2.3.4 Performance of the sector

Physical performance

Contribution of different freshwater farming environments to aquaculture and fisheries output

In China, national statistics on aquaculture production are collected by culture environment and by commodity (species). For freshwater environment, estimated production figures for 1999 are reported in Table 10. The Table also provides estimated contribution of each culture environment to aquaculture and fisheries output.

Table 10 suggests that, in 1999, freshwater environment was the major source of aquaculture output, accounting for slightly more than 59 percent. It also represented about 34.5 percent of total output from the fisheries sector (capture fisheries and aquaculture combined).

Of the freshwater farming environments, pond aquaculture was the most important source of output with an estimated share of about 72 percent of the freshwater aquaculture output and estimated contributions of about 43 percent and 25 percent to the total aquaculture output and total output from the fisheries sector, respectively. Reservoirs ranked second with about 10 percent, 6 percent and 3 percent shares of output from freshwater aquaculture, aquaculture and aquaculture and fisheries combined, respectively.

TABLE 10
Estimated freshwater production and contribution of different farming environments to 1999 national aquaculture and total fisheries output, China

¹ Aquaculture and capture fisheries combined.
² Mainly indoor tanks with water recirculation systems.
Source: Estimated from China Fisheries Yearbook 2000, China Agricultural Press, 2001

TABLE 11
Absolute and relative contribution of major cultured freshwater species to the 1999 national aquaculture and total fisheries output, China

Source: Estimated from China Fisheries Yearbook 2000, China Agricultural Press, 2001

Contribution of major freshwater species to aquaculture and fisheries output

Aquaculture output from different farming environments is a mix of different species. As discussed earlier, freshwater aquaculture products are finfish such as carps and tilapia, crustaceans including shrimp and the Chinese mitten crab and other high valued species like eel and soft-shelled turtle. The absolute and relative contributions of the major and other freshwater species are described in Table 11.

It can be inferred from Table 11 that of the freshwater aquatic animals commonly cultured in China, carps produce the majority of the output. They contributed more than 79 percent of the 1999 freshwater aquaculture output. This is equivalent to about 47 percent of all the output from aquaculture and a little higher than 27 percent of the output from aquaculture and capture fisheries combined. Tilapia comes in the second position with a contribution of about 3.9 percent to output from freshwater aquaculture, a 2.3 percent share of the output from freshwater and marine aquaculture combined, and 1.4 percent of the total output from aquaculture and capture fisheries.

TABLE 12
Absolute and relative contribution of major cultured marine species to the 1999 national aquaculture and total fisheries output, China

Source: Estimated from China Fisheries Yearbook 2000, China Agricultural Press, 2001

Of the carps, silver and bighead carps are the most important species. They account for about 34 percent of the freshwater output, 20 percent of aquaculture production and nearly 12 percent of the combined aquaculture and capture fisheries output. Grass carp follows with about 21.5 percent share of the freshwater output, 13 percent of aquaculture production and approximately 8.6 percent of the combined aquaculture and capture fisheries output. Black carp is the least important carp species. It contributes about 1.2 percent, 0.7 percent and 0.4 percent to the freshwater, aquaculture, and aquaculture and capture fisheries combined output, respectively.

Contribution of major marine species groups to marine and total aquaculture and fisheries output

As indicated in Table 12, the 1999 marine aquaculture output was estimated at 9 743 000 tonnes. This amount represents about 40.7 percent of the total aquaculture output or 23.6 percent of the total output from the fisheries sector (aquaculture and capture fisheries combined).

Shellfish were the major contributor to marine aquaculture production, accounting for more than 81 percent of the output. This represents about 33 percent of the total aquaculture output or slightly more than 19 percent of the total output from the fisheries sector (aquaculture and fisheries combined).

Besides sound government policies, which will be discussed later, gradual expansion of farming area (Figure 4), increase in the number of species farmed and technological development explain the increase in production.

Economic performance

Contribution of major farmed species to the value of aquaculture and fisheries output

Because of the large size of the country, prices of aquatic products, like any other product, vary greatly across regions. In addition, for each region, they change with seasons. The lack of complete data sets on market prices of different cultured species in China makes it difficult to accurately determine the financial contribution of different cultured species to aquaculture and/or to the fisheries sector. A rough estimation of this contribution is made based of prices of some aquatic products which were provided by the China Fisheries Information Network; the Network collected them from different wholesale markets at different times in 1999. For each species, the price used for the estimation is the average price from different wholesale markets in different seasons. The price of silver carp/bighead carp is the average price of silver carp and bighead carp. Results are presented in Table 13 for freshwater species and Table 14 for marine species.

