | 0       | 10      | 100.00% |
+--------------+----------+----------+---------+---------+---------+
| Myanmar      | 0        | 674      | 85      | 0       | -       |
|              |          |          |         |         | 100.00% |
+--------------+----------+----------+---------+---------+---------+
| Malaysia     | 0        | 3,091    | 1,033   | 0       | -       |
|              |          |          |         |         | 100.00% |
+--------------+----------+----------+---------+---------+---------+
| Others       | 0        | 0        | 0       | 0       | 0.00%   |
+--------------+----------+----------+---------+---------+---------+
| TOTAL        | 57,171   | 58,280   | 27,327  | 23,849  | -12.73% |
+--------------+----------+----------+---------+---------+---------+
| Source:      |          |          |         |         |         |
| China        |          |          |         |         |         |
| Customs      |          |          |         |         |         |
|              |          |          |         |         |         |
| #####        |          |          |         |         |         |
| ## HS Codes: |          |          |         |         |         |
|  0102.1000 a |          |          |         |         |         |
| nd 0102.9000 |          |          |         |         |         |
+--------------+----------+----------+---------+---------+---------+

+--------------+--------+--------+------------+------------+--------+
| China\'s     |        |        |            |            |        |
| Fresh,       |        |        |            |            |        |
| Chilled and  |        |        |            |            |        |
| Frozen Beef  |        |        |            |            |        |
| Exports by   |        |        |            |            |        |
| Destination  |        |        |            |            |        |
| (China Data) |        |        |            |            |        |
|              |        |        |            |            |        |
| (Metric      |        |        |            |            |        |
| Tons,        |        |        |            |            |        |
| Product      |        |        |            |            |        |
| Weight)      |        |        |            |            |        |
+--------------+--------+--------+------------+------------+--------+
|              |        |        |            |            |        |
+--------------+--------+--------+------------+------------+--------+
| DESTINATION  | 2001   | 2002   | 2002       | 2003       | 2      |
|              |        |        |            |            | 002/03 |
+--------------+--------+--------+------------+------------+--------+
|              | J      | J      | Jan-Jun    | Jan-Jun    | J      |
|              | an-Dec | an-Dec |            |            | an-Jun |
+--------------+--------+--------+------------+------------+--------+
|              |        |        | (C         | (C         | \%     |
|              |        |        | omparison) | omparison) | Change |
+--------------+--------+--------+------------+------------+--------+
| Hong Kong    | 11,062 | 8,129  | 4,007      | 3,008      | -      |
|              |        |        |            |            | 24.93% |
+--------------+--------+--------+------------+------------+--------+
| Russia       | 658    | 1,426  | 787        | 195        | -      |
|              |        |        |            |            | 75.22% |
+--------------+--------+--------+------------+------------+--------+
| U.A.E.       | 309    | 631    | 313        | 181        | -      |
|              |        |        |            |            | 42.17% |
+--------------+--------+--------+------------+------------+--------+
| Korea, DPR   | 456    | 193    | 61         | 47         | -      |
|              |        |        |            |            | 22.95% |
+--------------+--------+--------+------------+------------+--------+
| Egypt        | 6,176  | 697    | 299        | 14         | -      |
|              |        |        |            |            | 95.32% |
+--------------+--------+--------+------------+------------+--------+
| Japan        | 0      | 0      | 0          | 5          | 1      |
|              |        |        |            |            | 00.00% |
+--------------+--------+--------+------------+------------+--------+
| Macao        | 50     | 29     | 17         | 0          | -1     |
|              |        |        |            |            | 00.00% |
+--------------+--------+--------+------------+------------+--------+
| Palestine    | 390    | 0      | 0          | 0          | 0.00%  |
+--------------+--------+--------+------------+------------+--------+
| Israel       | 429    | 0      | 0          | 0          | 0.00%  |
+--------------+--------+--------+------------+------------+--------+
| Saudi Arabia | 481    | 0      | 0          | 0          | 0.00%  |
+--------------+--------+--------+------------+------------+--------+
| Kuwait       | 767    | 509    | 211        | 0          | -1     |
|              |        |        |            |            | 00.00% |
+--------------+--------+--------+------------+------------+--------+
| Others       | 654    | 58     | 181        | 55         | -      |
|              |        |        |            |            | 69.61% |
+--------------+--------+--------+------------+------------+--------+
| TOTAL        | 21,432 | 11,672 | 5,876      | 3,505      | -      |
|              |        |        |            |            | 40.35% |
+--------------+--------+--------+------------+------------+--------+
| Source:      |        |        |            |            |        |
| China        |        |        |            |            |        |
| Customs      |        |        |            |            |        |
|              |        |        |            |            |        |
| ####### HS   |        |        |            |            |        |
|  Codes: 0201 |        |        |            |            |        |
| .1000, 0201. |        |        |            |            |        |
| 2000, 0201.3 |        |        |            |            |        |
| 000, 0202.10 |        |        |            |            |        |
| 00, 0202.200 |        |        |            |            |        |
| 0, 0202.3000 |        |        |            |            |        |
+--------------+--------+--------+------------+------------+--------+

+-----------+--------+---------+------------+-------------+----------+
| U.S.      |        |         |            |             |          |
| EXPORTS   |        |         |            |             |          |
| OF BEEF,  |        |         |            |             |          |
| BEEF      |        |         |            |             |          |
| OFFAL TO  |        |         |            |             |          |
| CHINA     |        |         |            |             |          |
| (U.S.     |        |         |            |             |          |
| Date)     |        |         |            |             |          |
|           |        |         |            |             |          |
| (Metric   |        |         |            |             |          |
| Tons,     |        |         |            |             |          |
| Product   |        |         |            |             |          |
| Weight)   |        |         |            |             |          |
+-----------+--------+---------+------------+-------------+----------+
|           | 2001   | 2002    | 2002       | 2003        | 2002/03  |
+-----------+--------+---------+------------+-------------+----------+
| BEEF      | J      | Jan-Dec | Jan-May    | Jan-May     | Jan-May  |
|           | an-Dec |         |            |             |          |
+-----------+--------+---------+------------+-------------+----------+
|           |        |         | (C         | (           | \% Chng  |
|           |        |         | omparison) | Comparison) |          |
+-----------+--------+---------+------------+-------------+----------+
| China     | 3,483  | 5,856   | 2,291      | 1,196       | -47.80%  |
+-----------+--------+---------+------------+-------------+----------+
| Hong Kong | 11,821 | 19,224  | 5,651      | 4,029       | -28.70%  |
+-----------+--------+---------+------------+-------------+----------+
| TOTAL     | 15,304 | 25,080  | 7,942      | 5,225       | -34.21%  |
+-----------+--------+---------+------------+-------------+----------+
|           |        |         |            |             |          |
+-----------+--------+---------+------------+-------------+----------+
| BEEF      |        |         |            |             |          |
| OFFAL     |        |         |            |             |          |
+-----------+--------+---------+------------+-------------+----------+
| China     | 3,351  | 4,583   | 1,650      | 2,516       | 52.48%   |
+-----------+--------+---------+------------+-------------+----------+
| Hong Kong | 8,518  | 5,490   | 2,392      | 2,922       | 22.16%   |
+-----------+--------+---------+------------+-------------+----------+
| TOTAL     | 11,869 | 10,073  | 4,042      | 5,438       | 34.54%   |
+-----------+--------+---------+------------+-------------+----------+
| #######   |        |         |            |             |          |
|  Source:  |        |         |            |             |          |
| FAS, USDA |        |         |            |             |          |
+-----------+--------+---------+------------+-------------+----------+

