Huge fish demand in China is threatening Japanese fisheries and consumption

An unusual phenomenon has been occurring in the western and central Pacific Ocean (WCPO), the largest skipjack fishing ground in the world, extending from eastern area of the Philippines to Micronesia.

From that area, skipjack and other fish move northward to Japan's near shore through what is known as the Kuroshio current.

Skipjack catch, which had stood at around 100,000 tons in the 1940s and 50s, constantly expanded since then, reaching 1.6 million tons, but signs of stock depletion have now emerged.

Bulk of the skipjack caught in the WCPO are transported to Bangkok where they are processed into canned tuna or pet food. However, shipments of skipjack to Thailand in January-August last year registered the largest drop in the past three years, with transaction prices rising to an all-time high level.

Industry sources blame the stock decline on purse-seine fishing vessels which catch the fish, including small-size ones, at one swoop.

It has been confirmed that China sent 11 large-scale purse-seine boats (1,000-ton class) into this area three years ago--the scale not possible for the Japanese vessels under the current stock management regulations.

According to Japan's Fisheries Agency, the number of purse seiners in the world increased from 157 in 2000 to 250, of which Chinese vessels accounted for 13 and Taiwanese 34. But, in actuality, it appears that 70 to 80% of the increased 93 vessels are owned by either Chinese or Taiwanese.

An industry source says that China and Taiwan are using the countries located near the fishing ground, such as Micronesia, as camouflage for their own fishing.

The impact of overfishing is extending to skipjack consumption in Japan. Skipjack landings by Japan's near-shore pole-and-line fishing boats last year was the lowest on record at 30,100 tons.

Taichi Takeuchi, president of the nationwide restaurant chain Kazuo Corporation, complains that his company could not buy large-size skipjack of 2.5 kg or over, which are suitable for sashimi because wholesale prices soared over 30%.

A high-ranking official of Japan's near-shore tuna fishing association-- formed by large-scale skipjack pole-and-line boat owners--also says that the industry experienced an abnormal phenomenon throughout last year because of record poor fishing.

Major Japanese trading firms estimate that seafood consumption in China, which now stands in the scale of Y20 trillion (as compared with Y5 trillion in Japan) is likely to continue to grow by two-digit rate per year.

Demand for such species as shrimp, tuna and Norwegian salmon is rapidly increasing, centering among middle-income families.

Notably, consumption of shrimp--wild and farmed combined--in China amounts to 2.6 million tons, which accounts for about 40% of the world's total consumption of 7 million tons.

A great proportion of the fishery resources caught by Chinese vessels are supplied to the domestic market catering to consumption by 1.3 billion people, but, along with the economic growth in China, waste of food has also become apparent.

A Chinese construction company official says that, in China, a banquet is success if guests leave food after eating their fill. The host certainly loses his face if this does not happen.

A Chinese university professor estimated that mutual entertainments among government officials and high-ranking executives of the Chinese Communist Party alone amount to about Y2.7 trillion a year.

This trend of sumptuous feast is spreading among not only wealthy but also middle-income strata in China where income level is rapidly improving.

Seasonal banquets have become opportunities to demonstrate one's affluence, and enormous amount of food is wasted because of the people's desire not to lose their face.

Some say that 'Chinese have no sense of wastefulness as far as food is concerned. You will be eventually neglected if you skimp on food at banquets.' A Shanghai citizen, who gained higher managerial post, was all willing to prepare food in twice the amount for the number of participants in a banquet for colleagues and relatives.

Thus over-consumption is taking place in China in the back of its over-fishing.

China is now making all-out efforts to obtain fishing rights in Micronesia by helping improve fishery infrastructure, such as ports and processing facilities, in that island country.

Prof. Masayuki Komatsu, an expert on fisheries administration at the National Graduate Institute of Policy Studies, explains that many Chinese fishing vessels tend to consider recovering their investment by engaging in overfishing in three to five years and then withdrawing from the fishery when the stock is depleted.

China also has other aims. Industry sources point out that the country aims to expand its hegemony in the oceans and find allies at international fora such as the United Nations.

China has a grand design to boast its dominance in Asia by linking Vietnam, Thailand and Myanmar by means of super high-speed train network, says a high-ranking official of a Japanese railway company.

Meanwhile, the world's grain market is keeping a close watch on China's import trend because it could redraw the current power map in the world grain market--in which U.S. majors control about 70% of the market--if the major consumers shift from advanced countries to newly emerging nations.

To gain a lead in the worlds grain trading, there is need to control the supply network in producing places and the sales network in consuming places. If a giant Chinese trading house emerges, Japan could face the risk of being deprived of means to ensure food security.

Will the world's investment concentrate in China in the future? The answer is both yes and no.

'If the Chinese government behaves truly wisely, it will open up its capital market and liberalize its currency,' says an official of Japan Exchange Group Inc. 'If that happens, Shanghai could become the world's financial center.'

The U.S. National Intelligence Council, and the World Bank's report as well, point to the possibility of the Chinese yuan becoming the key currency in Eastern Asia. Japanese financial market participants forecast that the yuan will be internationalized at a considerable speed.

'If Japan stands idle, it would certainly be degraded to the status of one of China's peripheral countries,' notes Takatoshi Kato, president of the Japan Center for International Finance.

In the Asian market, rivalry between the U.S. and China over free trade treaty is intensifying. While Washington gives emphasis to the Trans Pacific Partnership (TPP), the Beijing government upholds the concept of the Regional Comprehensive Economic Partnership (RCEP) which might exclude the U.S.

The presence of the U.S. is crucial for the stabilization of Asia in face of China's expansionism both in the oceans and land, observed a high-ranking official of Japan's Ministry of Economy and Industry, adding that 'Japan's national interest will rest on the equilibrium of the regional power balance.'