China Beef Sector Grows as Japan Cuts Consumption Tax

The economies of China and Japan are showing distinct trends in key markets for New Zealand exports. In China, the beef retail sector is experiencing growth, with Silver Fern Farms chief executive Dan Boulton noting that retail programmes are performing well and demand is strong. However, domestic consumption remains soft in other areas, growing only 1.3% year on year in the first half of this year.

The Chinese economy grew at a rate of 4.7% for the first six months of the year, but growth was uneven, with retail consumption subdued due to a weak property market. Boulton expects any recovery to be gradual and notes that seasonal demand is expected to lift as China moves into winter and consumption of hot pots increases.

In contrast, Japan's government is planning to slash its consumption tax on food from 8% to 1% for two years starting next April to stimulate domestic demand. This move could modestly improve consumer demand and retail competitiveness for New Zealand dairy, kiwifruit, and meat exporters, but the impact on restaurant demand is unclear.