<table style="width:100%;">
<colgroup>
<col style="width: 24%" />
<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: 7%" />
<col style="width: 7%" />
<col style="width: 16%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10">CHINA RETAIL BEEF PRICES (RMB/KG, US$ 1=8.27)</td>
</tr>
<tr class="even">
<td></td>
<td>2002</td>
<td></td>
<td></td>
<td></td>
<td>2003</td>
<td></td>
<td></td>
<td></td>
<td>Change 02/03</td>
</tr>
<tr class="odd">
<td>Provinces</td>
<td>Mar</td>
<td>Jun</td>
<td>Sep</td>
<td>Dec</td>
<td>Mar</td>
<td>Jun</td>
<td>Sep</td>
<td>Dec</td>
<td>Jun-Jun</td>
</tr>
<tr class="even">
<td>NAT'L AVG 1/</td>
<td>14.21</td>
<td>13.96</td>
<td>14.25</td>
<td>14.77</td>
<td>15.03</td>
<td>15.08</td>
<td></td>
<td></td>
<td>8.02%</td>
</tr>
<tr class="odd">
<td>Beijing</td>
<td>13.04</td>
<td>12.80</td>
<td>14.04</td>
<td>15.44</td>
<td>15.78</td>
<td>15.48</td>
<td></td>
<td></td>
<td>20.94%</td>
</tr>
<tr class="even">
<td>Tianjin</td>
<td>14.00</td>
<td>12.67</td>
<td>13.67</td>
<td>14.67</td>
<td>14.75</td>
<td>14.00</td>
<td></td>
<td></td>
<td>10.50%</td>
</tr>
<tr class="odd">
<td>Hebei</td>
<td>12.92</td>
<td>13.11</td>
<td>13.52</td>
<td>14.00</td>
<td>14.10</td>
<td>13.86</td>
<td></td>
<td></td>
<td>5.72%</td>
</tr>
<tr class="even">
<td>Shanxi</td>
<td>13.47</td>
<td>14.00</td>
<td>13.76</td>
<td>15.00</td>
<td>14.44</td>
<td>14.04</td>
<td></td>
<td></td>
<td>0.29%</td>
</tr>
<tr class="odd">
<td>Inner Mongolia</td>
<td>14.25</td>
<td>13.63</td>
<td>13.90</td>
<td>16.00</td>
<td>14.50</td>
<td>15.17</td>
<td></td>
<td></td>
<td>11.30%</td>
</tr>
<tr class="even">
<td>Liaoning</td>
<td>14.31</td>
<td>14.84</td>
<td>15.59</td>
<td>16.00</td>
<td>16.05</td>
<td>15.05</td>
<td></td>
<td></td>
<td>1.42%</td>
</tr>
<tr class="odd">
<td>Jilin</td>
<td>14.10</td>
<td>14.90</td>
<td>15.50</td>
<td>15.80</td>
<td>16.50</td>
<td>15.83</td>
<td></td>
<td></td>
<td>6.24%</td>
</tr>
<tr class="even">
<td>Heilongjiang</td>
<td>13.00</td>
<td>14.12</td>
<td>14.82</td>
<td>15.26</td>
<td>15.50</td>
<td>14.93</td>
<td></td>
<td></td>
<td>5.74%</td>
</tr>
<tr class="odd">
<td>Shanghai</td>
<td>20.67</td>
<td>20.53</td>
<td>20.60</td>
<td>20.93</td>
<td>20.93</td>
<td>21.63</td>
<td></td>
<td></td>
<td>5.36%</td>
</tr>
<tr class="even">
<td>Jiangsu</td>
<td>13.48</td>
<td>13.19</td>
<td>13.38</td>
<td>14.75</td>
<td>14.50</td>
<td>13.77</td>
<td></td>
<td></td>
<td>4.40%</td>
</tr>
<tr class="odd">
<td>Zhejiang</td>
<td>17.45</td>
<td>16.44</td>
<td>17.19</td>
<td>19.40</td>
<td>19.47</td>
<td>19.41</td>
<td></td>
<td></td>
<td>18.07%</td>
</tr>
<tr class="even">
<td>Anhui</td>
<td>14.02</td>
<td>13.06</td>
<td>13.29</td>
<td>16.14</td>
<td>14.05</td>
<td>13.82</td>
<td></td>
<td></td>
<td>5.82%</td>
</tr>
<tr class="odd">
<td>Fujian</td>
<td>16.45</td>
<td>16.31</td>
<td>18.64</td>
<td>17.56</td>
<td>18.96</td>
<td>20.03</td>
<td></td>
<td></td>
<td>22.81%</td>
</tr>
<tr class="even">
<td>Jiangxi</td>
<td>13.83</td>
<td>13.75</td>
<td>14.36</td>
<td>15.74</td>
<td>15.57</td>
<td>14.61</td>
<td></td>
<td></td>
<td>6.25%</td>
</tr>
<tr class="odd">
<td>Shandong</td>
<td>13.26</td>
<td>13.27</td>
<td>14.53</td>
<td>14.06</td>
<td>14.26</td>
<td>13.68</td>
<td></td>
<td></td>
<td>3.09%</td>
</tr>
<tr class="even">
<td>Henan</td>
<td>13.12</td>
<td>14.09</td>
<td>13.97</td>
<td>14.19</td>
<td>14.35</td>
<td>13.92</td>
<td></td>
<td></td>
<td>-1.21%</td>
</tr>
<tr class="odd">
<td>Hubei</td>
<td>12.21</td>
<td>12.21</td>
<td>12.66</td>
<td>12.94</td>
<td>13.42</td>
<td>13.53</td>
<td></td>
<td></td>
<td>10.81%</td>
</tr>
<tr class="even">
<td>Hunan</td>
<td>14.11</td>
<td>12.39</td>
<td>14.37</td>
<td>14.50</td>
<td>14.71</td>
<td>14.61</td>
<td></td>
<td></td>
<td>17.92%</td>
</tr>
<tr class="odd">
<td>Guangdong</td>
<td>17.63</td>
<td>17.31</td>
<td>17.38</td>
<td>17.59</td>
<td>18.25</td>
<td>18.88</td>
<td></td>
<td></td>
<td>9.07%</td>
</tr>
<tr class="even">
<td>Guangxi</td>
<td>12.38</td>
<td>12.29</td>
<td>12.84</td>
<td>13.47</td>
<td>13.82</td>
<td>13.98</td>
<td></td>
<td></td>
<td>13.75%</td>
</tr>
<tr class="odd">
<td>Hainan</td>
<td>14.50</td>
<td>15.00</td>
<td>15.00</td>
<td>14.75</td>
<td>15.50</td>
<td>15.25</td>
<td></td>
<td></td>
<td>1.67%</td>
</tr>
<tr class="even">
<td>Sichuan</td>
<td>12.10</td>
<td>12.15</td>
<td>12.10</td>
<td>13.30</td>
<td>13.09</td>
<td>13.53</td>
<td></td>
<td></td>
<td>11.36%</td>
</tr>
<tr class="odd">
<td>Guizhou</td>
<td>12.56</td>
<td>12.99</td>
<td>12.83</td>
<td>13.58</td>
<td>14.07</td>
<td>14.09</td>
<td></td>
<td></td>
<td>8.47%</td>
</tr>
<tr class="even">
<td>Yunan</td>
<td>14.64</td>
<td>14.59</td>
<td>14.62</td>
<td>14.38</td>
<td>14.92</td>
<td>15.14</td>
<td></td>
<td></td>
<td>3.77%</td>
</tr>
<tr class="odd">
<td>Tibet</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td></td>
<td></td>
<td>N/a</td>
</tr>
<tr class="even">
<td>Shaanxi</td>
<td>14.00</td>
<td>14.25</td>
<td>12.83</td>
<td>14.33</td>
<td>16.00</td>
<td>13.03</td>
<td></td>
<td></td>
<td>-8.56%</td>
</tr>
<tr class="odd">
<td>Gansu</td>
<td>13.65</td>
<td>15.15</td>
<td>14.51</td>
<td>14.80</td>
<td>14.92</td>
<td>15.55</td>
<td></td>
<td></td>
<td>2.64%</td>
</tr>
<tr class="even">
<td>Qinghai</td>
<td>14.33</td>
<td>14.75</td>
<td>12.38</td>
<td>14.83</td>
<td>14.33</td>
<td>17.25</td>
<td></td>
<td></td>
<td>16.95%</td>
</tr>
<tr class="odd">
<td>Ningxia</td>
<td>13.50</td>
<td>14.00</td>
<td>13.00</td>
<td>15.60</td>
<td>16.20</td>
<td>16.20</td>
<td></td>
<td></td>
<td>15.71%</td>
</tr>
<tr class="even">
<td>Xinjiang</td>
<td>16.30</td>
<td>16.21</td>
<td>n/a</td>
<td>16.00</td>
<td>15.95</td>
<td>16.82</td>
<td></td>
<td></td>
<td>3.76%</td>
</tr>
<tr class="odd">
<td>Chongqing</td>
<td>13.03</td>
<td>13.57</td>
<td>13.86</td>
<td>14.60</td>
<td>15.19</td>
<td>14.99</td>
<td></td>
<td></td>
<td>10.46%</td>
</tr>
<tr class="even">
<td colspan="10"><p>Source: The Ministry of Agriculture (MOA)</p>
<p>1/ The national average prices are based on all the counties selected
for sampling surveys.</p></td>
</tr>
</tbody>
</table>

  ------------------ ------------------ --------- ------- --------- -----------
  Tariffs on Cattle                                                 
  and Beef,                                                         
  Effective January                                                 
  1, 2003                                                           

                                                                    Effective

                                        General   MFN     V.A.T. 1/ Rate

                                                                    (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%       29%     13%       45.8%
  half-carcass                                                      

  other cuts with    0201.2000          70%       18.6%   13%       34.0%
  bone s                                                            

  Boneless           0201.3000          70%       18.6%   13%       34.0%

                                                                    

  Beef, Frzn                                                        

  carcass &          0202.1000          70%       29%     13%       45.8%
  half-carcass                                                      

  other cuts with    0202.2000          70%       18.6%   13%       34.0%
  bones                                                             

  Boneless           0202.3000          70%       18.6%   13%       34.0%

                                                                    

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

+-----------+-----------+---------+-----------+-----------+-----------+
| ##        |           |         |           |           |           |
| ##### Tar |           |         |           |           |           |
| iffs on B |           |         |           |           |           |
| eef, Offa |           |         |           |           |           |
| l Effecti |           |         |           |           |           |
| ve Januar |           |         |           |           |           |
| y 1, 2003 |           |         |           |           |           |
+-----------+-----------+---------+-----------+-----------+-----------+
|           |           |         |           |           | Effective |
+-----------+-----------+---------+-----------+-----------+-----------+
|           |           | General | MFN       | V.A.T.    | Rate      |
+-----------+-----------+---------+-----------+-----------+-----------+
|           |           |         |           |           | (mfn+vat) |
+-----------+-----------+---------+-----------+-----------+-----------+
|           |           |         |           |           |           |
+-----------+-----------+---------+-----------+-----------+-----------+
| Beef      | 0206.1000 | 70%     | 13.6%     | 13%       | 28.4%     |
| Offal     |           |         |           |           |           |
+-----------+-----------+---------+-----------+-----------+-----------+
|           | 0206.2100 |         |           |           |           |
+-----------+-----------+---------+-----------+-----------+-----------+
|           | 0206.2200 |         |           |           |           |
+-----------+-----------+---------+-----------+-----------+-----------+
|           | 0206.2900 |         |           |           |           |
+-----------+-----------+---------+-----------+-----------+-----------+
|           |           |         |           |           |           |
+-----------+-----------+---------+-----------+-----------+-----------+
| ##        |           |         |           |           |           |
| ##### Sou |           |         |           |           |           |
| rce: Chin |           |         |           |           |           |
| a Customs |           |         |           |           |           |
+-----------+-----------+---------+-----------+-----------+-----------+

# Swine and Pork

## Swine production forecast to be flat during 2003 and 2004 due to weak consumer demand for pork stemming from rising popularity of other meats.

