As China Reopens Ahead of Lunar New Year, Carbon-Intensive Meat Demand Set to Surge

With China’s U-turn on its “zero-Covid” policy and the Lunar New Year just around the corner, a boom in carbon-intensive meat consumption is highly likely.

For the rest of the world, 2022 was marked by a return to the pre-pandemic “normal”. But China, unlike the rest of the world, pushed on with its inward “zero-Covid” policy, which many saw as a negative sign of Chinese demand for global goods. In November 2022, the country reported its worst import and export numbers in over two years. That’s bad news for almost all industries, including the meat sector, which largely expected Chinese consumption to remain stagnant, given what seemed like an unlikely chance the country would ease out of its strict Covid rules anytime soon. 

Amid the dire outlook over China’s zero-tolerance approach, the USDA reported in September 2022 that it expected the country’s meat demand to fall by 3% in the year ahead, which would translate to a drop in Chinese beef imports by over 19%. Poultry is forecast to remain largely flat, with one recent industry trade publication suggesting Chinese chicken producers could “look forward to little or no growth” in 2023. 

But just one week before 2023, China made a big U-turn announcement. Following weeks of widespread protests driven by Covid lockdown fatigue, China is now re-entering the world stage. From January 8, 2023, quarantines have been abandoned and all border restrictions dropped.

Double whammy: Post-pandemic revenge spending and New Year indulgence  

Coupled with the Lunar New Year festivities underway this month, which typically means lavish dinner tables (food waste in Chinese households typically rises by 20% during the holiday), China’s reopening could prompt a serious frenzy for all goods—including meat. In its newsletter about what to watch in food in 2023, Bloomberg specifically called out the country’s restrictions turnaround, writing that Chinese consumers will regain the confidence to dine out and travel and this will result in a big jump in demand.

Demand could be pushed even higher due to “revenge spending”, the flurry to splurge after a years-long period of isolation for many Chinese consumers. While expert consensus mainly focuses on cosmetics and personal care as the primary sectors set to benefit the most from the pent-up demand, post-pandemic China will likely see meat sales rise. Lunar New Year dinner tables typically feature whole chickens and fish, and with family reunions taking place after a prolonged period of food service shutdowns, many may opt to celebrate with extravagant meat-centric restaurant menus.

Dan Wang, Hang Seng Bank China’s chief economist, expects “catering, tourism, entertainment…[to] be among the first to revive.” 

“After nearly three years of financial and psychological stress due to the intermittent pandemic control measures…The upcoming Chinese New Year festival celebrations will be a bellwether for consumer sentiment and business confidence,” says GlobalData consumer analyst Bobby Verghese.

US meat producers and industry traders are already on the lookout for the lucrative opportunity the crossover between China’s U-turn and the Year of the Rabbit. In one latest forecast, Dennis Smith, commodities broker of Archer Financial Services, says that while the country may be battling widespread infections at the moment, as soon as it “gets on the backside of the pandemic, the pent-up demand for pork and beef is likely to soar.” 

Similar hopes came from US Meat Export Federation communications director John Herath, who described the lifting of China’s Covid restrictions as “tremendous news for red meat demand.”

Andrew Leung, co-founder of Good Food Technologies, a startup that produces plant-based pork meat and products told Green Queen that while “meat consumption has decreased over Covid times due to economic pressures and price fluctuations”, he believes “meat consumption might increase as the economy picks up.”

More meat, more carbon emissions

A boom in demand for meat in the world’s second-largest country would further threaten the current global climate goals.

While Chinese per capita consumption of meat is still at roughly half of that of richer Western countries like the US and Europe, the country’s huge mid-income population and its rising appetite for meat has propelled it to the top of global tables: China is the world’s largest meat consumer by volume. According to the United Nations FAO data in 2022, Chinese supply of poultry, pork, beef and mutton reached 75.5 million tons, surpassing that of the US at 50.1 million tons.

This will translate to huge costs for our climate, given animal livestock accounts for “at minimum” 16.5% of all global greenhouse gas emissions, according to a 2021 paper. 

If global levels of meat consumption continue unabated—never mind a potential surge in demand in the months ahead—we’re looking at livestock farming taking up nearly half of the entire carbon budget needed to meet the 2°C and 1.5°C climate targets by 2030. 

Chinese appetites have also been shifting away from pork and towards more carbon-intensive beef in recent years, a trend prompted by African swine fever-related supply issues. 

Related: What do Chinese consumers think about sustainability?

Some hope in alternative protein shift

Although China’s plant-based population remains small, flexitarianism and the adoption of sustainable alternative proteins are on the rise. 

The Asian giant is one of the fastest-growing markets for the alt-protein industry, with one 2021 report expecting as much as 200% growth in demand by 2026. A more recent survey in late 2022 has found that 60% of middle-income consumers in urban areas in China, most of them omnivores, are now trying plant-based meat. 

According to the poll undertaken by market research firm Good Growth, Chinese consumers mainly cite health, taste, and a “cool factor” as their reasons for reducing their meat intake. 

Leung is optimistic about the plant-based meat sector in China and agrees that taste is king: “people are willing to try as long as it tastes good.”

Lead image courtesy of Unsplash.