FIGURE 4
Evolution of farmed inland and marine area from 1978 to 1999 in China, 2002

Table 13 indicates that, in 1999, freshwater aquaculture contributed about 59 percent to the value of the total output from capture fisheries and aquaculture combined. This monetary contribution is much higher than the physical share of the industry to the sector (34.5 percent). The estimated total value of all the freshwater cultured species is much higher than what appears in the Fisheries Statistics Yearbook produced by the Bureau of Fisheries (125.46 billion Yuan). Unfortunately, because this reference does not provide the value of the output or average prices by cultured species, it is not possible to reconcile this estimate to the total figure in the Fisheries Statistics Yearbook. However, although there might be some errors in the estimates provided in Table 13, the results presented herein reflect the importance of freshwater aquaculture in generating income for producers, especially when compared to the value of the national fisheries production.

Table 13 also illustrates that carps were the most important species group, generating about 50 percent of the revenues from freshwater aquaculture or 29 percent of revenues from both aquaculture and capture fisheries. This time, however, the Chinese mitten handed crab ranked second in lieu of Tilapia, contributing more than 15 percent to revenues from freshwater aquaculture, or 9 percent of income from aquaculture and capture fisheries combined. The high price of the Chinese mitten handed crab explains this finding. The price of the Chinese mitten handed crab is slightly twice as much as the price of Eel, but 13.6 times the price of the Chinese bream, 15.6 times the price of carps (8 512 Yuan/ton on the average) and 20.8 times the price of tilapia.

It can be inferred from Table 14 that in 1999, marine aquaculture contributed about 29 percent to revenues from the fisheries sector. Of this contribution, 77 percent came from shell fish and slightly higher than 13 percent were generated from crustaceans.

TABLE 13
Absolute and relative contribution of major cultured freshwater species to the value of the 1999 freshwater aquaculture and total fisheries outputs, China

¹ Average price in Yuan per ton of fresh weight.

TABLE 14
Absolute and relative contribution of major cultured marine species to the value of the 1999 marine aquaculture and total fisheries outputs, China

¹ Average price per ton of fresh weight.

Contribution to employment and income generation

The Chinese fishery sector plays a more and more important role in the country’s economic growth, especially through job creation and income generation. These drive up fishermen and aquafarmers’ standards of living. It is estimated that the contribution of the total value product from the fisheries sector of the value of agricultural output grew from about 3.5 percent in 1985 to 10.3 percent in 1999. Table 15 presents estimated employment and income generation in the fisheries sector, including aquaculture, for 1994 and 1999.

Results contained in this Table reveal the growing importance of aquaculture in providing employment and generating relatively well-paying jobs. Around four million people were employed full time in aquaculture in 1999 up from less than three million in 1994, which represents an annual employment generation rate of 6.2 percent. These findings also indicate that in 1999, aquaculture absorbed 66 percent of the workforce employed in the fisheries sector compared to 62 percent five years before.

TABLE 15
Estimated employment and income generation in aquaculture and capture fisheries for 1994 and 1999 in China

¹ Adjusted figures. Original figures were, for 1994: 2 661 344 for aquaculture, 1 609 291for fishing and 469 848 for services in the two sub-sectors. For 1999, these figures were 3 569 416, 1 848 784 and 628 224, respectively. Because "services" figures were not reported by sub-sector, they were allocated between the two sub-sector on a weighted basis. The total reported was not affected by the adjustment.
² US $1=8.28 Yuan.
³ Average of the Fisheries sector; separate incomes for aquaculture and fishing were not available.
Source: Estimated from China Fishery Statistics Yearbook, 1997, 1998, 1999, 2000

TABLE 16
Contribution of aquaculture and other sectors of the economy to exports earnings in 1999, China

¹ 1998 figure is used for comparison purposes as a proxy for the 1999 which is not available.
² Aquaculture and capture fisheries combined.
Source: Estimated from China Fishery Statistics Yearbook 2000

The 1999 per capita annual income of aquaculture farmers was at least twice as much the average income of farmers in rural areas. This income grew from an average of 2 936 Yuan per year in 1994 to 4 474 Yuan in 1999, or a 308-Yuan average increase per year. Compared to the increase in revenue of an average farmer in the rural areas, it appears that income growth in the aquaculture sector in absolute terms was 1.56 faster than the growth in rural areas. Income of an average farmer in rural areas grew by an annual average of 198 Yuan between 1994 and 1999. In relative terms however, the average income in rural areas grew faster than that of aquaculture farmers (12.6 percent vis-à-vis 8.8 percent).

