China has three major European slaughterhouses, including Vion, in its sights. They are accused of dumping cheap pork on the Chinese market. This measure is not isolated, but seems to be a retaliatory action for European import duties on cheap electric cars from China. The unleashed political game is intensifying rapidly and could also take a long time. The Dutch pig sector is convinced that China is wrong. But being right in this case is probably something different than actually getting it.
That China is now targeting Vion, Danish Crown, and the Spanish Litera directly means that the parties involved are named. Earlier, China focused on the entire European pig sector. Actually, you would expect Tönnies to be in this list as well, but the German pig sector still faces an export ban in China. Therefore, the most famous pig slaughterer in Europe is not involved. Initially, China also threatened with a boycott of European milk powder, but for now, pork seems to bear the brunt.
Not randomly chosen
The Chinese investigation into the dumping of European pork (and also milk powder) is not randomly chosen. China exports many more raw materials to Europe than vice versa, but they import large volumes of them. At the moment, however, the Chinese import demand is not that high. Due to the rapidly growing production of milk and pigs, surpluses have even arisen in the Asian country, putting pressure on prices. A stroke of luck for the European pig sector is that they now rely much less on sales in China than, for example, a few years ago. Nevertheless, trade issues create a tense atmosphere in the pig market. It can be seen as one of the causes of the recent price drop. Access to the Chinese market is and remains crucial for the sales of by-products.
Reactions POV and COV differ in tone
Therefore, it is not surprising that stakeholders in the pork sector responded after the news. Both POV and COV made statements, but interestingly, their responses do not entirely align. For example, POV acknowledges that the dumping investigation is indeed a politically driven instrument. COV does not mention this and only expresses confidence that the Chinese investigation will show that there are no dumping practices. Vion itself did not issue a statement and aligns with COV. It is understandable that the meat sector expects a positive outcome. An overly outraged attitude does not help your position beforehand. But as the POV's response indicates, the question in this politically complicated case is whether being right is the same as getting it.
In an interim phase
The European Union announced earlier this month that import duties on Chinese electric cars will be extended for another four months. If, according to Brussels' findings, Chinese automakers still benefit from government subsidies, the measures will remain in place for five years. The conflict is now in an interim phase, where theoretically anything can happen. However, if the European import duties become definitive by the end of 2024, this will obviously be a sore point for China. The outcomes of the dumping investigation can then be easily predicted.
For now, the dumping investigation seems to be a Chinese trump card to push back. The question is whether Brussels will be impressed by this. The interests of the European automotive industry are enormous and are likely to be fiercely protected. Whether the export interests of the pig and dairy sector outweigh this remains to be seen.