Let 6 billion cockroaches bloom

Let 6 billion cockroaches bloom
Apr 27, 2018 (WiC 406)

One of the most quoted numbers about China is its population, still the world’s largest at 1.4 billion. But a less remarked upon Chinese statisitic on population involves cockroaches. A widely read report in the South China Morning Post noted that China has the world’s largest cockroach breeding facility, capable of producing 6 billion of the insects per year.

Why, you might be asking, would anyone want to breed so many cockroaches – especially as the bug is considered a disgusting pest by most people. The answer is that they are crushed into a potion which the Sichuan provincial government says has “remarkable effects” on stomach pain. This tonic, which is sweet and has a slightly fishy smell, has been given by doctors to 40 million patients around the country, with the cockroach farm selling it to 4,000 hospitals.

Cockroaches have been an ingredient in traditional Chinese medicine for thousands of years, and the insects themselves are said to have been alive at the time of the dinosaurs. The farm in question also stirred the SCMP’s interest for another reason: the breeding process is overseen by AI technology to maximise cockroach production. “In the cockroach farm, the AI system learns from past work, self-adjusting to improve cockroach production,” commented the newspaper. The farm in Xichang is operated by Chengdu-based Gooddoctor Pharmaceutical Group.

However, some academics warn there are risks to consider. Zhu Chaodong of the Institute of Zoology said it would be a “catastrophe” if billions of cockroaches were to escape into surrounding areas because of an earthquake wrecking the farm. He added it would be a “terrifying” prospect for the city of Xichang’s 800,000 inhabitants.

Australian wine: what a corker!

Australian wine: what a corker!
Apr 20, 2018 (WiC 405)

Back in 2013 we interviewed ‘negociant’ and WiC reader Russell Badham about the China market, where he helps Australian vineyards sell their wine. He described the situation as “evolving quickly”, noting that selling white wine was something of a struggle versus the likes of dark-red shiraz.

Much has changed in five years and this week industry body Wine Australia announced that the country’s yearly wine sales to China had topped A$1 billion ($771 million) for the first time. Exports of Aussie reds and whites jumped 51% in the year to March 31, which helped wine exports to China reach a level more than double those to the US.

We had predicted in our Little Red Book special issues that a growing middle class would create a new market for mid-priced drinking wines and that Australia was likely to be the biggest beneficiary (the early stages of the wine boom in China were focused on expensive First Growths from Bordeaux such as Lafite and Latour). A drop in tariffs as a result of a free trade deal has also helped wine exports from the likes of the Barossa Valley and Margaret River too.

The leading exporter from Australia is Treasury Wine Estates, whose Penfolds range is the biggest selling Aussie wine brand in China, followed by the Rawsons Retreat range in second and its Wolf Blass series in fifth. Hence the milestone on sales to China is no surprise to Robert Foye, TWE’s chief operating officer (and another WiC reader). “Consumers in China have shown that they love the taste, heritage and quality of our Australian brands, including Penfolds, Wolf Blass and Rawsons Retreat.The future is bright for Australian wine in China,” he confirmed this week.

Tariffs on flamethrowers?

Tariffs on flamethrowers?
Apr 13, 2018 (WiC 404)

As Bloomberg has pointed out, “When you export half a trillion bucks worth of stuff to the US, there’s bound to be some unusual items in the mix.” The news agency and other media sources last week pored through the Trump administration’s list of Chinese imports which are set to be targeted with 25% tariffs. Among the hundreds of items there are quite a few that have people scratching their heads. Who knew that American consumers were buying items from China like flame throwers and fetal bovine serum? And in the age of Apple Music and Spotify it seems strange that the US Trade Representative’s Office thinks it is worth slapping tariffs on music cassette tapes – a product more associated with the 1980s. Other unusual items included on the tariff list: rocket launchers (if for private use), “haymaking machinery other than mowers” and nuclear reactors.

Bloomberg reported that the USTR said the list was compiled after analysts at US government agencies “identified items that benefit from Chinese industrial policies” or are “likely to cause disruption to the US economy”.