Business

China cuts pork tariffs

Soaring prices make it tougher to bring home the bacon

A customer buys pork at a market in Beijing. (Associated Press)
A customer buys pork at a market in Beijing. (Associated Press)
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BEIJING — It has caused soaring inflation rates, spurred organized crime and forced authorities to unlock strategic reserves.

The pork shortage is a very big deal in China.

As the country heads into a crucial holiday period, the government is escalating its fight against one of its most vexing domestic challenges by slashing tariffs on pork to stoke imports, ease prices, and potentially forestall grumbles from working-class consumers.

The tariff cuts, announced Monday, are the latest in a package of measures unveiled by various ministries after the country’s hog population was devastated this year by an outbreak of African swine fever.

The disease is highly contagious and often fatal for pigs but does not affect humans. There currently is no vaccine.

The tariff drop comes days after the Commerce Ministry said it would release an additional 40,000 tons of the meat from the nation’s strategic pork reserves to keep prices steady.

China in November recorded its biggest consumer inflation jump since 2012 after pork prices more than doubled from a year earlier due to a shortage of the meat.

Pork is a staple food for many Chinese households.

That, in turn, has led to sticker shock spreading beyond the pork aisle in Chinese markets. Consumers are paying 11 percent to 25 percent more for other sources of protein, such as beef, chicken and eggs, according to China’s National Bureau of Statistics, at a time when the economy is slowing.

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Top officials say they want to keep prices in check before the Lunar New Year holiday week in late January, when many Chinese families gather to fold pork dumplings and consume braised pork belly and soups with pork meatballs.

Wen Tiejun, an expert in macroeconomics and sustainability at Renmin University in Beijing, said Chinese experts are trying to figure out why prices have been skyrocketing as much as they have.

“Pork prices are rising too fast,” Wen said. “I’m afraid it’s not even a simple relationship of supply and demand, insufficient production or the epidemic.”

The pork dilemma has spiraled to the point that domestic prices may be distorted by pork speculators, Wen said.

He added that Chinese consumers — who eat half the world’s pork — may substitute pork for other meat if prices stay high by the Lunar New Year.

Since summer, Chinese leaders have summoned all hands to tame pork prices. Economic planning authorities promised land permits, loans and subsidies to pig farmers to stoke production. The transport ministry doled out free toll passes for trucks carrying pigs.

Even at the height of trade tensions with the United States, the Commerce Ministry exempted American pork from import tariffs.

As part of the deal announced this month, Chinese officials have promised “significant transactions” with U.S. hog farmers.

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More than a quarter of U.S.-bred hogs are exported — Iowa is No. 1 — and China is a major purchaser.

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