China's swine industry faces stagnant demand from consumers due to
gaining popularity of other meats. Official statistics showed a smaller
pace of growth in both swine inventory and pork production in 2002 over
the previous year. The past nine months, hog prices were at low levels.
However, low feed prices have helped the swine industry gain some
marginal profits. Given these realities, the Chinese Government appears
moving to discourage expansion of the swine industry. As evidence, when
the Ministry of Agriculture recently announced the national strategic
"Advantageous Production Area Development Program", swine was not
included like beef and dairy cattle.

Increasingly health conscious Chinese consumers, especially urban
residents, prefer leaner pork. As a result, the swine industry has
adjusted the swine production structure from expanding animal size to
improving quality of the finished product. For example, the number of
three-way crossbred, lean hogs has increased about five percent on the
main production farms, but these efforts are not enough. Compared with
western countries, the lean meat per hog in China is only 50 percent, on
average.

## Pork consumption has fallen from 80% in 1980s of all meat consumed to a new low of 62.23% in the first five months of 2003

In China pork consumption still commands the largest share of all meats
consumed. According to NSB China's per capita consumption was 1.78
kilograms in the first five months in 2003, accounting for 62.23 percent
of all meat. However, any growth in total volume consumed reflects the
steady pace of population growth and not per capita consumption gains.
Chinese consumers, especially women and the older generation in urban
cities, consider pork too fatty compared with others meats, a factor
which is not good for health. According to the industry, most pork
consumption increases stem from residents of newly urbanized towns and
farmers who do manual labor in cities. Wealthier Chinese consumers are
looking for greater diversity in their meat consumption such as beef,
mutton and poultry. This trend will continue in the next couple of years
as a strong economy and rising incomes makes purchases of other meats
more affordable.

## Prices for pork remain lackluster.

According to data from the Ministry of Agriculture, pork prices on
average for June 2003 were decreasing against the same month of the
previous year. With consumption growing slowly due mainly to population
increases and supply outstripping demand, prices will not rise to the
high levels seen in the early 1990s. Prices will fluctuate as normal
during the high consumption season.

## 

## Fraud prevention efforts strengthening in China---USDA/FSIS certificates should improve sales opportunities for imported U.S. pork products.

The past year USDA and China's AQSIQ officials made progress on several
beef and pork trade issues. Both sides agreed to use a new FSIS export
health certificate that utilizes a watermark to show authenticity. The
other success was that China accepted the U.S. suggestion to use
stick-on labeling marks on outer boxes instead of print-on labeling
marks. This change will reduce export costs for U.S. traders. Both
procedures were originally raised by China as a means to deal with fraud
of products. There have been no reports of trade disruptions since the
new labeling became effective. However, significant issues such as
China's zero tolerance levels for E. coli and Salmonella (please refer
to FAS/Beijing's report, CH2009) remain pending.

Chinese statistics of pork and offal imports inflate U.S. pork and offal
exports to China. Some mislabeled pork products (normally lower quality
products repackaged in Hong Kong) imported as U.S. origin are even
accompanied by a fake U.S. health certificate. Recently, AQSIQ officials
who claimed they found a drug residue forbidden in China rejected a
shipment of pork offal. However, according to the industry, the supposed
drug was never applied nor was that product even exported to China.

In response to these food safety and fraud concerns, during August 2003
the U.S. Meat Export Federation held technical seminars with the
Ministry of Health, AQSIQ officials, and the meat trade on as wide range
of meat trade issues. A better understanding of the U.S. Government and
meat industry cooperation on export health certificates will hopefully
help reduce these kinds of problems.

China continues practicing strict entry requirements for European
products after the EU shut off most Chinese livestock and aquatic
exports due to drug residue concerns. The EU's export share to China for
both meat and offal dropped considerably in 2002 and in the first
quarter of 2003. Simultaneously, the U.S. exports are increasing and
cutting into the EU share because of stricter entry requirements from
the EU and better quality U.S. pork products, according to traders.

During the first two quarters of 2003, U.S. offal exports to China more
than doubled over the same period of the previous year. This pork market
should remain stable, and imports in 2004 should be at or above this
year's level. Offal imports in 2002 were lower than expected mainly
because the decreased EU share of exports to China was so fast that the
increased US share could not compensate for it. Trade friction between
the EU and China, coupled with competitive U.S. pork offal products,
favors a shifting in the export share towards the United States.

Since Europe closed its market to most Chinese meat and aquatic
products, China has shifted its strategy of focusing on pork exports to
neighboring countries or areas. Pork access to Russia, though not
smooth, has made good process. Russia is now China's biggest export
market. As the export volume to Russia in the first two quarters of 2003
(China data in the table below) already increased 7.6 percent of the
total volume last year and the volume to Hong Kong is also growing, 25.4
percent, due to demand increases. China's total exports in 2003 are
estimated to rise above last year's level and continue increasing in
2004.

<table style="width:100%;">
<colgroup>
<col style="width: 30%" />
<col style="width: 10%" />
<col style="width: 1%" />
<col style="width: 10%" />
<col style="width: 0%" />
<col style="width: 10%" />
<col style="width: 1%" />
<col style="width: 10%" />
<col style="width: 1%" />
<col style="width: 9%" />
<col style="width: 11%" />
</colgroup>
<tbody>
<tr class="odd">
<td><strong>PSD Table</strong></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="even">
<td><strong>Country</strong></td>
<td colspan="10"><h6 id="china-peoples-republic-of-1">China, Peoples
Republic of</h6></td>
</tr>
<tr class="odd">
<td><strong>Commodity</strong></td>
<td colspan="8"><h6 id="animal-numbers-swine">Animal Numbers,
Swine</h6></td>
<td colspan="2">(1000 HEAD)</td>
</tr>
<tr class="even">
<td></td>
<td colspan="2">2002</td>
<td colspan="2">Revised</td>
<td colspan="2">2003</td>
<td colspan="2">Estimate</td>
<td>2004</td>
<td>Forecast</td>
</tr>
<tr class="odd">
<td></td>
<td colspan="2">USDA Official [Old]</td>
<td colspan="2">Post Estimate [New]</td>
<td colspan="2">USDA Official [Old]</td>
<td colspan="2">Post Estimate [New]</td>
<td>USDA Official [Old]</td>
<td>Post Estimate [New]</td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td colspan="2"></td>
<td colspan="2">01/2002</td>
<td colspan="2"></td>
<td colspan="2">01/2003</td>
<td></td>
<td>01/2004</td>
</tr>
<tr class="odd">
<td>TOTAL Beginning Stocks</td>
<td colspan="2">457430</td>
<td colspan="2">457430</td>
<td colspan="2">464000</td>
<td colspan="2">462917</td>
<td>470000</td>
<td>467902</td>
</tr>
<tr class="even">
<td>Sow Beginning Stocks</td>
<td colspan="2">37250</td>
<td colspan="2">37250</td>
<td colspan="2">37800</td>
<td colspan="2">37800</td>
<td>0</td>
<td>38367</td>
</tr>
<tr class="odd">
<td>Production (Pig Crop)</td>
<td colspan="2">574367</td>
<td colspan="2">575212</td>
<td colspan="2">585797</td>
<td colspan="2">575300</td>
<td>0</td>
<td>580000</td>
</tr>
<tr class="even">
<td>Intra EC Imports</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Other Imports</td>
<td colspan="2">3</td>
<td colspan="2">3</td>
<td colspan="2">3</td>
<td colspan="2">1</td>
<td>0</td>
<td>1</td>
</tr>
<tr class="even">
<td>TOTAL Imports</td>
<td colspan="2">3</td>
<td colspan="2">3</td>
<td colspan="2">3</td>
<td colspan="2">1</td>
<td>0</td>
<td>1</td>
</tr>
<tr class="odd">
<td>TOTAL SUPPLY</td>
<td colspan="2">1031800</td>
<td colspan="2">1032645</td>
<td colspan="2">1049800</td>
<td colspan="2">1038218</td>
<td>470000</td>
<td>1047903</td>
</tr>
<tr class="even">
<td>Intra EC Exports</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Other Exports</td>
<td colspan="2">1800</td>
<td colspan="2">1888</td>
<td colspan="2">1800</td>
<td colspan="2">1850</td>
<td>0</td>
<td>1800</td>
</tr>
<tr class="even">
<td>TOTAL Exports</td>
<td colspan="2">1800</td>
<td colspan="2">1888</td>
<td colspan="2">1800</td>
<td colspan="2">1850</td>
<td>0</td>
<td>1800</td>
</tr>
<tr class="odd">
<td>Sow Slaughter</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>OTHER SLAUGHTER</td>
<td colspan="2">565000</td>
<td colspan="2">566840</td>
<td colspan="2">577000</td>
<td colspan="2">567466</td>
<td>0</td>
<td>574693</td>
</tr>
<tr class="odd">
<td>Total Slaughter</td>
<td colspan="2">565000</td>
<td colspan="2">566840</td>
<td colspan="2">577000</td>
<td colspan="2">567466</td>
<td>0</td>
<td>574693</td>
</tr>
<tr class="even">
<td>Loss</td>
<td colspan="2">1000</td>
<td colspan="2">1000</td>
<td colspan="2">1000</td>
<td colspan="2">1000</td>
<td>0</td>
<td>1000</td>
</tr>
<tr class="odd">
<td>Ending Inventories</td>
<td colspan="2">464000</td>
<td colspan="2">462917</td>
<td colspan="2">470000</td>
<td colspan="2">467902</td>
<td>0</td>
<td>470410</td>
</tr>
<tr class="even">
<td>TOTAL DISTRIBUTION</td>
<td colspan="2">1031800</td>
<td colspan="2">1032645</td>
<td colspan="2">1049800</td>
<td colspan="2">1038218</td>
<td>0</td>
<td>1047903</td>
</tr>
<tr class="odd">
<td>Calendar Yr. Imp. from U.S.</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Calendar Yr. Exp. to U.S.</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td>0</td>
<td>0</td>
</tr>
</tbody>
</table>

