African Swine Fever

African Swine Fever

Just Another Animal Disease or the Biggest Economic Concern China Faces Today?

11/2019  | Reading time: 8 minutes

Falling stocks, sky-high pork prices, discontent amongst Chinese citizens—all because of a deadly virus attacking pigs in China. The Chinese economy has already been suffering from various problems, but the list just seems to keep growing. With its trade war against the US and its slowing economic growth, China has already had a lot on its plate, but, now, even the African swine fever, which is endangering its swine population, is taking a toll on its economy and the well-being of its population. Unusual measures such as releasing emergency pork supplies and raising giant polar bear–sized pigs are implemented, but can they solve the erupted crisis?

The African swine fever is a virus that originated in East Africa; the first case in East Asia was reported in China last August. The virus is deadly for pigs but not dangerous for humans, so the main concern is not the health of the population but rather the restricted access to pork products, which results from the huge destruction the disease has so far caused to China.

Since August 2018, when it was first detected in a north-eastern city, Shenyang, the virus has spread to almost all provinces of China. To date, about 40% of the country’s pig supply is gone, and the toll is estimated to reach 50% by the end of the year. There is no evidence on how and when exactly the disease came, but some suppose that it could have crossed the border through either smuggling or regular trade with the EU or Russia. Finding out how the virus appeared in China is crucial so the government can take steps to stop it from spreading, but there have been no conclusive results in the investigation yet.

Chinese people have been consuming pork as part of their everyday diet since 1978, the start of Deng Xiaoping’s economic reforms. Until then, pork was considered more of a treat on rare occasions than a regularly consumed staple in the rural areas, and even urban citizens only received a small ration once per month. But, today, pork symbolises prosperity, affluence, and financial stability and is a part of everyday life. China is the biggest pork consumer and pig farmer worldwide: according to OECD data, in 2018, the Chinese consumed 30.4 kilograms of pork per capita, around half of the global consumption, and raised 440.6 million pigs based on figures from Statista. These quantities rank them number one in the world’s pork production.

Considering the destruction the fever caused in the pork industry, it came as little surprise that prices rose sky-high—but even experts did not expect the prices to double. Now, one kilogramme of pork costs about CNY 30-33, and it seems far from peaking—not only are the prices not expected to stop rising, but, according to economists, they might double again by the beginning of 2020. Residents are concerned, all the more because pork plays a central role in the traditional new year feast during the Lunar New Year. As a result of the high prices, stocks are falling, the consumer price index (CPI) is growing, and, in 2020, the inflation could average out to 3.5%, with the highest rate possibly reaching 4%. The government’s set annual average inflation target of 3% has already been reached this year in September, with a 3% increase in the CPI compared to September last year. As the price of pork keeps growing, Chinese are searching for alternatives to their favourite meat, which leads to a growth of overall consumer prices, including chicken, beef, and lamb.

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Pork prices are on a steady rise in China
Source: B.Zhou/Shutterstock

Other than rising prices and slumping consumption, the fever is also affecting how China’s trade war with the US plays out. China’s tariffs on American pork went up to 72% after the US had imposed tariffs on Chinese products, which resulted in an almost 30% decline in US pork exports from 2017 to 2018. Tariffs are making it very expensive for US pork producers to export, even if, as the second-biggest pork-producing country, they could definitely help China fight shortages. Now, the question is whether China considers the problem big enough to lower tariffs on US pork imports. There are already some signs suggesting that China might be considering this option, as certain Chinese companies are allowed to import pork without paying the tariffs. In any case, US pork producers expect to export more to China in 2020 because the demand for pork products is likely to grow.

It is clear that there is a shortage of pork on the market, but how grave is the situation? The actual shortfall of swine is expected to be around 10 million tons by the first half of 2020, according to Hu Chunhua, the Vice Premier of the People’s Republic of China. The shortage China will presumably face is bigger than what could be imported, so Beijing needs to find other solutions to resuscitate production within the country. However, governmental efforts to deal with the crisis have so far not satisfied the population’s expectations. And the dissatisfied are many. Small-scale farmers had their businesses shut down three years ago, when policies urging the demolition of small-scale farms were implemented to encourage large-scale businesses. Now, although the policy has been withdrawn, these people can no longer afford to get back into the industry. Other than trying to get smaller farms to work again, large-scale pig producers are getting subsidies, and restrictions on them are being lifted in order to increase production. Beijing has also released some of its emergency meat supply from central reserves to the market: by September this year, 20,000 tons of pork was released along with 2,400 tons of beef and 1,900 tons of mutton, but this amount still falls short of what is needed to stabilise prices and fix the crisis.

Attempts at fighting the shortfall have been initiated by not only the government but also farmers: raising pigs to be as big as possible has been the aim of both small and large farms in the virus-affected regions to maximise profits. On small farms, the average hog is usually around 125 kilogrammes; however, farmers are aiming for 175-200 kilogrammes now, whereas, on large-scale farms, the average size has risen by about 30 kilogrammes, starting from the usual 110 kilogrammes up to 140 kilogrammes now. A rather extreme example of the “bigger, the better” idea is a local farmer in Guangxi Zhuang, Pang Cong, who started to breed not only big but giant pigs. These animals weigh more than the average-sized male polar bear, and the biggest specimen is as heavy as 500 kilogrammes.

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Small-scale pig farming outside Beijing
Source: Flickr, author: ILRI, licence: CC BY-NC-SA 2.0

There have been achievements according to Vice Minister of Agriculture, Yu Kangzhen, who said that the outbreaks of fever cases had been decreasing, and, therefore, blockades in 105 affected areas had been lifted. However, some industry figures are concerned about local authorities covering up cases of fever outbreaks in order to avoid spreading panic and prevent creating a black market for smuggled pigs. Concerns do not stop here, however: Mongolia, Vietnam, and North Korea have also detected outbreaks in their territories while South Korea is implementing bans on feeding food waste to animals and does blood tests on pigs before letting livestock into the country for prevention. Myanmar, Philippines, and Laos could be the next: their lack of effective measures for controlling the cross-border movement of pigs makes them prone to outbreaks. Australia also fears that the virus might cross its borders, so a new rule has been implemented: visitors’ visas can now be shortened and even cancelled for biosecurity reasons. Australia’s concerns were proven right, as, from February to September, the contamination rate tripled, increasing from 15% to an alarming 48%.

For now, it is clear that this problem does not only affect China, as many other countries struggle with the virus and its consequences. Whether China could solve the crisis within its borders or the process will last a longer while is an open question. Until a sure way of containment and an effective measure that stops the spreading of the virus is not introduced, the threat of this disease will stay. Fortunately, scientific progress is promising. Recently, a vaccine has been discovered that immunises wild boars against the virus. Immunity can be passed on from animal to animal through contact; however, further research is still necessary to examine how exactly this happens. Nonetheless, the spreading of the virus is very fast, so, for now, there is uncertainty around how the crisis will play out.

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