China offshore aquaculture set for 2022 as investments dry up

An offshore aquaculture system being built by two powerful Chinese state-owned corporations off the east Chinese coast will enter into service in 2022. 

China State Shipbuilding Corp (CSSC) has been contracted by Qingdao Guoxin Development Group, a state investment vehicle and real estate developer in Qingdao, to build a 100,000-ton platform to be docked in the Yellow Sea. The system, which is being marketed as “high tech, automated and low-emission” and was on display in model form at a recent marine services exhibition in Qindgao.

China’s fragmented aquaculture sector looks set to be changed with the offshore ambitions of big players like the Guoxin Group, which financed and built key Qingdao infrastructure projects including the city’s subway system, as well as key office and industrial properties. 

Despite all the upbeat talk on offshore aquaculture in China – and undisputed future growth in demand for seafood – it appears that investment into agriculture and fisheries has collapsed over the past year.

Fixed asset investment in what the NBS categorizes as "farming, forestry and fishery" fell three percent year on year in the first eight months of 2019, according to the National Bureau of Statistics (NBS). There was a 9.4 percent fall in investment into "primary food processing," while investment in "food manufacturing" was down 2.2 percent.

The dismal figures might have something to do with the dire financial state of some of the country’s key agricultural enterprises due to the ongoing African swine flu epidemic – given that pork remains China’s most consolidated protein industry. Debt has mired Dabeinong, one of the country’s leading producers of animal (and fish) feed, which saw its profit fall 31 percent in the third quarter to CNY 302 million (USD 42.7 million, EUR 39.1 million) while debt surged 380 percent to CNY 357 million (USD 50.56 million, EUR 46.2 million).  

Meanwhile, in Fujian Province, the latest closure of aquaculture facilities will see 580 hectares of shellfish and shrimp production closed by the end of 2020 in the latest of a series of government-enforced shut downs to protect mudflats and wetlands. 

Near and off-shore aquaculture has been identified by Guoxin as an investment target. The firm has been constructing artificial coral reefs and inserting aquaculture cages into the waters off Qingdao as part of a CNY 6 billion (USD 856 million, EUR 777 million) investment that will include hatcheries, cold chain logistics as well as a related tourism projects on adjacent islands off the coast of Qingdao. 

In a further sign of major Chinese corporate interest in the area. CSSC in January said it had an order book for USD 1.2 billion (EUR 1 billion) for 36 new ships –among them “intelligent marine fishers and aquaculture ships.”  

Image courtesy of Wikimedia Commons