+----------------------+-----+-------+-------+-------+-------+-------+
| **PSD Table**        |     |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| **Country**          | #   |       |       |       |       |       |
|                      | ### |       |       |       |       |       |
|                      | ##  |       |       |       |       |       |
|                      | Chi |       |       |       |       |       |
|                      | na, |       |       |       |       |       |
|                      |  Pe |       |       |       |       |       |
|                      | opl |       |       |       |       |       |
|                      | es  |       |       |       |       |       |
|                      | Rep |       |       |       |       |       |
|                      | ubl |       |       |       |       |       |
|                      | ic  |       |       |       |       |       |
|                      | of  |       |       |       |       |       |
|                      | {#c |       |       |       |       |       |
|                      | hin |       |       |       |       |       |
|                      | a-p |       |       |       |       |       |
|                      | eop |       |       |       |       |       |
|                      | les |       |       |       |       |       |
|                      | -re |       |       |       |       |       |
|                      | pub |       |       |       |       |       |
|                      | lic |       |       |       |       |       |
|                      | -of |       |       |       |       |       |
|                      | -2} |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| **Commodity**        | ### |       |       |       | (1000 |       |
|                      | ### |       |       |       | MT    |       |
|                      |  Me |       |       |       | CWE)  |       |
|                      | at, |       |       |       | (1000 |       |
|                      |  Sw |       |       |       | HEAD) |       |
|                      | ine |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
|                      | 2   | Re    | 2003  | Est   | 2004  | For   |
|                      | 002 | vised |       | imate |       | ecast |
+----------------------+-----+-------+-------+-------+-------+-------+
|                      | U   | Post  | USDA  | Post  | USDA  | Post  |
|                      | SDA | Est   | Off   | Est   | Off   | Est   |
|                      | Of  | imate | icial | imate | icial | imate |
|                      | fic | \[    | \[    | \[    | \[    | \[    |
|                      | ial | New\] | Old\] | New\] | Old\] | New\] |
|                      | \   |       |       |       |       |       |
|                      | [Ol |       |       |       |       |       |
|                      | d\] |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| **Market Year        |     | 01    |       | 01    |       | 01    |
| Begin**              |     | /2002 |       | /2003 |       | /2004 |
+----------------------+-----+-------+-------+-------+-------+-------+
| Slaughter            | 565 | 5     | 5     | 5     | 0     | 5     |
| (Reference)          | 000 | 66840 | 77000 | 67466 |       | 74693 |
+----------------------+-----+-------+-------+-------+-------+-------+
| Beginning Stocks     | 0   | 0     | 0     | 0     | 0     | 0     |
+----------------------+-----+-------+-------+-------+-------+-------+
| Production           | 43  | 43266 | 44100 | 44100 | 0     | 44938 |
|                      | 000 |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| Intra EC Imports     | 0   | 0     | 0     | 0     | 0     | 0     |
+----------------------+-----+-------+-------+-------+-------+-------+
| Other Imports        | 60  | 60    | 70    | 56    | 0     | 70    |
+----------------------+-----+-------+-------+-------+-------+-------+
| TOTAL Imports        | 60  | 60    | 70    | 56    | 0     | 70    |
+----------------------+-----+-------+-------+-------+-------+-------+
| TOTAL SUPPLY         | 43  | 43326 | 44170 | 44156 | 0     | 45008 |
|                      | 060 |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| Intra EC Exports     | 0   | 0     | 0     | 0     | 0     | 0     |
+----------------------+-----+-------+-------+-------+-------+-------+
| Other Exports        | 225 | 225   | 200   | 300   | 0     | 300   |
+----------------------+-----+-------+-------+-------+-------+-------+
| TOTAL Exports        | 225 | 225   | 200   | 300   | 0     | 300   |
+----------------------+-----+-------+-------+-------+-------+-------+
| Human Dom.           | 42  | 43101 | 43970 | 43856 | 0     | 44708 |
| Consumption          | 835 |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| Other Use, Losses    | 0   | 0     | 0     | 0     | 0     | 0     |
+----------------------+-----+-------+-------+-------+-------+-------+
| TOTAL Dom.           | 42  | 43101 | 43970 | 43856 | 0     | 44708 |
| Consumption          | 835 |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| Ending Stocks        | 0   | 0     | 0     | 0     | 0     | 0     |
+----------------------+-----+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION   | 43  | 43326 | 44170 | 44156 | 0     | 45008 |
|                      | 060 |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| Calendar Yr. Imp.    | 0   | 9     | 0     | 27    | 0     | 35    |
| from U.S.            |     |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+
| Calendar Yr. Exp. to | 0   | 0     | 0     | 0     | 0     | 0     |
| U.S.                 |     |       |       |       |       |       |
+----------------------+-----+-------+-------+-------+-------+-------+

+--------------+---------+---------+----------+----------+---------+
| China\'s     |         |         |          |          |         |
| Fresh,       |         |         |          |          |         |
| Chilled and  |         |         |          |          |         |
| Frozen Pork  |         |         |          |          |         |
| Imports by   |         |         |          |          |         |
| Origin       |         |         |          |          |         |
| (China Data) |         |         |          |          |         |
|              |         |         |          |          |         |
| (Metric      |         |         |          |          |         |
| Tons,        |         |         |          |          |         |
| Product      |         |         |          |          |         |
| Weight)      |         |         |          |          |         |
+--------------+---------+---------+----------+----------+---------+
| Country      | 2001    | 2002    | 2002     | 2003     | 2002/03 |
+--------------+---------+---------+----------+----------+---------+
|              | Jan-Dec | Jan-Dec | Jan-Jun  | Jan-Jun  | Jan-Jun |
+--------------+---------+---------+----------+----------+---------+
|              |         |         | (Com     | (Com     | \% Chng |
|              |         |         | parison) | parison) |         |
+--------------+---------+---------+----------+----------+---------+
| United       | 39,558  | 108,214 | 56,106   | 24,448   | -56.43% |
| States       |         |         |          |          |         |
+--------------+---------+---------+----------+----------+---------+
| Canada       | 22,207  | 35,002  | 15,638   | 13,635   | -12.81% |
+--------------+---------+---------+----------+----------+---------+
| Denmark      | 17,731  | 1,444   | 101      | 12,507   | 12      |
|              |         |         |          |          | 283.17% |
+--------------+---------+---------+----------+----------+---------+
| Belgium      | 6,731   | 105     | 28       | 0        | -       |
|              |         |         |          |          | 100.00% |
+--------------+---------+---------+----------+----------+---------+
| France       | 2,400   | 48      | 24       | 1        | -95.83% |
+--------------+---------+---------+----------+----------+---------+
| United       | 95      | 25      | 25       | 2        | -92.00% |
| Kingdom      |         |         |          |          |         |
+--------------+---------+---------+----------+----------+---------+
| Netherlands  | 3,527   | 8       | 8        | 3        | -62.50% |
+--------------+---------+---------+----------+----------+---------+
| Others       | 2,025   | 59      | 0        | 4        | 100.00% |
+--------------+---------+---------+----------+----------+---------+
|              |         |         |          |          |         |
+--------------+---------+---------+----------+----------+---------+
| TOTAL        | 94,274  | 144,905 | 71,930   | 50,600   | -29.65% |
+--------------+---------+---------+----------+----------+---------+
| Source:      |         |         |          |          |         |
| China        |         |         |          |          |         |
| Customs      |         |         |          |          |         |
| Statistics   |         |         |          |          |         |
|              |         |         |          |          |         |
| HS Codes:    |         |         |          |          |         |
| 0203.1110,   |         |         |          |          |         |
| 0203.1190,   |         |         |          |          |         |
| 0203.1200,   |         |         |          |          |         |
| 0203.1900,   |         |         |          |          |         |
| 0203.2110,   |         |         |          |          |         |
| 0203.2190,   |         |         |          |          |         |
|              |         |         |          |          |         |
| 0203.2200    |         |         |          |          |         |
| and          |         |         |          |          |         |
| 0203.2900    |         |         |          |          |         |
+--------------+---------+---------+----------+----------+---------+

