China Plans to Nationalize Wholesale Agriculture Markets

Published: 2008-11-13

News, page 3 issue 393 November 10, 2008
Original article:

China's Ministry of Commerce was planning to nationalize the country's 4,300 wholesale agricultural markets, partly in response to food safety incidents that hurt Chinese exports in October.

Most of these markets were run by private companies, and some 70% of agricultural products in China were traded there.

At a trade fair news conference in early November, Jiang Zengwei, vice-minister at the Ministry of Commerce, said the Ministry hoped to strenghthen and regulate the industry by means of establishing large-scale agricultural product logistics businesses.

Wang Jing, vice-president of the China National Agricultural Wholesale Market Association, said that his group would work to integrate both small and large wholesale markets and "turn them into a public utility", adding that wholesale markets in both developed and developing countries were mostly state-owned.

The numerous small and scattered markets have long posed a challenge to safety and sanitation inspections.In October, food safety incidents involving tainted milk, eggs and maggot-infested oranges hurt China's agricultural exports.

The Ministry hoped to get China's agricultural products up to international standards and increase exports by means of market integration.

Shanghai, Hangzhou and Nanjing were moving forward with pilot projects of the reform. Hangzhou's new wholesale center has already opened its doors.

Local government there established a new wholesale center coving an area of nearly 500 acres in one of the city's suburbs, which would house all wholesalers in the cities previous 43 markets. The owners of the previous private wholesale markets would be able to hold shares in the new wholesale center.

Wang Jing predicted that the present 4,300 wholesale markets would be trimmed down to several hundred.

Hong Tao, the Ministry's market operations specialist, expressed his objection to nationalizing the industry as there were insufficient funds to invest in the sector.

He said that wholesale agricultural product markets should abide by basic market principles, but that government could make necessary planning and regulation, like tightening the approval process for building new wholesale markets. In addition, the government could become a shareholder in wholesale markets, but should refrain from intervening in its normal operation.