2019 Agricultural Politics and Trade War 05 "is not about Politics: what kind of Market is Hong Kong?

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On March 11, 2011, the deadliest earthquake in the history of East Japan caused a major nuclear pollution incident caused by the explosion at the Fukushima nuclear power plant; the first to bear the brunt was "whether Japanese agricultural products have been contaminated by radiation". At that time, countries also issued bans on the import of agricultural products around Fukushima. Under such an "opportunity", Goldman Sachs, the largest supplier of fruits and vegetables in Hong Kong, came to Taiwan to purchase fresh agricultural products in order to make up for the gap in the original Japanese market, which is an important origin for the export of fresh fruits and vegetables from Taiwan to Hong Kong.

This does not mean that before this, the quantity of agricultural products exported from Taiwan to Hong Kong was zero, but it is necessary to explore why the trade is still a flash in the pan when there is no political pressure and is based entirely on market supply and demand. It is a pity that the Hong Kong market has not become an important beachhead stronghold for overseas sales of fresh vegetables and fruits in Taiwan.

Compared with the "trade exchanges" of Chinese mainland's policy procurement of agricultural products from Taiwan, not only because of the inherent advantage of Hong Kong as a free trade port, but also because of its lack of agricultural autonomy, Taiwan should really make good use of Hong Kong, a market with a population of more than 7 million.

Photo credit: pablocba Vista desde Victoria Peak, Hong Kong. Via photopin (license)

With regard to the positioning of Taiwan's products, the price is not as good as that in Southeast Asia and the quality can not catch up with that of Japan.

Hong Kong Island, which is narrow and densely populated, together with Kowloon and the New Territories, has an area the size of four Taipei cities, but the main economic activities are on Hong Kong Island and Kowloon, with at least 500 supermarkets and large supermarkets. Among them, there are supermarkets that meet high-end customers and general specifications; there are chains run by Hong Kong people and foreign investors. In order to break into the supermarket channel in Hong Kong, the first problem encountered by Taiwan's fresh agricultural products is "product positioning."

The biggest embarrassment of fresh fruits and vegetables in Taiwan is that "the price is higher than that of others, but the quality is not necessarily better than others." especially in the international city of Hong Kong, where agricultural products from all over the world are sent here, coupled with the grand Hong Kong fruit exhibition held every autumn, the people of Hong Kong are not only sharp-mouthed, but every penny has to be spent on the edge of the knife for budget-conscious Hong Kong government residents. Fruit is not delicious, cheap is useless; fruit is expensive and not delicious, let alone can be sold!

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Thoughts on "non-export production-oriented" non-strategic varieties of fruits in Taiwan

Although Taiwan, which is located in the subtropics, has fruits ranging from tropical fruits in Pingtung to cold fruits in Lishan in Taichung, compared with those in Southeast Asia, our fruit export prices are sky-high; compared with the quality of cold fruits, or even subtropical fruits, we don't have to compete with Japan.

It is not that our farmers are not good enough, but that many of our fruits are "not suitable for export", nor are they supplied by "professional export production zones". This is a congenital test that can be drawn immediately from the experience of Hong Kong, that is, where is the "strategic" fresh agricultural product suitable for export?

If you sell to the Hong Kong market, you have to face international competition.

The Hong Kong market is very realistic. You have to face international competition, not just compare with yourself. We can be proud of our fruit kingdom, and we can also tell how much foreign exchange bananas, pineapples and asparagus have earned for Taiwan in the last century, but after all, this is a thing of the past. In the face of an open and free competitive market like Hong Kong, Das Kapital is good fruit and good goods as long as it can make money for passers-by and importers.

We boast about how delicious our grapes are, but we are sorry that we cannot make money when the grapes are exported to Hong Kong. Our organic fruits and vegetables are sold so much in Taiwan, but we are sorry that the Hong Kong market will not accept products with such high unit prices.

If you want to help the buyer make money, you can make money yourself.

During the years when the export of Japanese agricultural products was banned, Taiwan's fresh fruits and vegetables did have a good time in the passageway of Hong Kong supermarkets: Lotus, red heart guava, honey dates, red meat watermelons, sweet melons, grapefruit, grapes, Sakya, sweet persimmons, lettuce, cabbage, organic eggs, as you can imagine, Hong Kong traders have transferred orders to Taiwan because of the "shortage of Japanese goods." But soon, Taiwan exporters began to cut prices and compete for orders, coupled with the lifting of export bans on Japanese agricultural products one after another, and Taiwan's fresh fruits and vegetables fell back to the origin like a flood.

Nowadays, populist slogans such as "goods go out and people come in and make a fortune" are loudly shouted, but think carefully: before you want to make money for other people, do you want others to make money, too? In particular, in matters such as trade, there is no reason for me to earn and you to lose. From the examples of the Hong Kong market, we can see that "helping buyers find a mode / commodity that can make money" is the fundamental logic of the operation of capitalism. How to "build your own foundation" to compete in the international market is not only the king of business success or failure, but also the skillful door of whether agriculture / agricultural products can go out.

Series of readings: 2019 series of readings on agricultural politics and trade wars

(series description: the melting ice between the two sides of the "Lianhu Society" in 2005 created an upsurge in fruit sales in Taiwan, and the ups and downs of political procurement had many effects on Taiwan's agriculture. How will Taiwan respond to the resumption of China's agricultural political and trade war against Taiwan in 2019? "upstream and downstream" invites experts to analyze, and the special topic will continue to be published)

In 107, the daily sales of vegetables and fruits of agricultural products in China increased by 49%, and the Council of Agriculture entered the Tokyo International Food Fair in 108 to grab orders for food materials from the East Olympic Games.

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