This Chinese export boom really has legs – and wings

China’s rapid expansion of chicken production is flowing into new markets and threatening established producers

• By Daphne Zhang, Ella Cao and Lewis Jackson / Reuters, TENGZHOU, China

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In an office reeking of cigarettes, Dang Yangyang (黨洋洋) slouches on a black leather sofa in exhaustion. The general manager at Wintop Food (山東春藤食品有限公司) has spent the past few days chaperoning clients from Ghana, Iraq, Jordan, Russia and Senegal. They all want the same thing: Chinese chicken.

Wintop processes 60 million chickens annually, selling breasts, nuggets, meatballs and dumplings to more than 20 countries. Exports accounted for half of its profits last year and are underwriting 33 acres of expansion.

“International clients used to distrust the quality,” Dang said during a tour of his facilities in August. “But when the meat is US$1,000 cheaper per ton than Brazilian and Thai competitors, they have to either buy from China or lose out.”

The company is part of a wave of Chinese protein producers overcoming the country’s checkered food-safety record and leveraging additional capacity to seize space on global supermarket shelves. Changing diets at home and Beijing’s emphasis on food security have pushed companies to invest in technology and expansion. Now, they produce more than China can consume and are offloading excess production abroad.

The surge in cheap Chinese protein is drawing scrutiny from Western producers and regulators, signaling fresh trade friction. The pattern echoes Beijing’s strategy in steel, solar panels and electric vehicles — flooding markets with low-priced products that undercut global rivals.

In July, the European Commission launched an anti-dumping probe into Peking duck imports after local producers alleged Chinese subsidies created unfair competition. Last month, the commission imposed anti-dumping duties of between 41 percent and 67 percent on Chinese pea protein. Chicken has so far avoided the same action, although European authorities are monitoring the market, a commission spokesperson said in an interview.

Agriculture and food are among the few categories where China still runs a trade deficit. At just more than US$100 billion last year, the gap is massive but shrinking.

China, already the world’s largest source of seafood exports, last year became a net exporter of chicken. Overall, China exported US$2.6 billion worth of chicken products last year, almost double 2020 levels, customs data show. Dairy exports are on track to hit US$600 million this year, doubling in three years.

For global consumers, the trend means cheaper protein. For foreign producers from Europe to Thailand and Brazil, it means new competitors.

China’s shift from buyer to emerging exporter is having a “disruptive” effect on the global meat market, said Michael Boddington, a Beijing-based agribusiness consultant.

In Asia, he said, shipments traditionally flowed in from Europe and the Americas. Now, there is a cheaper alternative — and producers globally are scrambling to compete.

China’s agriculture and commerce ministries did not respond to Reuters questions about the country’s burgeoning protein exports.

URBANITES SHUN PORK

For decades, protein in China meant pork. Pigs fed the workers who built the cities and staffed the factories that powered the country’s economic boom. China became home to half the world’s hogs, whose appetite for grain, especially soybeans, redrew trade flows from the US Midwest to Brazil.

The country’s appetite for pork provided livelihoods for small farmers such as Huang Weiying, who started raising pigs in her village in Hebei province 20 years ago, owning more than 500 at a peak.

That era is over. When reporters visited Huang in August, she was tossing slop to her last 10 hogs in a cobweb-covered barn. About US$75,000 in debt, she planned to slaughter them by autumn.

“I have been raising pigs for over two decades, but it has never been as hard as the last two years,” Huang, 57, said. “Pig prices are so low. People in the cities just stopped eating pork.”

The fatty pork cuts common in traditional Chinese cuisine have fallen out of favor with health-conscious urbanites. Per-capita pork consumption has fallen 13 percent since peaking in 2023, according to official data and state media. Chicken intake rose more than 50 percent per capita in the decade through 2024.

Yet production kept expanding across China’s meat and dairy sectors. Officials encouraged massive buildout with subsidies targeted at large corporate producers to boost food security and rebuild herds after the 2018 African swine fever outbreak and the COVID-19 pandemic. Subsidies accounted for about 13 percent of Chinese agricultural producers’ gross farm receipts between 2022 and 2024, according to the OECD — almost triple the level in the early 2000s.

