Urban issues
Demand for food quantity and quality in China
China’s rich don’t want more food, they want better food
Authors:
F. Gale; K. Huang
Publisher:
Economic Research Service, USDA, 2007
Why has China’s surging income growth not pushed its demand for food beyond domestic production capacity?This study assesses changes in food demand in China.Essentially it reveals that as household incomes rise, consumers demand not only a greater quantity of food, but also food with a higher quality. Some of the key findings include:
- a large proportion of China’s personal income growth is spent on greater value-added in food processing and marketing rather than increased quantity
- this demand for quality is a factor driving the rapid growth in the retail food sector
- high-income households purchase greater value added, or better quality, rather than higher quantity
- rural and low-income urban households are still at income levels where they demand increased quantities of many foods as their income rises.
The growing segmentation of the Chinese food market raises several concerns and policy issues, including
- potential social instability arising from mounting food prices
- increases in food imports due to high-income consumers’ willingness to pay for premium foods
- increased awareness of food safety, and new marketing opportunities as the demand for quality expands
- adverse social and economic effect of increasing food prices on low-income urban consumers.
