JD.com to Buy $2 Billion American Goods in 3 years
JD.com pledged to purchase $2 billion worth of American goods during the next three years, including $1.2 billion of American beef and pork, the company said on November 8.
It signed a $1.2 billion beef purchase agreement with Montana Stock Growers Association (MSGA) and signed a pork purchase agreement with Smithfield Foods. The remainder of the $2 billion involves various other American goods during the next three years.
SEE ALSO: JD.com’s Joint Venture Opens Two-Way Trade Between China, Southeast Asia
China, after banning US-origin beef and beef products in 2003, chose to reopen the Chinese market to American meet products in June, as part of the Initial Actions of the 100-Day Plan for US-China Economic Cooperation announced on May 11.
After banning imports of American beef, China increased imports from Australia, New Zealand, Uruguay, Brazil, Argentina and Canada. From 1997 to 2014, the seven countries above accounted for more than 95 percent of China’s beef imports. China’s opening to US beef imports will make the beef market more competitive.
In recent years, demand for beef in the Chinese market has been on the rise. In 2016 alone, beef imports totaled 580,000 tons, up 22.4 percent year on year and valued 16.6 billion yuan, according to the major goods value table released by the Customs General Administration. A report by the US Department of Agriculture in March found China’s total beef consumption in 2017 was expected to surpass that of the European Union, having overtaken Brazil in 2016. China’s demand for beef will account for 13.28 percent of the global demand. The EU and Brazil will be 13.26 percent and 12.77 percent of world’s total respectively. The US remains the top, accounting for 20 percent of world’s total consumption. China’s per capita consumption was 5.6 kilograms in 2016, underperforming other markets.