The State of China and Belgium Trade - Essay Sample

Introduction

According to Swinnen (2017), China is among the top consumers of Belgian beers in the larger Asian market. A report by Joseph (2018). I have compared the rate of imports of Belgian beers between Japan and China. It was evident that China exported more Belgian beers as compared to Japan. The Federation on the import of Belgian beers suggests that in 2014, China imported approximately 162, 751 hectoliters. These figures suggested an increase of approximately 140% as compared to the previous years (69, 456 hectoliters) and 17,138 hectoliters.

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The figures suggest a rapid increase in the export of Belgian beers to China, which for the first time, exceeded that of Japan. The figures also indicated that China is the third largest export market for Belgian beer. The most famous Belgian beer brands in the Chinese market are Stella Artois, Duvel, Hoegaarden, and Leffe. Similarly, Joseph (2018) explained that Sedrin and Harbin (two significant brands of Chinese beer) have fully been redeemed by the Anheuser-Busch (Swinnen, 2017).

Swinnen (2017) observed that the Chinese beer market is full of potential for growth. The potentiality is due to the large Chinese population. There is love for beer due to the Chinese beer tradition. China also prides itself with tremendous economic growth, especially the middle-class population. Such people have great taste for foreign beers which are quite costly in the market as compared to the available beers in the Chinese market. The availability of Belgian beer into the Chinese market provides the consumers with a different taste and experiences.

Joseph (2018) observed that China is in the process of achieving significant economic growth since the Chinese population and the Chinese government is becoming more open-minded about the consumption of foreign beers. As a result, the trade relations between Belgium and China is becoming closer, and the exchanges between the two countries are becoming too frequent. Garavaglia and Swinnen (2017) explained that such relations are likely to promote the sales of Belgian beers in the Chinese market. In contrast, the Belgian market experienced a sharp decline in the consumption of the local Belgian beer for the last 20 years (Garavaglia & Swinnen, 2017).

A report by Li, Shi, Boswell, and Rozelle (2018) observed that approximately forty years ago, the Belgian population consumed beer during special occasions with their families. Currently, people only consume water and soft drinks when they are with their families. The Belgian population has been provided with a variety of choices for consumption. It is also evident that the Belgians have changed their consumption behaviors, especially in drinking beer. Their drinking habits have changed, and they consume beer less frequently. Raube, Muftuler-Bac, and Wouters (2019) observed that the Belgians drink less, and also in a different manner due to a shift in focus to more special beer brands. They also drink beer for their qualities. The trend is as a result of the fact that the Belgians primarily focus on their wellbeing and health. The Belgium brewers, however, focus on the combination of tradition and diversification of beer. The beer is of great potential, and this is why it has achieved more significant sales in the Chinese market.

International Trade Policy between Belgium and China

According to Richter and Richterova (2017), the trade relationship between Belgium and China relies on sound resilient growth since 2013. The critical character of the relation is the various exchanges and cooperation in all the fields between the two countries. Belgium and China are two countries with close trade toes. Concerning this, Li et al. (2018) observed that the two countries enjoyed the free high-level substantial political trust and mutual visits. For instance, Ji Binxuan (NPC Vice Chairman) visited Belgium at the head of the delegation between 24th and 17th September 2013. During the visit, he managed to separately meet the Deputy Prime Minister, the President of the Chamber of the Deputies, Minister of Economy and the agricultural minister. He managed to exchange his opinions, views, and perceptions with them concerning the bilateral relations between Belgium and China, and the exchanges between the legislative bodies about trade, agricultural cooperation, economy and the relationships between Europe and China (Li et al., 2018).

The Vice Premier of China, Ma Kai also managed to visit Belgium. One such instance was on 25th October 2013 where he managed to meet Alexander De Croo (Deputy Prime Minister and Pension Minister). He also got a chance to meet the finance minister, Koen Geens.