Contribution to export earnings and major destinations of output

In 1999, China’s seafood exports reached 1.35 million tonnes, valued at about US$ 3.14 billion. This is respectively 34.4 percent and 10.2 percent higher than in 1998. Seafood exports from aquaculture also witnessed an impressive increase in the past twenty years, contributing to the continuing increase in the Chinese seafood foreign trade. Table 16 shows the contribution of aquaculture and other sectors of the economy to exports earnings in 1999.

Assuming there was no significant difference between exports of aquaculture in 1998 and 1999, it can be seen from this Table that China’s 1999 exports of aquaculture products were valued at about US$ 1 billion. This represents nearly 32 percent of foreign exchange earnings from the whole fisheries sector which contributed US$ 3.14 billion to the economy. Compared to the rest of the sectors of the country’s economy, aquaculture exports accounted for about 9 percent of the earnings from export of agricultural products; this is equivalent to about 0.7 percent of the value of China’s total exports. Exports from the fisheries sector as a whole represented 27 percent of agricultural exports, or about 2 percent of the country’s total exports. Agricultural exports contributed about 8 percent to the total foreign trade.

China’s seafood is exported to about ten countries. However, the main destinations are Japan, Korea, the United States and Hong Kong (before the later reverted to China). These four countries absorb about 85 percent of the exports.

Major species exported and their contribution to export earnings

Major aquaculture products exported and their contribution to export earnings in 1998 are listed in Table 17.

Table 17 indicates that eel is by far the main aquaculture product exported from China, accounting for 67 percent of aquaculture exports. Other main species include seaweed and shellfish whose shares of aquaculture exports are 7.5 percent and 7.4 percent, respectively.

TABLE 17
Major aquaculture products exported and contribution to export earnings in 1998, China

Source: Estimated from China Fishery Statistics Yearbook 1999.

TABLE 18
Estimated relative costs and returns for aquaculture and selected farm enterprises in China in 1999

¹ Average of intensive, semi-intensive and extensive farming.

Demand for baked eel is the highest. Of the three forms in which eel exported (live, frozen and baked), the baked form represents 92 percent of the total; the live form accounts for 7 percent while the frozen form represents 1 percent of the eel exported.

Comparative and competitive advantage of the sector

Evaluation of comparative advantage of the aquaculture sector requires a comparison of aquaculture to other sectors of the economy in terms of competition for domestic productive resources such as land, capital and labour. One measurable indicator of the competing use of productive resources, and thus, of the relative competitiveness of the aquaculture sector, is its relative profit. Alternatively, relative returns on resources employed such as wages and returns to capital can be used. Unfortunately, no data were available to allow for comparison of aquaculture performance with other crops. Thus, only the competitiveness of aquaculture enterprises was evaluated. Results, which consist of estimated costs and returns for shrimp, eel and carp farming, are presented in Table 18.

One of the practical approaches of evaluating the comparative competitiveness of the Chinese aquaculture sector vis-à-vis international competitors is to look at the current major export species produced at home and abroad and targeting the same importing country in terms of costs and returns of producing these species. The goal would be to identify some of the main factors which may have provided China a competitive edge in the international markets as compared to existing and potential suppliers.

This approach implies conducting cross-country case studies or locating studies with international comparisons of cost of production and returns on these major exporting aquaculture species. Unfortunately, conducting cross-country case studies was beyond the scope of this study. In addition, international comparisons of costs and returns of farming these species are not always readily available. Of the species cultivated across Asia and exported^[6], shrimp was the only one for which information allowing for comparison of comparative advantage across countries was available. This information, which consists of resource cost ratio indices (RCR), is summarized in Table 19.

