CHINA – Chinese companies are preparing to request an “anti-subsidy” investigation into imports of certain dairy products from the European Union (EU).

This development, reported by the state-affiliated Global Times and cited by Reuters, reflects escalating trade tensions between China and the EU.

The report, based on information from an unnamed industry insider, did not provide specific details on which dairy products might be targeted or the timeline for the proposed investigation.

However, the backdrop to this move included a notable decline in EU dairy exports to China, which dropped from €2 billion in 2022 to €1.7 billion in 2023, according to data from the European Commission’s Directorate-General for Agriculture and Rural Development, citing Eurostat.

The potential investigation aligned with a broader pattern of increasing trade disputes between China and the EU.

Earlier this year, China launched an investigation into EU-branded brandy imports and the EU has been scrutinizing various Chinese imports, with potential tariffs on the horizon.

Additionally, in May, Chinese firms sought a probe into EU pork imports, indicating a broader strategy of addressing perceived imbalances in trade practices.

China’s dairy market is one of the largest globally and the leading importer of dairy products. Despite facing disruptions in demand and pricing in 2022, the sector is projected to stabilize and resume growth.

The increased health awareness among Chinese consumers, partly a consequence of the COVID-19 pandemic, has driven this growth.

Government initiatives like the ‘School Milk Programme’ and the Healthy China Initiative (2019–2030) have further encouraged dairy consumption, boosting consumer confidence in dairy products.

Despite its growth, China’s dairy consumption per capita remains significantly lower than in the EU. The Chinese government has actively promoted milk consumption for its health benefits, particularly emphasizing its immune-boosting properties since the onset of the pandemic.

The Chinese dairy market is highly competitive, with rapid changes among market players and consolidation by larger brands in various segments.

As Chinese companies gear up for this potential anti-subsidy investigation, the outcome could further complicate trade dynamics between China and the EU, impacting the competitive landscape of the global dairy market.

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