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Business Culture of Chinese

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It is only in recent years that the post-Communist market has represented a tangible and actionable

opportunity for suppliers, producers, manufacturers and retailers. The overall Chinese food market value

exceeded US$242bn in 2005. There is particular focus from foreign investors on the potential of the Chinese

processed food industry in particular, which contributed 5.7% to the global processed food market and

generated more than US$166bn in 2005. A third of all food consumed by the Chinese is estimated to be

processed, with the lion's share of processed food being purchased in urban regions. With the relaxation of

tariffs and duties, the global food industry's interest in China now includes industries previously untouched by

foreign companies, such as food and drink. The growing interest in the internet and exposure to more targeted

advertising and marketing has led to the Chinese consumer being exposed to a rising number of new westernstyle brands and services. China is irrefutably attractive to food companies seeking growth through mergers,

acquisitions and expansion. Increased tourism is also starting to make its mark on the Chinese food industry.

The increasing affluence of China's "upper class", and more importantly, the developing and rapidly ascending

"middle class" indicate future opportunities and potential wealth for food companies. Research by the US

Department of Agriculture (USDA) indicates that foreign food and drink brands comprise about 5% of products

in Chinese mass grocery retail outlets, but many of them are still manufactured with local ingredients. The

presence of these goods represents interesting and challenging opportunities for international food ingredient

suppliers. Food safety continues to represent a major hurdle in such a vast and rapidly expanding market



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