The results reported in this table come from Ling et al. (2001). The authors obtained these results through the "Domestic Resource Cost (DRC)" method. The DRC method allows for cross-country comparisons of relative degree of efficiency in producing an identical exportable good (Ling et al.). This method has been used by previous authors on policy incentives and comparative advantage^[7] in the fisheries sector (Jitsanguan, 1988) as well as to analyse the comparative advantage in the production of food and non-food crops (Gonzales et al., 1993; Pearson and Meyer, 1974).

TABLE 19
Resource cost ratio indices of shrimp farming in selected Asian countries by farming intensity and export market

n.a. = not applicable.
Source: Extracted from Bith-Hong Ling, PingSun Leung and Yung C. Shang (2001). Comparing Asian shrimp farming: the domestic resource cost (DRC) approach. In NACA, 2001: Economics and management of shrimp and carp farming in Asia: a collection of research papers based on the ADB/NACA farm performance survey. 13-31pp.

The DRC model used by Ling et al. is illustrated as follows:

where production inputs are classified as tradable inputs (j) and non-tradable inputs (k). Shadow prices are used in evaluating the social opportunity costs of all inputs (j and k) and outputs (o). World prices are taken as shadow prices of tradable inputs (j) and output (o). The variables are defined as:

The "Index of Comparative Advantage" or the Resource Cost Ratio (RCR) index is obtained by dividing the DRC by the equilibrium nominal exchange rate (E). In other words, RCR = DRC/E.

If:

RCR <1, the country has a comparative advantage in producing and exporting the particular commodity;
RCR = 1, the country has comparative neutrality in producing the commodity;
RCR >1, the country has a comparative disadvantage neutrality in producing the commodity.

Table 19 provides the resource cost ratios (RCR) of shrimp produced intensively, semi-intensively and extensively in Bangladesh, China, India, Indonesia, Philippines, Sri Lanka, Taiwan Province of China, Thailand and Vietnam for the EU, Japanese and US markets. It can be inferred from these results that China can compete internationally in the farmed shrimp market; the average resource cost ratio across production intensity systems and by output destination is below one. Like for any of the producers compared, except Bangladesh and Vietnam, China’s competitiveness is strongest in the Japanese market (RCR = 0.26). Overall, Chinese producers are better off exporting to Japan first and then to the European Union before considering selling to the United States. The high competitiveness of shrimp produced in China, in the Japanese market can be explained by the premium price that shrimp commands in Japan (US$11.19/kg) (Ling et al., 2001).

A comparison of RCRs by production intensity (regardless of the export market) reveals that China’s international competitiveness is highest with shrimp produced semi-intensively. The RCR for semi-intensively produced shrimp is 0.30, compared to 0.32 and 0.78 in extensive and intensive systems, respectively.

Of the eight other countries^[8] compared to China, Thailand is the most serious challenger to China in the international market. In EU market, RCR-Thailand = 0.27 compared to 0.53 for China; in the in EU market; in the Japanese market, RCR Thailand = 0.17 vis-à-vis 0.26 for China and in the US market, RCR-Thailand = 0.20 versus 0.61 for China. The second main challenger is Sri Lanka. Taiwan is barely competitive outside the Japanese market.

Direct and indirect contribution to food security

Estimation of aquaculture contribution to food security requires a wide range of detailed information such as the total consumption of food locally produced and imported, consumption of aquatic and other products (imported and locally produced), the percentage of the domestic output consumed by producers and the percentage of the domestic aquaculture output consumed by domestic buyers. Because most of this information is lacking or incomplete in the available literature in China, it is difficult to estimate the exact contribution of aquaculture to food security. Only a qualitative analysis of the direct and indirect contribution of aquaculture to rural households (producers)’ food security can be made. This could be done based on existing data on the volume and the fate of aquaculture output produced by rural households. These data are presented in Table 20.

In Table 20, the quantity consumed by producing households was derived by assuming that the difference between production and sales are kept by the farm households for their own use. About 20 percent of the aquaculture produce by rural households are retained for consumption by producers. This implies that nearly 4 kg of home produced aquaculture products are available for consumption per household per year, thereby providing some level of food security.

As already discussed, most of Chinese aquaculture is comprised of carps. Carps form the essential of fish and fishery products used for human consumption in China. Generally, because they are sold at low prices, carps are affordable to low-income population. High income segments of the population, particularly in well developed areas such as Beijing, Shanghai, Guangzhou, Shenzhen and eastern area of China tend to consume more high value species than in the vast western areas.

