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Investment Policy to Attract Foreign Investment in Chinese Sweetener Industry

Tag: Sweetener, investment, investment policy, foreign investment, natural food additives, food ingredient, starch sugar, production, stevia sweetener, glycyrrhizin Summary: On 24 Dec. 2011, the 2011 edition of Catalogue of Industries for Guiding Foreign Investment was published, and the foreign investment in sweetener industry is encouraged by Chinese government. On 24 Dec. 2011, the National Development and Reform Commission and the Ministry of Commerce of China jointly published the 2011 edition of Catalogue of Industries for Guiding Foreign Investment (the 2011 Catalogue), which began to take effect on 30 Jan. 2012. And Chinese government welcomes foreign investment in sweetener industry according to the 2011 Catalogue, according to CCM’s February issue of Sweeteners China News.

Catalogue of Industries for Guiding Foreign Investment is considered as an important official guiding document for foreign investment in the next few years, which sorts all industries into three categories: encouraged, restrained and forbidden ones. If an industry belongs to the encouraged category, it welcomes foreign investment; if it belongs to the restrained or forbidden category, it restrains and rejects foreign investment respectively. In the 2011 Catalogue, the investment in sweetener industry is encouraged by Chinese government except in starch sugar, which is almost in correspondence with the 2007 edition of the Catalogue of Industries for Guiding Foreign Investment (the 2007 Catalogue). Specially, the restriction on foreign investment in production of natural food additives and food ingredients has been cancelled according to the 2011 Catalogue, reflecting that Chinese government is opening more investment fields for foreign investors in sweetener industry.

The only difference between the 2007 Catalogue and the 2011 Catalogue in sweetener segment is the requirements on investment forms in natural food additives' and food ingredients' manufacture. In fact, Chinese government encourages the production of natural food additives and food ingredients both in the 2007 Catalogue and the 2011 Catalogue; however, according to the 2007 Catalogue, foreign investors can just produce natural sweeteners and natural ingredients through establishing joint or cooperative ventures with Chinese companies, while which has been cancelled in the 2011 Catalogue. This may attract more oversea investment in those industries in China.

The 2011 Catalogue may attract oversea investment in domestic stevia sweetener industry. China is one of the two main stevia planting countries in the world, and most of the stevia sweeteners in China are exported to many oversea regions, such as the EU and the US, where its end products sell well. Hence, current foreign producers of stevia sweeteners may have interest in setting up their own stevia sweetener factories and raw material bases in China: On one hand, they needn't share the profits with Chinese companies; on the other hand, establishing

raw material bases and factories in China will ensure raw material supply and reduce cost of producing stevia sweeteners. In accordance with the 2011 Catalogue, wholly foreign-owned enterprises of stevia sweeteners may be founded in the future. Though glycyrrhizin is also a natural sweetener, it is estimated the barriers for foreign investors to enter into the glycyrrhizin business will still be high owing to the government's restriction in consideration of the lack of its raw material--natural liquorice.

Most food additives (including sweeteners) and straw's comprehensive utilization continue to be encouraged in the 2011 Catalogue. Since xylitol and xylo-oligosaccharide (XOS) are two main downstream products of straw, the encouragement of straw's comprehensive utilization will promote the development of xylitol and XOS. And the two encouragements above will contribute to the development of Chinese sweetener industry as well.

However, corn's deep processing is still restrained for oversea investment by Chinese government in the 2011 Catalogue, just as the 2007 Catalogue, which continues to take some negative effect on Chinese sweetener industry. As a matter of fact, corn's deep processing is not only restrained for oversea investment, but also restrained for domestic investment. According to the Guideline Catalogue for Industrial Structure Adjustment which was publicized in April 2011, corn's deep processing has been already classified in restricted industries in China. Along with the development of corn's downstream industries, such as starch sugar, sugar alcohol, fuel alcohol and so on, the consumption volume of corn is growing, which may affect national grain security, attracting government's attention and leading to the restriction. However, restricting oversea investment in corn's deep processing will impede Chinese starch sugar industry and sugar alcohol industry to absorb fund and advanced technologies from oversea countries. Since starch sugar accounts for the largest market share among all sweeteners both by consumption volume and value, this restriction may continue to slow down the development pace of Chinese sweeteners to some extent.

Source: Sweeteners China News 1202

Content of Sweeteners China News 1202: Kunshan City's 2011 cyclamate export volume increases Cane planting area in southern China increases in 2011 Industrial standard of L-phenylalanine industry launched Monk fruit successfully cultivated in Guizhou Nanning Sugar Industry in the red in Q4 2011

Yunnan Cane Sugar Industry Technology Innovation Strategic Alliance established 12th Five-Year Plan to bring opportunities to sweetener industry Overview of Chinese xylitol industry in 2011 Lack of recognition hinders Chinese isomaltulose industry Investment policy to attract foreign investment in Chinese sweetener industry Ministry of Health expands max dosages and application ranges of certain sweeteners ……

If you are interested in CCM International’s February issue of Sweeteners China News, please do not hesitate to contact us by +86-20-37616606, or email us at (Guangzhou China, February 6, 2012)

Sweeteners China News is a monthly newsletter published by CCM International Limited. Based on China market, CCM offers timely update and close follow up of China’s various kind of sweeteners market dynamics, analyze the market data and trends, Major columns include market dynamic, company dynamic, raw material supply, price update, import & export analysis, Consumption Trend & Competitiveness.

About CCM CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit CCM International Ltd. Guangzhou CCM Information Science & Technology Co., Ltd. 17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China Tel: 86-20-37616606

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Investment Policy to Attract Foreign Investment in Chinese Sweetener Industry  

On 24 Dec. 2011, the 2011 edition of Catalogue of Industries for Guiding Foreign Investment was published, and the foreign investment in swe...

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