+-------------+----------+---------+----------+----------+---------+
| China\'s    |          |         |          |          |         |
| Pork Offal  |          |         |          |          |         |
| Imports by  |          |         |          |          |         |
| Origin      |          |         |          |          |         |
| (China      |          |         |          |          |         |
| Data)       |          |         |          |          |         |
|             |          |         |          |          |         |
| (Metric     |          |         |          |          |         |
| Tons,       |          |         |          |          |         |
| Product     |          |         |          |          |         |
| Weight)     |          |         |          |          |         |
+-------------+----------+---------+----------+----------+---------+
| SOURCE      | 2001     | 2002    | 2002     | 2003     | 2002/03 |
+-------------+----------+---------+----------+----------+---------+
|             | Jan-Dec  | Jan-Dec | Jan-Jun  | Jan-Jun  | Jan-Jun |
+-------------+----------+---------+----------+----------+---------+
|             |          |         | (Com     | (Com     | \%      |
|             |          |         | parison) | parison) | Change  |
+-------------+----------+---------+----------+----------+---------+
| United      | 39,944   | 47,435  | 13,937   | 48,470   | 247.78% |
| States      |          |         |          |          |         |
+-------------+----------+---------+----------+----------+---------+
| Canada      | 20,734   | 15,483  | 3,424    | 19,209   | 461.01% |
+-------------+----------+---------+----------+----------+---------+
| Denmark     | 25,446   | 8,502   | 1,015    | 19,659   | 1       |
|             |          |         |          |          | 836.85% |
+-------------+----------+---------+----------+----------+---------+
| France      | 3,823    | 1,202   | 605      | 0        | -       |
|             |          |         |          |          | 100.00% |
+-------------+----------+---------+----------+----------+---------+
| Belgium     | 7,447    | 944     | 202      | 0        | -       |
|             |          |         |          |          | 100.00% |
+-------------+----------+---------+----------+----------+---------+
| Netherlands | 8,949    | 935     | 753      | 0        | -       |
|             |          |         |          |          | 100.00% |
+-------------+----------+---------+----------+----------+---------+
| United      | 51       | 0       | 0        | 0        | 0.00%   |
| Kingdom     |          |         |          |          |         |
+-------------+----------+---------+----------+----------+---------+
| Others      | 3,248    | 52      | 24       | 19       | -20.83% |
+-------------+----------+---------+----------+----------+---------+
|             |          |         |          |          |         |
+-------------+----------+---------+----------+----------+---------+
| TOTAL       | 109,642  | 74,553  | 19,960   | 87,357   | 337.66% |
+-------------+----------+---------+----------+----------+---------+
| Source:     |          |         |          |          |         |
| China       |          |         |          |          |         |
| Customs     |          |         |          |          |         |
| Statistics  |          |         |          |          |         |
|             |          |         |          |          |         |
| #####       |          |         |          |          |         |
| ## HS Codes |          |         |          |          |         |
| : 0206.3000 |          |         |          |          |         |
| , 0206.4100 |          |         |          |          |         |
| , 0206.4900 |          |         |          |          |         |
+-------------+----------+---------+----------+----------+---------+

+--------------+---------+----------+----------+----------+---------+
| China\'s     |         |          |          |          |         |
| Fresh,       |         |          |          |          |         |
| Chilled and  |         |          |          |          |         |
| Frozen Pork  |         |          |          |          |         |
| Export by    |         |          |          |          |         |
| Destination  |         |          |          |          |         |
| (China Data) |         |          |          |          |         |
|              |         |          |          |          |         |
| (Metric      |         |          |          |          |         |
| Tons,        |         |          |          |          |         |
| Product      |         |          |          |          |         |
| Weight)      |         |          |          |          |         |
+--------------+---------+----------+----------+----------+---------+
|              |         |          |          |          |         |
+--------------+---------+----------+----------+----------+---------+
| Destination  | 2001    | 2002     | 2002     | 2003     | 2002/03 |
+--------------+---------+----------+----------+----------+---------+
|              | Jan-Dec | Jan-Dec  | Jan-Jun  | Jan-Jun  | Jan-Jun |
+--------------+---------+----------+----------+----------+---------+
|              |         |          | (Com     | (Com     | \%      |
|              |         |          | parison) | parison) | Change  |
+--------------+---------+----------+----------+----------+---------+
| Russia       | 26,481  | 75,587   | 35,452   | 38,142   | 7.59%   |
+--------------+---------+----------+----------+----------+---------+
| Hong Kong    | 51,067  | 60,654   | 27,668   | 34,404   | 24.35%  |
+--------------+---------+----------+----------+----------+---------+
| Korea, DPR   | 5,076   | 9,010    | 6,540    | 10,494   | 60.46%  |
+--------------+---------+----------+----------+----------+---------+
| Singapore    | 11,276  | 8,729    | 4,118    | 2,868    | -30.35% |
+--------------+---------+----------+----------+----------+---------+
| Macao        | 2,098   | 2,481    | 1,114    | 1,473    | 32.23%  |
+--------------+---------+----------+----------+----------+---------+
| South Korea  | 0       | 25       | 0        | 660      | 100.00% |
+--------------+---------+----------+----------+----------+---------+
| Albania      | 1,486   | 1,832    | 792      | 408      | -48.48% |
+--------------+---------+----------+----------+----------+---------+
| Bulgaria     | 3,609   | 0        | 227      | 152      | -33.04% |
+--------------+---------+----------+----------+----------+---------+
| Philippines  | 64      | 1,449    | 685      | 10       | -98.54% |
+--------------+---------+----------+----------+----------+---------+
| Others       | 2,052   | 2,205    | 1,047    | 928      | -11.37% |
+--------------+---------+----------+----------+----------+---------+
| TOTAL        | 103,209 | 161,972  | 77,643   | 89,539   | 15.32%  |
+--------------+---------+----------+----------+----------+---------+
| Source:      |         |          |          |          |         |
| China        |         |          |          |          |         |
| Customs      |         |          |          |          |         |
|              |         |          |          |          |         |
| HS Codes:    |         |          |          |          |         |
| 0203.1110,   |         |          |          |          |         |
| 0203.1190,   |         |          |          |          |         |
| 0203.1200,   |         |          |          |          |         |
| 0203.1900,   |         |          |          |          |         |
| 0203.2110,   |         |          |          |          |         |
| 0203.2190,   |         |          |          |          |         |
|              |         |          |          |          |         |
| 0203.2200    |         |          |          |          |         |
| and          |         |          |          |          |         |
| 0203.2900    |         |          |          |          |         |
+--------------+---------+----------+----------+----------+---------+

+------------+----------+----------+-----------+-----------+----------+
| U.S.       |          |          |           |           |          |
| EXPORTS OF |          |          |           |           |          |
| PORK AND   |          |          |           |           |          |
| PORK OFFAL |          |          |           |           |          |
| TO CHINA   |          |          |           |           |          |
|            |          |          |           |           |          |
| (January-  |          |          |           |           |          |
| December,  |          |          |           |           |          |
| Metric     |          |          |           |           |          |
| Tons,      |          |          |           |           |          |
| Product    |          |          |           |           |          |
| Weight)    |          |          |           |           |          |
+------------+----------+----------+-----------+-----------+----------+
|            |          |          |           |           |          |
+------------+----------+----------+-----------+-----------+----------+
| PORK       | 2001     | 2002     | 2002      | 2003      | 2002/03  |
+------------+----------+----------+-----------+-----------+----------+
|            | Jan-Dec  | Jan-Dec  | Jan-May   | Jan-May   | Jan-May  |
+------------+----------+----------+-----------+-----------+----------+
|            |          |          | (Co       | (Co       | \% Chng  |
|            |          |          | mparison) | mparison) |          |
+------------+----------+----------+-----------+-----------+----------+
| China      | 6,184    | 7,389    | 2,773     | 4,781     | 72.41%   |
+------------+----------+----------+-----------+-----------+----------+
| Hong Kong  | 7,968    | 7,731    | 2,946     | 3,910     | 32.72%   |
+------------+----------+----------+-----------+-----------+----------+
| TOTAL      | 14,152   | 15,120   | 5,719     | 8,691     | 51.97%   |
+------------+----------+----------+-----------+-----------+----------+
|            |          |          |           |           |          |
+------------+----------+----------+-----------+-----------+----------+
| PORK OFFAL |          |          |           |           |          |
+------------+----------+----------+-----------+-----------+----------+
| China      | 7,779    | 5,460    | 2,239     | 1,071     | -52.17%  |
+------------+----------+----------+-----------+-----------+----------+
| Hong Kong  | 24,759   | 13,156   | 2,392     | 2,922     | 22.16%   |
+------------+----------+----------+-----------+-----------+----------+
| TOTAL      | 32,538   | 18,616   | 4,631     | 3,993     | -13.78%  |
+------------+----------+----------+-----------+-----------+----------+
| #####      |          |          |           |           |          |
| ## Source: |          |          |           |           |          |
|  FAS, USDA |          |          |           |           |          |
+------------+----------+----------+-----------+-----------+----------+