Perhaps, more important is the indirect contribution of aquaculture to food security. Table 20 shows that about 81 percent of the aquaculture products from rural farm households are sold, which suggests that aquaculture is more of a cash generating activity than a direct source of food. Selling farm produce can also contribute to food security. Income generated through marketing of aquaculture products can be used, totally or partially, to purchase food items other than aquatic products. Availability of diverse food items not only enhances food security, but also contributes to a balanced diet of rural families, communities, villages and townships.

TABLE 20
Output, sale and consumption of aquaculture products per rural household in China from 1994 to 1999

Source: Obtained/adapted from China Statistics Yearbook 2000

Social performance (livelihoods)

Since 1978, the Chinese Government has focused on poverty alleviation, especially in rural areas. Aquaculture is one of the many poverty alleviation programmes which are employed by the Government in the fight against poverty. The size of the poor population^[9] dropped from 250 million in 1978 to 34 million in 1999 (Ministry of Agriculture, 2001). Unfortunately, there is no specific information which allows for the quantitative assessment of aquaculture contribution to poverty alleviation. Nevertheless, it can be argued that the high employment creation and high incomes in aquaculture as well as the fast spreading of integrated rice paddy field-aquaculture in western areas of the country are good evidence that aquaculture contributes to improving the livelihood of local communities. These have already been discussed in previous sections (Table 15).

Another contribution of aquaculture to people’s livelihoods is its direct contribution to good health. Seaweed used to be the food of the poor. In recent years, demand for seaweed has gained momentum from all segments of society as a result of government policies to encourage its consumption and consumers’ health concerns. As China is an iodine shortage country, the Government has enforced an iodine supplementation policy for human consumption. This policy is carried out through adding iodine into salt; about 100 tonnes of iodine is produced every year from the seaweed industry, for this purpose.

There are also social amenities such as clinics, schools, roads, running water, which often go hand-in-hand with the development of aquaculture in local areas. These amenities contribute to the improvement of the livelihoods of the communities.

Environmental performance

Generally, China’s aquaculture development and management have been environmentally friendly. The Government is vigilant in ensuring that aquaculture production systems do not cause negative environmental impacts.

However, there have been isolated cases where negative environmental impacts have been identified. In places where problems have occurred, mainly as a result of the irresponsible discharge of land-use waste, the situation has been brought under control through law enforcement. Remedial actions for environmental restoration have also been taken. In addition, measures have been taken to develop appropriate management strategies through adoption of the precautionary principle approach, as embodied in the Food and Agriculture Organization’s Code of Conduct for Responsible Fisheries. Non-point sources of pollution affecting aquaculture, mainly resulting from land wastes, have been prevented through suitable awareness building and implementation of regulatory control programs by the responsible authorities.

2.3.5 Strengths and constraints

Major strengths

Besides sound government policies which will be discussed in the next chapter, the main major strengths of Chinese aquaculture include a well established seed production technology, a strong and continuing research and development infrastructure, a solid extension service in place, relatively higher profit and net income per labour and a strong demand for aquatic products.

A relatively well established freshwater seed production technology

The 2000 fisheries statistics compiled showed that areas under marine and freshwater aquaculture production were respectively 1.24 and 5.28 million hectares. The area under paddy-fish culture was 1.53 million hectares. Stocking such areas requires tremendous quantities of seeds. In 2000, it took about 2.56 million tonnes of fingerlings to stock freshwater aquaculture systems. These were produced from 602.2 billion fish fry. Of these, 542 billion fry, or about 92 percent, were produced artificially.

For marine aquaculture seed production was as follows: 3 882 million of fish fry; 58.3 billion shrimp post-larvae; 175.3 billion of scallop seeds; 1 030 million of abalone seed; 15.5 billion of kelp seeds and 220 million of laver.

Strong and continuing research and development infrastructure

In spite of a relatively well established seed production technology and infrastructure, the Chinese government continuously encourages investment or invest in aquaculture research and development, including in the post-harvest sector. There is a total of 6 922 aquatic products processing plants with a processing capacity of 9.34 million tonnes per year. In 2000, the volume of fishery products in cold storage reached 6.52 million tonnes.

