It's the first time Beijing itself has gone through with such a plan, but China's attempts to control the pork market are nothing new. The importance of pork to China is hard to overestimate — and because of that, Chinese pork prices could have surprising ripple effects around the rest of the world, too.
Since China's farming industries were liberalized in the late 1970s, pork consumption has dramatically boomed in China. The country is now both the largest producer and consumer of pork, which now makes up around 60 percent of China's total meat consumption. Chinese citizens consume more than twice as much pork as the global average. Indeed, as the Economist noted in 2014, pork consumption has deep roots in Chinese culture:
Pigs have been at the centre of Chinese culture, cuisine and family life for thousands of years. Pork is the country’s essential meat. In Mandarin the word for “meat” and “pork” are the same. The character for “family” is a pig under a roof. The pig is one of the 12 signs of the Chinese zodiac: those born in that year are said to be diligent, sympathetic and generous. Pigs signify prosperity, fertility and virility. Poems, stories and songs celebrate them. Miniature clay pigs have been found in graves from the Han Dynasty (206BC-220AD). Historians think people in southern China were the first in the world to domesticate wild boars, 10,000 years ago.
In recent years, China's huge demand for pork has meant that the country's broader economy can be affected by fluctuations in its price. In 2007, when disease wiped out huge numbers of pig communities in China, the pork price surged by nearly 87 percent in one year. Pork prices became a major contributing factor in pushing the country's inflation rate to its highest levels in over a decade (some have even dubbed China's Consumer Price Index the "China Pork Index" because of pork's outsize influence on inflation). Food prices have been linked to civil unrest in the country, which clearly worries China's leaders.
In response to this and other worrying events, China decided to set up a national pork reserve in 2007, similar to how other countries maintain reserves of foreign currency, oil or grain. The reserve not only can release more pork at times of high prices but also take pigs from farmers at times of low prices.
Of course, a strategic pork reserve sounds nice, but it's not entirely without its problems (even frozen pork won't last more than a few months). So China also began importing more pork from abroad, along with the feed crops to expand its own pig industry, intertwining Chinese demand for pork with the global market. In 2013, the Chinese firm Shuanghui International bought Smithfield Foods, an American company and the world's largest pork producer, in a $4.7 billion deal.
Even with these measures, pork prices can still cause problems in China. In 2011, pork jumped 57 percent in a year, helping to lead a surge in inflation. Current pork prices are now above that 2011 peak even after the reserve announcement was made, and it's unclear that the government will really be able to help: Last year, the U.S. Department of Agriculture released a report arguing that government attempts to buy pork when it got too cheap had "more of a psychological effect than an actual market impact."
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