<table style="width:100%;">
<colgroup>
<col style="width: 19%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 15%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p>CHINA RETAIL HOG PRICES (RMB/KG, US$1=8.27)</p>
<table>
<colgroup>
<col style="width: 100%" />
</colgroup>
<tbody>
<tr class="odd">
<td></td>
</tr>
<tr class="even">
<td></td>
</tr>
</tbody>
</table></td>
</tr>
<tr class="even">
<td></td>
<td>2002</td>
<td></td>
<td></td>
<td></td>
<td>2003</td>
<td></td>
<td></td>
<td></td>
<td>Change 02/03</td>
</tr>
<tr class="odd">
<td>PROVINCE</td>
<td>Mar</td>
<td>Jun</td>
<td>Sep</td>
<td>Dec</td>
<td>Mar</td>
<td>Jun</td>
<td>Sep</td>
<td>Dec</td>
<td>Jun-Jun</td>
</tr>
<tr class="even">
<td>AVERAGE 1/</td>
<td>5.99</td>
<td>5.70</td>
<td>5.85</td>
<td>6.08</td>
<td>5.83</td>
<td>5.75</td>
<td></td>
<td></td>
<td>0.95%</td>
</tr>
<tr class="odd">
<td>Beijing</td>
<td>6.10</td>
<td>6.36</td>
<td>6.28</td>
<td>6.84</td>
<td>6.08</td>
<td>6.16</td>
<td></td>
<td></td>
<td>-3.14%</td>
</tr>
<tr class="even">
<td>Tianjin</td>
<td>5.70</td>
<td>5.93</td>
<td>6.07</td>
<td>6.37</td>
<td>6.03</td>
<td>5.94</td>
<td></td>
<td></td>
<td>0.17%</td>
</tr>
<tr class="odd">
<td>Hebei</td>
<td>5.10</td>
<td>5.36</td>
<td>5.55</td>
<td>5.82</td>
<td>5.54</td>
<td>5.44</td>
<td></td>
<td></td>
<td>1.49%</td>
</tr>
<tr class="even">
<td>Shanxi</td>
<td>5.48</td>
<td>5.47</td>
<td>5.77</td>
<td>6.13</td>
<td>5.60</td>
<td>5.18</td>
<td></td>
<td></td>
<td>-5.30%</td>
</tr>
<tr class="odd">
<td>Inner Mongolia</td>
<td>7.04</td>
<td>5.84</td>
<td>6.44</td>
<td>6.32</td>
<td>6.65</td>
<td>5.54</td>
<td></td>
<td></td>
<td>-5.14%</td>
</tr>
<tr class="even">
<td>Liaoning</td>
<td>5.28</td>
<td>5.30</td>
<td>5.77</td>
<td>5.79</td>
<td>5.35</td>
<td>5.60</td>
<td></td>
<td></td>
<td>5.66%</td>
</tr>
<tr class="odd">
<td>Jilin</td>
<td>5.21</td>
<td>5.34</td>
<td>5.95</td>
<td>6.10</td>
<td>5.82</td>
<td>5.84</td>
<td></td>
<td></td>
<td>9.36%</td>
</tr>
<tr class="even">
<td>Heilongjiang</td>
<td>6.20</td>
<td>5.45</td>
<td>5.66</td>
<td>6.14</td>
<td>5.45</td>
<td>5.34</td>
<td></td>
<td></td>
<td>-2.02%</td>
</tr>
<tr class="odd">
<td>Shanghai</td>
<td>6.63</td>
<td>6.45</td>
<td>6.30</td>
<td>6.65</td>
<td>6.43</td>
<td>6.88</td>
<td></td>
<td></td>
<td>6.67%</td>
</tr>
<tr class="even">
<td>Jiangsu</td>
<td>5.24</td>
<td>4.85</td>
<td>5.28</td>
<td>5.72</td>
<td>5.25</td>
<td>5.26</td>
<td></td>
<td></td>
<td>8.45%</td>
</tr>
<tr class="odd">
<td>Zhejiang</td>
<td>6.19</td>
<td>5.69</td>
<td>6.16</td>
<td>6.65</td>
<td>6.12</td>
<td>6.39</td>
<td></td>
<td></td>
<td>12.30%</td>
</tr>
<tr class="even">
<td>Anhui</td>
<td>5.86</td>
<td>5.08</td>
<td>5.92</td>
<td>6.15</td>
<td>5.85</td>
<td>5.64</td>
<td></td>
<td></td>
<td>11.02%</td>
</tr>
<tr class="odd">
<td>Fujian</td>
<td>6.55</td>
<td>6.22</td>
<td>6.49</td>
<td>7.03</td>
<td>6.71</td>
<td>6.19</td>
<td></td>
<td></td>
<td>-0.48%</td>
</tr>
<tr class="even">
<td>Jiangxi</td>
<td>6.09</td>
<td>5.42</td>
<td>5.92</td>
<td>6.28</td>
<td>6.19</td>
<td>6.23</td>
<td></td>
<td></td>
<td>14.94%</td>
</tr>
<tr class="odd">
<td>Shandong</td>
<td>5.26</td>
<td>5.27</td>
<td>5.56</td>
<td>5.80</td>
<td>5.38</td>
<td>5.73</td>
<td></td>
<td></td>
<td>8.73%</td>
</tr>
<tr class="even">
<td>Henan</td>
<td>5.12</td>
<td>5.04</td>
<td>5.36</td>
<td>5.74</td>
<td>5.38</td>
<td>5.50</td>
<td></td>
<td></td>
<td>9.13%</td>
</tr>
<tr class="odd">
<td>Hubei</td>
<td>5.54</td>
<td>4.97</td>
<td>5.57</td>
<td>6.06</td>
<td>5.74</td>
<td>5.61</td>
<td></td>
<td></td>
<td>12.88%</td>
</tr>
<tr class="even">
<td>Hunan</td>
<td>5.90</td>
<td>5.40</td>
<td>5.73</td>
<td>5.92</td>
<td>5.89</td>
<td>5.79</td>
<td></td>
<td></td>
<td>7.22%</td>
</tr>
<tr class="odd">
<td>Guangdong</td>
<td>6.89</td>
<td>6.68</td>
<td>6.67</td>
<td>6.99</td>
<td>7.18</td>
<td>7.11</td>
<td></td>
<td></td>
<td>6.44%</td>
</tr>
<tr class="even">
<td>Guangxi</td>
<td>5.72</td>
<td>5.64</td>
<td>5.56</td>
<td>5.76</td>
<td>5.75</td>
<td>5.78</td>
<td></td>
<td></td>
<td>2.48%</td>
</tr>
<tr class="odd">
<td>Hainan</td>
<td>7.38</td>
<td>7.00</td>
<td>7.09</td>
<td>7.40</td>
<td>7.00</td>
<td>6.85</td>
<td></td>
<td></td>
<td>-2.14%</td>
</tr>
<tr class="even">
<td>Sichuan</td>
<td>5.68</td>
<td>5.34</td>
<td>5.72</td>
<td>5.77</td>
<td>5.42</td>
<td>4.81</td>
<td></td>
<td></td>
<td>-9.93%</td>
</tr>
<tr class="odd">
<td>Guizhou</td>
<td>5.92</td>
<td>5.69</td>
<td>6.06</td>
<td>6.17</td>
<td>5.91</td>
<td>5.87</td>
<td></td>
<td></td>
<td>3.16%</td>
</tr>
<tr class="even">
<td>Yunan</td>
<td>5.61</td>
<td>5.57</td>
<td>5.84</td>
<td>5.90</td>
<td>5.54</td>
<td>5.41</td>
<td></td>
<td></td>
<td>-2.87%</td>
</tr>
<tr class="odd">
<td>Tibet</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td></td>
<td></td>
<td>N/a</td>
</tr>
<tr class="even">
<td>Shaanxi</td>
<td>6.00</td>
<td>5.45</td>
<td>5.80</td>
<td>5.73</td>
<td>5.60</td>
<td>5.00</td>
<td></td>
<td></td>
<td>-8.26%</td>
</tr>
<tr class="odd">
<td>Gansu</td>
<td>5.90</td>
<td>5.35</td>
<td>6.09</td>
<td>5.98</td>
<td>6.45</td>
<td>5.79</td>
<td></td>
<td></td>
<td>8.22%</td>
</tr>
<tr class="even">
<td>Qinghai</td>
<td>7.90</td>
<td>7.75</td>
<td>6.85</td>
<td>7.23</td>
<td>7.05</td>
<td>6.07</td>
<td></td>
<td></td>
<td>-21.68%</td>
</tr>
<tr class="odd">
<td>Ningxia</td>
<td>5.40</td>
<td>5.60</td>
<td>6.00</td>
<td>5.72</td>
<td>5.12</td>
<td>5.68</td>
<td></td>
<td></td>
<td>1.43%</td>
</tr>
<tr class="even">
<td>Xinjiang</td>
<td>7.22</td>
<td>6.40</td>
<td>n/a</td>
<td>6.76</td>
<td>6.46</td>
<td>6.46</td>
<td></td>
<td></td>
<td>0.94%</td>
</tr>
<tr class="odd">
<td>Chongqing</td>
<td>5.52</td>
<td>4.97</td>
<td>5.45</td>
<td>5.63</td>
<td>5.44</td>
<td>5.01</td>
<td></td>
<td></td>
<td>0.80%</td>
</tr>
<tr class="even">
<td colspan="10"><p>Source: The Ministry of Agriculture (MOA)</p>
<p>1/ The national average prices are based on all the counties selected
for sampling surveys.</p></td>
</tr>
</tbody>
</table>