Solid extension service in place

The Chinese Government attaches a high importance to extension as one of the means of developing aquaculture. There are about 4 260 fisheries authorities in China, employing 31 290 staff. In addition, there are 7 479 researchers in 217 fishery scientific research institutes, 3 492 teachers in 29 fishery educational institutes, 15 636 staff in 2 451 fishery technical extension stations and 28 187 staff in 1 120 breeding production stations.

Out of a total fishery labour force of about 13 million people in the country, close to 50 percent are full-time workers. Of these, 56 percent, or more than 3.7 million are employed in aquaculture.

Relatively good economic performance

As discussed under section on economic performance (comparative and competitive advantage), aquaculture in China, especially that of species like eel and shrimp, offers good returns on investment. Good profit margins contribute to sustainable development of the sector. Because, overall, aquaculture is a competitive sector, farmers draw away productive resources from other sectors, especially from capture fisheries, which consolidates the sector.

Strong demand for aquatic products

Price and consumer’s income are generally the main determinants of demand for aquatic products. Other factors such as consumers’ tastes and preferences, price and availability of substitutes, eating habits and advertisement are also important. As indicated in Table 21, aquatic products, including aquaculture products are gaining popularity in China, as people’s living standards improve and the population gets increasingly health-conscious.

Table 21 indicates that consumption of animal products in China has been growing while that of non-animal products has been decreasing. The absolute and relative demand for fish and fishery products has been increasing, especially in rural areas. In 1985, the daily per capita consumption of fish and fishery products was 4.5 g in rural areas and 19.4 g in cities. In 1999, the consumption of these products grew to 10.5 g/person/day in rural areas and to 28.5 g/person/day in urban areas. This represents an average annual growth of 6.4 percent in rural areas and 2.7 percent in cities, or an overall average of 3.5 percent per year. The growth rate in fish and fishery products is only lower that the growth in the poultry consumption (6.5 percent in rural areas and 3 percent in urban centres, or 4 percent overall).

In relative terms, the importance of fish and fishery products in the Chinese food basket has also been increasing and grew faster than all other food items except poultry. In 1985, they represented 0.4 percent in the food basket in rural areas and 2.2 percent cities, or an average of 1.2 percent. In 1999, their share in the diet was 1 percent in rural areas and 4.2 percent in cities. This change represents an annual average increase of 6.8 percent in rural areas and 4.7 percent in cities, which is equivalent to an overall growth rate of 4.8 percent.

TABLE 21
Annual per capita consumption of fish and fishery products and other main food items from 1985 to 1999, China, 2002

Source: Adapted from China Statistical Yearbook, 1998, 2000.

The increase in the contribution of fish and fishery products in the diet occurred in spite of the decrease in the daily food intakes by the Chinese population. From 1985 to 1999, the daily per capita consumption of food items listed in Table 27 decreased from about 1 108 kg per person per day to about 1 043 kg per person per day in rural areas, and from 863 g per person per day to 674 g per person per day in cities. This decline represents an annual growth rate of -0.4 percent in rural areas and -1.7 percent in urban areas.

Major constraints and suggested solutions

Environmental degradation, disease outbreaks, limited improvement in seed supply and genetic conservation, limited expansion possibilities are the main constraints to further aquaculture development in China.

Environmental degradation

Water quantity and quality have increasingly become a limiting factor in aquaculture. China is a country short of freshwater and land. It is endowed with about 27 percent of the world per capita fresh and marine waters and 9 percent of the world arable land. Per capita arable land is estimated to a bit less than 0.09 ha (Li, 2000).

These resources are combined to produce more than 65 percent of the world aquaculture output and to feed about 25 percent of the world’s population. As a result, farm and production intensity have often exceeded the carrying capacity of many production ecosystems in some districts, causing serious self-pollution. A good illustration is in shrimp farming where producers ‘feverishly’ increased the post-larvae stocking and feeding rates to maximize profits. This development resulted in widespread outbreaks of shrimp diseases and poor water quality in certain parts of the country, notably in the south. Besides self-pollution, over production also depressed the prices of aquaculture products.

To protect and utilize all suitable waters for aquaculture, the production-oriented model of resources exploitation and production intensification should be improved. The major fish farming areas in the country should be re-examined and re-zoned for aquaculture or relocated based on land use capability. In other words, more advanced planning is required and the scale of farming and production intensity regulated or controlled according to environmental capacity. This requires development of environmental impact assessment methodologies, environmental standards for aquaculture effluent and water quality, and protocols and guidelines for aquaculture zoning.

