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Economy

China's swine fever reaches Beijing, in threat to economy

Trade war exacerbates disease's impact on world's biggest pork market

African swine fever has hit the Chinese pork industry just as it tries to make up for high tariffs on American imports of the meat.
African swine fever has struck China just as the country's pork industry tries to compensate for high tariffs on American imports of the meat.   © Reuters

DALIAN, China -- The Chinese outbreak of African swine fever has reached 20 provinces and cities including Beijing and the inland metropolis of Chongqing, combining with the trade war to threaten both the economy and the dinner table in the world's biggest pork market.

The disease's presence in the capital was confirmed on Friday, just nine days after the Ministry of Agriculture and Rural Affairs expressed alarm at the fever's spread and ordered tighter controls and quarantines. The contagious disease causes fevers and bleeding in pigs and wild boars and is usually deadly, but it does not appear to affect humans.

The government's efforts to contain the epidemic have failed to keep pace with its spread, which threatens the domestic industry for the staple. The trade war with the U.S. exacerbates the problem, as high tariffs on American pork come back to bite Beijing.

In August, 47 pigs died of the fever on a farm in Shenyang, in the northeastern province of Liaoning. The government ordered the culling of many pigs and imposed transport restrictions, and initially the outbreak appeared to have been contained.

But cases continued to pop up nationwide, such as in the eastern province of Jiangsu and in Guizhou Province, south of Chongqing. Containment measures often have been thwarted by problems such as insufficiently disinfected hog transport trucks and black market operators illegally selling pigs from infected areas.

The economy stands to suffer a major blow if the outbreak persists. China produced 53.4 million tons of pork in 2017, roughly 50% of the global total.

The country normally relies on imports to cover its demand for pork, but Beijing slapped 25% duties on American pork in July as the countries traded tariffs. It aimed to fill the gap by increasing domestic production, but the swine fever outbreak stymied that plan.

The livestock industry already feels the pain. The Shenzhen-listed Chuying Agro-Pastoral Group, which deals in pig farming, defaulted on debts this month. Pork processing giant WH Group reported a 3% drop in net profit on the year for the January-September period. The troubles for both companies can be linked to the trade war and swine fever.

Pork prices may continue rising, reversing the decline earlier this year that was prompted by an excess in supply. With swine fever slashing that supply, retail pork prices in August jumped 6.5% on the month, then climbed a further 3.7% in September.

The meat is indispensable to Chinese cuisine and is hard to substitute, being cheaper than beef. With wage growth stalling, a strain on household finances appears unavoidable.

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