<table>
<colgroup>
<col style="width: 20%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 15%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10">CHINA RETAIL PORK PRICES (RMB/KG, US$1=8.27)</td>
</tr>
<tr class="even">
<td></td>
<td>2002</td>
<td></td>
<td></td>
<td></td>
<td>2003</td>
<td></td>
<td></td>
<td></td>
<td>Change 02/03</td>
</tr>
<tr class="odd">
<td>Provinces</td>
<td>Mar</td>
<td>Jun</td>
<td>Sep</td>
<td>Dec</td>
<td>Mar</td>
<td>Jun</td>
<td>Sep</td>
<td>Dec</td>
<td>Mar-Mar</td>
</tr>
<tr class="even">
<td>NAT'L AVG 1/</td>
<td>10.33</td>
<td>9.97</td>
<td>10.11</td>
<td>10.26</td>
<td>10.04</td>
<td>9.86</td>
<td></td>
<td></td>
<td>-1.06%</td>
</tr>
<tr class="odd">
<td>Beijing</td>
<td>9.72</td>
<td>10.33</td>
<td>9.16</td>
<td>9.06</td>
<td>9.10</td>
<td>9.30</td>
<td></td>
<td></td>
<td>-9.97%</td>
</tr>
<tr class="even">
<td>Tianjin</td>
<td>11.85</td>
<td>10.33</td>
<td>10.67</td>
<td>11.00</td>
<td>10.75</td>
<td>10.63</td>
<td></td>
<td></td>
<td>2.90%</td>
</tr>
<tr class="odd">
<td>Hebei</td>
<td>9.04</td>
<td>9.11</td>
<td>9.96</td>
<td>9.95</td>
<td>9.71</td>
<td>9.81</td>
<td></td>
<td></td>
<td>7.68%</td>
</tr>
<tr class="even">
<td>Shanxi</td>
<td>9.51</td>
<td>8.90</td>
<td>9.77</td>
<td>9.95</td>
<td>9.45</td>
<td>9.02</td>
<td></td>
<td></td>
<td>1.35%</td>
</tr>
<tr class="odd">
<td>Inner Mongolia</td>
<td>10.11</td>
<td>9.34</td>
<td>9.91</td>
<td>10.60</td>
<td>10.50</td>
<td>9.45</td>
<td></td>
<td></td>
<td>1.18%</td>
</tr>
<tr class="even">
<td>Liaoning</td>
<td>9.55</td>
<td>9.62</td>
<td>9.87</td>
<td>10.14</td>
<td>9.51</td>
<td>9.69</td>
<td></td>
<td></td>
<td>0.73%</td>
</tr>
<tr class="odd">
<td>Jilin</td>
<td>10.04</td>
<td>9.30</td>
<td>10.15</td>
<td>10.30</td>
<td>9.78</td>
<td>9.53</td>
<td></td>
<td></td>
<td>2.47%</td>
</tr>
<tr class="even">
<td>Heilongjiang</td>
<td>10.00</td>
<td>8.83</td>
<td>9.16</td>
<td>9.91</td>
<td>8.80</td>
<td>8.83</td>
<td></td>
<td></td>
<td>0.00%</td>
</tr>
<tr class="odd">
<td>Shanghai</td>
<td>12.50</td>
<td>13.00</td>
<td>12.45</td>
<td>12.63</td>
<td>12.05</td>
<td>12.43</td>
<td></td>
<td></td>
<td>-4.38%</td>
</tr>
<tr class="even">
<td>Jiangsu</td>
<td>10.18</td>
<td>9.84</td>
<td>10.23</td>
<td>10.13</td>
<td>9.96</td>
<td>19.40</td>
<td></td>
<td></td>
<td>97.15%</td>
</tr>
<tr class="odd">
<td>Zhejiang</td>
<td>10.51</td>
<td>9.76</td>
<td>10.34</td>
<td>10.76</td>
<td>10.05</td>
<td>10.42</td>
<td></td>
<td></td>
<td>6.76%</td>
</tr>
<tr class="even">
<td>Anhui</td>
<td>11.11</td>
<td>9.93</td>
<td>10.48</td>
<td>10.49</td>
<td>10.29</td>
<td>10.17</td>
<td></td>
<td></td>
<td>2.42%</td>
</tr>
<tr class="odd">
<td>Fujian</td>
<td>10.11</td>
<td>10.07</td>
<td>10.00</td>
<td>10.99</td>
<td>10.62</td>
<td>10.61</td>
<td></td>
<td></td>
<td>5.36%</td>
</tr>
<tr class="even">
<td>Jiangxi</td>
<td>10.23</td>
<td>9.97</td>
<td>10.11</td>
<td>10.18</td>
<td>10.29</td>
<td>10.33</td>
<td></td>
<td></td>
<td>3.61%</td>
</tr>
<tr class="odd">
<td>Shandong</td>
<td>9.86</td>
<td>9.79</td>
<td>10.26</td>
<td>10.24</td>
<td>10.09</td>
<td>9.92</td>
<td></td>
<td></td>
<td>1.33%</td>
</tr>
<tr class="even">
<td>Henan</td>
<td>9.32</td>
<td>9.02</td>
<td>9.57</td>
<td>9.66</td>
<td>9.48</td>
<td>9.34</td>
<td></td>
<td></td>
<td>3.55%</td>
</tr>
<tr class="odd">
<td>Hubei</td>
<td>11.19</td>
<td>10.41</td>
<td>10.74</td>
<td>10.77</td>
<td>10.66</td>
<td>10.67</td>
<td></td>
<td></td>
<td>2.50%</td>
</tr>
<tr class="even">
<td>Hunan</td>
<td>10.26</td>
<td>9.53</td>
<td>10.15</td>
<td>9.88</td>
<td>9.89</td>
<td>10.08</td>
<td></td>
<td></td>
<td>5.77%</td>
</tr>
<tr class="odd">
<td>Guangdong</td>
<td>11.58</td>
<td>11.14</td>
<td>11.06</td>
<td>11.02</td>
<td>11.81</td>
<td>11.51</td>
<td></td>
<td></td>
<td>3.32%</td>
</tr>
<tr class="even">
<td>Guangxi</td>
<td>10.78</td>
<td>9.81</td>
<td>10.56</td>
<td>10.33</td>
<td>10.75</td>
<td>10.56</td>
<td></td>
<td></td>
<td>7.65%</td>
</tr>
<tr class="odd">
<td>Hainan</td>
<td>9.50</td>
<td>9.50</td>
<td>10.75</td>
<td>9.75</td>
<td>9.00</td>
<td>9.25</td>
<td></td>
<td></td>
<td>-2.63%</td>
</tr>
<tr class="even">
<td>Sichuan</td>
<td>10.29</td>
<td>9.61</td>
<td>9.96</td>
<td>10.04</td>
<td>9.81</td>
<td>9.31</td>
<td></td>
<td></td>
<td>-3.12%</td>
</tr>
<tr class="odd">
<td>Guizhou</td>
<td>9.68</td>
<td>9.38</td>
<td>10.12</td>
<td>10.18</td>
<td>9.74</td>
<td>9.56</td>
<td></td>
<td></td>
<td>1.92%</td>
</tr>
<tr class="even">
<td>Yunan</td>
<td>9.74</td>
<td>9.66</td>
<td>9.94</td>
<td>9.96</td>
<td>9.86</td>
<td>9.35</td>
<td></td>
<td></td>
<td>-3.21%</td>
</tr>
<tr class="odd">
<td>Tibet</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td></td>
<td></td>
<td>N/a</td>
</tr>
<tr class="even">
<td>Shaanxi</td>
<td>9.95</td>
<td>9.00</td>
<td>10.53</td>
<td>9.07</td>
<td>9.00</td>
<td>8.00</td>
<td></td>
<td></td>
<td>-11.11%</td>
</tr>
<tr class="odd">
<td>Gansu</td>
<td>9.96</td>
<td>9.41</td>
<td>9.94</td>
<td>9.89</td>
<td>9.40</td>
<td>8.85</td>
<td></td>
<td></td>
<td>-5.95%</td>
</tr>
<tr class="even">
<td>Qinghai</td>
<td>11.75</td>
<td>10.75</td>
<td>11.25</td>
<td>11.20</td>
<td>11.63</td>
<td>10.10</td>
<td></td>
<td></td>
<td>-6.05%</td>
</tr>
<tr class="odd">
<td>Ningxia</td>
<td>7.50</td>
<td>11.50</td>
<td>6.00</td>
<td>10.16</td>
<td>8.00</td>
<td>8.04</td>
<td></td>
<td></td>
<td>-30.09%</td>
</tr>
<tr class="even">
<td>Xinjiang</td>
<td>13.60</td>
<td>12.21</td>
<td>n/a</td>
<td>12.36</td>
<td>11.25</td>
<td>10.36</td>
<td></td>
<td></td>
<td>-15.15%</td>
</tr>
<tr class="odd">
<td>Chongqing</td>
<td>10.33</td>
<td>9.91</td>
<td>10.31</td>
<td>10.41</td>
<td>9.70</td>
<td>9.56</td>
<td></td>
<td></td>
<td>-3.53%</td>
</tr>
<tr class="even">
<td colspan="10"><p>Source: The Ministry of Agriculture (MOA)</p>
<p>1/ The national average prices are based on all the counties selected
for sampling surveys.</p></td>
</tr>
</tbody>
</table>