Disease outbreaks

The loss of environmental quality has resulted in, among other things, increasing incidence of fish diseases year by year in the 1990s. Experts estimate the number of types of aquatic diseases to about 500. In the 1990s, losses due to fish disease outbreaks in China have been estimated to about US$1 billion annually. Although since then, preventive measures and a national fish health management programme have been put in place to prevent and/or control the diseases, these are yet to be contained.

Scientific assessment and early diagnosis, the use of improved water sampling technologies for aquaculture, comprehensive prevention and treatment measures for fish diseases especially the use of non-conventional treatments methods such as the use of probiotics and vaccine in lieu of antibiotics and animal health management can be used as complementary measures in attempting to resolve the disease outbreaks issue.

Limited improvements in seed supply and genetic conservation

As discussed in previous sections, since the late 1950s early 1960s China made good progress in fish seed production through the use of artificial breeding technologies. However, major achievements were recorded in carp breeding in the early 1980s. Genetic conservation efforts were initiated in the 1990s, suggesting the newness of the history of genetic conservation in the country. As a result, for most cultured species, especially marine species, seeds are still supplied from the wild. That is, from poorly known genetic material. In addition, because of the rapid aquaculture development which is brought about by, inter alia, the high demand for aquatic products, aquatic biodiversity is under tremendous stress.

To ease this constraint, there is a need to improve, strengthen and expand fish breeding programmes, further diversify cultured species and promote genetic conservation. In improving fish breeding and breeds, the Government could promote the exchange and careful introduction of fish from other countries, especially from the region. Diversification often requires this introduction of new or exotic species into the country, which should be purposefully carried out for the benefit of the people and local economy. These steps would be followed by the establishment and implementation of guidelines for the conservation of indigenous fish and aquatic genetic biodiversity.

Limited areas for expansion

Concerned about the declining natural marine fishery resources, in 1999, the Chinese Government has adopted to maintain a zero growth in aquatic products from capture fisheries policy. At the same time, it adopted a strategy of further increasing aquaculture output as a means of meeting the growing domestic demand for aquatic products. However, as discussed previously, land is very limited, fresh water is generally scarce, many production ecosystems including marine environments have exceeded their carrying capacity. This suggests that, although they exist, prospects for further aquaculture development are limited.

One of the strategies of expanding aquaculture output would be focus on new yield-enhancing technologies, with emphasis on the western region. The non-major aquaculture areas should be moderately and cautiously exploited, paying more attention to the responsible and sustainable use of the waters for fish production. To protect the country’s fragile ecology or environment, it is important not to attempt to blindly exploit marginal lands and waters as they provide valuable ecosystem services.

Insufficient organization and supervision of aquaculture enterprises

Although the structure of the aquaculture industry has somewhat improved under the country’s economic reform, there remains certain inherent shortcomings as far as the organization and supervision of the aquaculture enterprises are concerned. In particular, there are problems with State ownership of aquaculture enterprises, which the country’s economic reform has not adequately addressed. In these and other enterprises, the producers, the administration and the management are not sufficiently organized and supervised. Part of the reason is because the relationship between producers, farm managers and fisheries officials is still not very clear after the shift from commune-based system of production to one based on open markets. The new system is still in the experimental stage - in transition. As a consequence, the industrial operational efficiency level is not high, making it difficult to increase farm income. This results in decreased profits to the enterprises and benefits to the people and the country as it is difficult to run the business efficiently.

One of the approaches to easing this constraint would be to train farmers and managers in running market-economy based enterprises. The economic structure of the aquaculture industry in the country, in particular its ownership structure, could also be further improved.

Inadequate primary infrastructures and facilities

The primary fishery infrastructures and facilities, as well as the secondary supporting system are still not as adequate in promoting the further growth of the industry as they should be. Further, the industry also still lacks the scientific and technological capacity to fully utilize the results and findings of aquaculture research. This gives rise to a less than perfect or incomplete system of production in increasing the fertility and the fecundity of fish breeding, improving fish health management, disease prevention and treatment, market information and intelligence as well as products distribution. Similar difficulties are also encountered in fish processing, resulting in the lack of a more comprehensive utilization of the aquatic products harvested. There is also further room for improvement in improving the standards of seafood quality and supervision of quality assurance of fishery products.