Today, subsidized farms are contributing to overcapacity. Production has hit new highs despite an economic slowdown, tepid domestic demand and a shrinking population, government data show. Last year, China produced a record 59 million tonnes of pork; poultry output rose 7 percent. The dairy sector surpassed official targets for 2025 production two years early.

Pork prices are hardest hit because domestic demand is weakest, but prices have also fallen for poultry and dairy.

MOVING OVERSEAS

For the large producers who increasingly predominate, the way out is exports.

“Every Chinese livestock company is planning to expand overseas. If you want to grow, you must go abroad,” said Zhang Yuan (張源), head of baby formula marketing at dairy giant Yili (伊利集團), which plans to start selling formula in Southeast Asia as soon as next year.

It is a symbolic step for Asia’s largest dairy company, which had milk products pulled in a 2008 government crackdown after melamine contamination sickened thousands of babies. The scandal turned consumers away from domestic milk for more than a decade. However, Yili baby milk powder is now the top-selling brand in China.

Yili’s competitor, Feihe, launched its AceKid infant formula in Indonesia in April to compete with Nestle and Mead Johnson, after bringing the product to the Philippines a year earlier. Feihe did not respond to requests for comment.

Poultry producers are walking a similar path. At Wintop, in Shandong province, manager Dang has increased the number of chickens in each shed from 20,000 to 120,000 in a decade. The birds weigh 2.5kg on average – compared with 2.2kg for broilers from Brazil, according to S&P Global. They are slaughtered in under 42 days instead of 45, catching up to the 35-day US standard.

The local Tengzhou (滕州市) government is subsidizing the wage bill for Wintop’s more than 2,000 workers, the company said without offering specifics. Tengzhou authorities did not respond to a request for comment.

Rival processors such as Sunner are relying on higher-value processed products such as marinated chicken and ready meals to drive growth. Its overseas sales rose 42 percent to US$135 million last year.

Sunner said it is expanding the global presence of its breeds by working with countries including Uzbekistan to develop local capacity. The company developed China’s first domestically bred white-feather broiler and has begun selling it in Africa and Central Asia.

TOUGH COMPETITOR

As Chinese producers go abroad, they are grabbing market share from established players. Chinese milk powder competes with products from New Zealand and Europe in countries including Nigeria and Bangladesh, and is displacing Indian and Iranian producers in the Middle East, according to Yifan Li (李一凡), dairy analyst at commodity broker StoneX.

China has doubled its share of the EU processed-poultry market to 10 percent since 2022, and tripled its share in the UK to more than 14 percent, according to data from Gira, a food consultancy. That growth is challenging producers such as Germany. China’s share of the Japanese market is edging higher while the leader, Thailand, is slipping.

“It’s very worrying,” said Kukrit Arepagorn, manager at the Thai Broiler Processing Exporters Association, an industry body. “Customers increasingly use cheap Chinese chicken prices as a reference point for negotiation.”

Ezequiel Pires, chairman of Lisbon-based international meat trader Branexx, said his company began buying Chinese poultry in March after African customers sought cheaper alternatives to Brazilian imports. Chinese breast meat and leg quarters are 10 percent to 20 percent cheaper than Brazilian products, Pires said.

China has not fully shaken some of the negative associations arising from persistent food-safety scandals, analysts say. For its exporters, the challenge is to build “lasting confidence in the safety, traceability and consistency of their products,” said Gordon Butland, director at Bangkok-based G&S Agriconsultants.

In the EU, imported food must meet the same health and safety standards as local produce, the European Commission said. The bloc plans to strengthen EU-origin labeling, starting with poultry products next year.

Some clients prefer Thai poultry for its consistent taste and quality, said Rupert Claxton, meat and livestock director at Gira.

Still, for many customers, China’s lower price point is key.

“We’re exporting to whatever countries we can,” Wintop’s Dang said. “If you have a significant price advantage, many customers actively seek you out.”