<table style="width:100%;">
<colgroup>
<col style="width: 20%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 18%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10">CHINA RETAIL PIGLET PRICES (RMB/KG, US$1=8.27)</td>
</tr>
<tr class="even">
<td></td>
<td>2002</td>
<td></td>
<td></td>
<td></td>
<td>2003</td>
<td></td>
<td></td>
<td></td>
<td>% Change 02/03</td>
</tr>
<tr class="odd">
<td>PROVINCES</td>
<td>Mar</td>
<td>Jun</td>
<td>Sep</td>
<td>Dec</td>
<td>Mar</td>
<td>Jun</td>
<td>Sep</td>
<td>Dec</td>
<td>Mar-Mar</td>
</tr>
<tr class="even">
<td>AVERAGE 1/</td>
<td>8.95</td>
<td>8.04</td>
<td>7.73</td>
<td>7.69</td>
<td>7.96</td>
<td>7.76</td>
<td></td>
<td></td>
<td>-3.50%</td>
</tr>
<tr class="odd">
<td>Beijing</td>
<td>8.64</td>
<td>9.76</td>
<td>9.68</td>
<td>9.12</td>
<td>9.51</td>
<td>9.26</td>
<td></td>
<td></td>
<td>-5.12%</td>
</tr>
<tr class="even">
<td>Tianjin</td>
<td>7.67</td>
<td>7.57</td>
<td>7.83</td>
<td>7.00</td>
<td>7.60</td>
<td>8.35</td>
<td></td>
<td></td>
<td>10.30%</td>
</tr>
<tr class="odd">
<td>Hebei</td>
<td>6.65</td>
<td>6.54</td>
<td>6.78</td>
<td>6.23</td>
<td>7.08</td>
<td>6.93</td>
<td></td>
<td></td>
<td>5.96%</td>
</tr>
<tr class="even">
<td>Shanxi</td>
<td>10.04</td>
<td>9.50</td>
<td>8.91</td>
<td>9.13</td>
<td>9.21</td>
<td>10.04</td>
<td></td>
<td></td>
<td>5.68%</td>
</tr>
<tr class="odd">
<td>Inner Mongolia</td>
<td>14.87</td>
<td>11.72</td>
<td>12.31</td>
<td>11.40</td>
<td>17.75</td>
<td>13.53</td>
<td></td>
<td></td>
<td>15.44%</td>
</tr>
<tr class="even">
<td>Liaoning</td>
<td>8.37</td>
<td>8.65</td>
<td>9.69</td>
<td>8.06</td>
<td>9.24</td>
<td>8.87</td>
<td></td>
<td></td>
<td>2.54%</td>
</tr>
<tr class="odd">
<td>Jilin</td>
<td>9.12</td>
<td>8.26</td>
<td>9.04</td>
<td>8.04</td>
<td>9.88</td>
<td>9.04</td>
<td></td>
<td></td>
<td>9.44%</td>
</tr>
<tr class="even">
<td>Heilongjiang</td>
<td>7.60</td>
<td>8.80</td>
<td>9.36</td>
<td>9.07</td>
<td>9.09</td>
<td>8.42</td>
<td></td>
<td></td>
<td>-4.32%</td>
</tr>
<tr class="odd">
<td>Shanghai</td>
<td>8.35</td>
<td>8.03</td>
<td>7.63</td>
<td>8.28</td>
<td>8.50</td>
<td>9.20</td>
<td></td>
<td></td>
<td>14.57%</td>
</tr>
<tr class="even">
<td>Jiangsu</td>
<td>6.25</td>
<td>4.63</td>
<td>5.14</td>
<td>5.46</td>
<td>5.15</td>
<td>4.96</td>
<td></td>
<td></td>
<td>7.13%</td>
</tr>
<tr class="odd">
<td>Zhejiang</td>
<td>6.71</td>
<td>6.13</td>
<td>6.33</td>
<td>6.38</td>
<td>6.51</td>
<td>7.14</td>
<td></td>
<td></td>
<td>16.48%</td>
</tr>
<tr class="even">
<td>Anhui</td>
<td>7.34</td>
<td>5.29</td>
<td>6.03</td>
<td>8.01</td>
<td>6.65</td>
<td>6.43</td>
<td></td>
<td></td>
<td>21.55%</td>
</tr>
<tr class="odd">
<td>Fujian</td>
<td>8.41</td>
<td>6.44</td>
<td>8.39</td>
<td>8.49</td>
<td>7.31</td>
<td>7.95</td>
<td></td>
<td></td>
<td>23.45%</td>
</tr>
<tr class="even">
<td>Jiangxi</td>
<td>7.39</td>
<td>6.08</td>
<td>6.82</td>
<td>6.68</td>
<td>7.32</td>
<td>8.06</td>
<td></td>
<td></td>
<td>32.57%</td>
</tr>
<tr class="odd">
<td>Shandong</td>
<td>5.85</td>
<td>5.35</td>
<td>5.65</td>
<td>5.49</td>
<td>5.43</td>
<td>5.84</td>
<td></td>
<td></td>
<td>9.16%</td>
</tr>
<tr class="even">
<td>Henan</td>
<td>6.75</td>
<td>6.35</td>
<td>7.14</td>
<td>7.50</td>
<td>6.78</td>
<td>6.78</td>
<td></td>
<td></td>
<td>6.77%</td>
</tr>
<tr class="odd">
<td>Hubei</td>
<td>10.73</td>
<td>7.72</td>
<td>7.36</td>
<td>7.87</td>
<td>8.55</td>
<td>7.56</td>
<td></td>
<td></td>
<td>-2.07%</td>
</tr>
<tr class="even">
<td>Hunan</td>
<td>8.27</td>
<td>7.32</td>
<td>7.78</td>
<td>7.02</td>
<td>7.79</td>
<td>7.52</td>
<td></td>
<td></td>
<td>2.73%</td>
</tr>
<tr class="odd">
<td>Guangdong</td>
<td>8.10</td>
<td>7.46</td>
<td>7.79</td>
<td>8.15</td>
<td>8.39</td>
<td>8.45</td>
<td></td>
<td></td>
<td>13.27%</td>
</tr>
<tr class="even">
<td>Guangxi</td>
<td>5.96</td>
<td>5.62</td>
<td>6.18</td>
<td>5.72</td>
<td>5.95</td>
<td>6.71</td>
<td></td>
<td></td>
<td>19.40%</td>
</tr>
<tr class="odd">
<td>Hainan</td>
<td>8.60</td>
<td>8.93</td>
<td>9.05</td>
<td>8.78</td>
<td>6.73</td>
<td>8.70</td>
<td></td>
<td></td>
<td>-2.58%</td>
</tr>
<tr class="even">
<td>Sichuan</td>
<td>7.81</td>
<td>7.34</td>
<td>7.44</td>
<td>7.27</td>
<td>7.08</td>
<td>6.06</td>
<td></td>
<td></td>
<td>-17.44%</td>
</tr>
<tr class="odd">
<td>Guizhou</td>
<td>7.64</td>
<td>7.11</td>
<td>7.43</td>
<td>7.45</td>
<td>7.61</td>
<td>6.80</td>
<td></td>
<td></td>
<td>-4.36%</td>
</tr>
<tr class="even">
<td>Yunan</td>
<td>8.33</td>
<td>8.34</td>
<td>8.41</td>
<td>8.79</td>
<td>8.66</td>
<td>7.92</td>
<td></td>
<td></td>
<td>-5.04%</td>
</tr>
<tr class="odd">
<td>Tibet</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td>n/a</td>
<td></td>
<td></td>
<td>n/a</td>
</tr>
<tr class="even">
<td>Shaanxi</td>
<td>10.87</td>
<td>11.07</td>
<td>8.00</td>
<td>8.87</td>
<td>10.00</td>
<td>3.20</td>
<td></td>
<td></td>
<td>-71.09%</td>
</tr>
<tr class="odd">
<td>Gansu</td>
<td>13.08</td>
<td>11.59</td>
<td>10.65</td>
<td>10.39</td>
<td>10.98</td>
<td>10.56</td>
<td></td>
<td></td>
<td>-8.89%</td>
</tr>
<tr class="even">
<td>Qinghai</td>
<td>14.75</td>
<td>12.25</td>
<td>10.77</td>
<td>9.80</td>
<td>12.20</td>
<td>11.08</td>
<td></td>
<td></td>
<td>-9.55%</td>
</tr>
<tr class="odd">
<td>Ningxia</td>
<td>13.50</td>
<td>10.00</td>
<td>15.00</td>
<td>8.00</td>
<td>8.12</td>
<td>8.50</td>
<td></td>
<td></td>
<td>-15.00%</td>
</tr>
<tr class="even">
<td>Xinjiang</td>
<td>12.50</td>
<td>10.57</td>
<td>n/a</td>
<td>11.36</td>
<td>11.60</td>
<td>10.64</td>
<td></td>
<td></td>
<td>0.66%</td>
</tr>
<tr class="odd">
<td>Chongqing</td>
<td>8.34</td>
<td>6.83</td>
<td>7.27</td>
<td>7.71</td>
<td>7.54</td>
<td>5.39</td>
<td></td>
<td></td>
<td>-21.08%</td>
</tr>
<tr class="even">
<td colspan="10"><p>Source: The Ministry of Agriculture (MOA)</p>
<p>1/ The national average prices are based on all the counties selected
for sampling surveys.</p></td>
</tr>
</tbody>
</table>

  ------------------------------ ----------- --------- ------- -------- -----------
  Tariffs on Hogs and Pork,                                             
  Effective January 1, 2003                                             

                                                                        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%       13.6%   13%      28.4%

  other                          0203.2190                              

  hams, shoulders and cuts       0203.2200                              
  thereof, with bones                                                   

                                 0203.2900                              

                                                                        

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

+--------------+---------+---------+---------+---------+-----------+
| #######      |         |         |         |         |           |
|  Tariffs on  |         |         |         |         |           |
| Pork Offal E |         |         |         |         |           |
| ffective Jan |         |         |         |         |           |
| uary 1, 2003 |         |         |         |         |           |
+--------------+---------+---------+---------+---------+-----------+
|              |         |         |         |         | Effective |
+--------------+---------+---------+---------+---------+-----------+
|              |         | General | MFN     | V.A.T.  | Rate      |
+--------------+---------+---------+---------+---------+-----------+
|              |         |         |         |         | (mfn+vat) |
+--------------+---------+---------+---------+---------+-----------+
|              |         |         |         |         |           |
+--------------+---------+---------+---------+---------+-----------+
| Pork Offal   | 02      | 70%     | 20.0%   | 13%     | 35.6%     |
|              | 06.3000 |         |         |         |           |
+--------------+---------+---------+---------+---------+-----------+
|              | 02      | 70%     | 20.0%   | 13%     | 35.6%     |
|              | 06.4100 |         |         |         |           |
+--------------+---------+---------+---------+---------+-----------+
|              | 02      | 70%     | 13.6%   | 13%     | 28.4%     |
|              | 06.4900 |         |         |         |           |
+--------------+---------+---------+---------+---------+-----------+
| #####        |         |         |         |         |           |
| ## Source: C |         |         |         |         |           |
| hina Customs |         |         |         |         |           |
+--------------+---------+---------+---------+---------+-----------+