Fair & Organic Trade:
A Prosperous Perspective

While the fair and organic trade movement has not quite grasped China yet, it is an area that has a large amount of potential. Considering people importing from China–or Chinese consumers themselves–they see the main benefit in the low price, and pushing fair trade in China products would hurt the bottom line. For that reason the market size for fair trade China products are currently small. However, there are various indicators that appear to show that this fair trade China market will grow and expand in the near future.

Fair trade in China usually refers to when exporters of a developing nation is paid a higher price for the product (for example, fair trade coffee) taking into consideration that the workers who harvest the beans will be paid a higher wage than the bare minimum. Organic trade in contrast is different, since it refers to goods that are produced without any chemical fertilizers, pesticides or other artificial chemicals, which might be interpreted as higher quality.

The decision to purchase fair trade goods from China is often due to philanthropy beliefs, and the attitude that a fair price should be paid to all workers and cheap labour should not be exploited. Whereas organic products are usually purchased due to a mix of egotistical reasons, and a belief of environmental protection and the debated higher quality of food.

 

Fair trade and ecological awareness of nature are increasing. The awareness for ecological problems is continuously rising in China.

 

Fair Trade in China

An early sign of slowly starting to appreciate fair trade in China goods is that fair trade tea has started to be produced and sold in select locations. What is interesting to note, is that in Western countries like the UK, around 90% of consumers recognize and know about fair trade products, whereas fair trade in China is a much smaller niche.

In Western countries, consumers purchase fair trade products as they feel they are contribution to social and economic growth in underdeveloped countries, and people (who in their own countries’ standards) may be considered poor, would still purchase these products to help others.

In China the “Journal of Sustainable Development” saw that the demand for fair and organic products was coming from well-educated and relatively high income sectors of the population. Conclusions could be drawn that low income Chinese residents do not have the level of education needed to understand and appreciate the global issues that fair trade products try to address.

 

Fair trade in China often goes together with organic trade as for coffee. It seems to be straightforward to apply the famous fair trade coffee concept to tea in China.

 

Additionally, fair trade in China and organic food products tend to have price premiums unaffordable to many Chinese residents – even if they wished to purchase such goods. As the country grows and evolves, there should be a direct correlation with the demand for fair trade products.

The agricultural market stands to substantially benefit from the fair trade in China and organic trade movements. As the largest agricultural producer globally, China has had a series of recent scandals concerning the safety of food products within China, the supply chain is there to meet the potential rising demand.

This is also true for organic produce, as there is increased demand for higher quality food due to the scandals. With organics sales being driven by the need for higher quality food then the raised awareness in China should see an increase in consumer demand for organic products.

 

Conclusion

Perhaps there is more room for growth in the organic movement than there is for fair trade within China. The lower standard of living suggests that Chinese consumers would not be too concerned about fair prices on goods they are buying, but the increased awareness of food quality should see organic demand increase. Currently, a lot of this demand is directed to the import of foreign food products that are assumed to be safer and have higher quality.

If you are looking to source fair trade from China or organic items from China, it is possible to do so. However, suppliers will generally be unwilling to provide the items unless there is a long term commitment in place. As they generally do not often deal with such items, they want significant quantities or a long term promise in place to ensure they see a return. A certification according to the numerous Western certification standards in this field is possible. Rigorous monitoring and inspection of potential suppliers is necessary to find suitable candidates.

About the author

Jan has an intimate knowledge of strategic planning and operations management he acquired in the German military and in academia. Having graduated from Peking University, he possesses an acute knowledge of the Chinese economy. Jan routinely consults on short and medium term company strategy and is currently working on the company’s 3 year plan.

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