The Director of the General Administration of Sport, Liu Peng also visited Belgium on31st May 2013. During the visit, he got the opportunity to meet Pierre Oliver Beckers Vieujant (the chair of the Belgian Olympic Committee). The Belgian Prime Minister (Elio Di Rupo) also attended the 7th Summer Davos Forum in Dalian, China.

The few examples highlighted above suggest that the two countries have close relations politically, economically, and socially. Raube et al. (2019) explained that Belgium is China's sixth largest trade partner in the larger European Union. On Belgium's side, China is the second largest trade partner outside the larger European Union. In line with this, the actual cooperation between these two countries, and their trade relations steadily developed. Raube et al. (2019) further explained that the two countries embarked on bilateral trade, which began to reverberate after coming out from the adverse impact of the economic crisis. Business relations between the two countries operated on a resilient need to closely cooperate and engage in two-way investment. One of the cases was on 23rd June 2013, where a delegation of the Chinese Entrepreneur Club visited Belgium. The team managed to meet the Belgium Prime Minister Elio Di Rup. Queen Mathilde of Belgium was also in attendance of the Business of Design Week activities which took place in Hong Kong. During the economic exhibition, Belgium acted as a close partner country.

Richter and Richterova (2017) explained that close ties developed between the two countries. The relation consisted of cultural exchange and people to people. Other areas of close relations between China and Belgium consisted of agriculture, science, and technology among various others. One of such trade ties includes the Agreement on the Conservation on Research of Giant Panda in Dalian (the pact between PairI Daiza Park in Belgium and China Wildlife Conservation Association); and Memorandum of Understanding on the Establishment of China Cultural Center of China in Belgium which was signed on 10th October 2013. There was also a conference which was held in Brussels on Living the Chinese Taoist Temple's Rhythm of Life: Chinese Taoist Festival.

These, among other recent events, depict the close relations between China and Belgium. The close relations between the two countries keep on expanding due to the diverse exchanges between the two countries. For instance, delegations between the two countries conduct visits on various occasions, some of which have not been highlighted. The two countries have established close sister relations.

China Beer Market Insights

According to Richter and Richterova (2017), the Chinese beer market experienced rapid growth. The market has also seen an expansion (especially in the craft beer market). Richter and Richterova (2017) observed that the Chinese consumption rate of beer stands at 29.9 liters in 2019. The same figures suggest that individuals spend an average of $42.53, which is generated revenue. Currently, the beer sector in the Chinese market generates approximately $60, 392m in 2019 (Richter & Richterova, 2017). In line with the total population figures, there are projections that the market is likely to experience steady annual growth of 1.3%.

Chinese Beer Market Share (2019)

POKRIVCAK et al. (2019) explained that beer consists of fermented beverages extracted from malt. These are combined with an alcoholic content of over 0.5% with other drinks mixed with beer. There are various brands of beers which are provided to the consumers using bottles and tap. The rise in beer consumption rate due to increased spending suggests an influx of demand for such beer products. These are crucial stimulators of the beer market growth. The structure of the beer market consists of in stores and on trade sales. In stores are examples of off-trade sales, while on-trade sales consist of restaurants, bars, clubs among others. Within the Chinese market, there exist different beer flavors with attractive packaging. These are mostly premium beer products. The market is highly competitive, and as a result, the key market players are the ones who have launched attractive packaging to appeal to the potential clients. The aim is also to enjoy a more substantial market share of the beer products in the market. Garavaglia and Swinnen (2017) explained that China is the largest global beer consumer. Belgium is one of the countries that export beer to the Chinese market.

Currently, Richter and Richterova (2017) provided an approximation of 1.4billion Chinese population. Richter and Richterova (2017) Observed that beer is one of the top alcoholic beverages which the Chinese citizens consume. The country is also among the most exciting beer markets concerning the growth in the spirits and drinks sectors. There is, however, an increased interest in imported beer in the Chinese market. Richter and Richterova (2017) Indicated that the Chinese beer market totals to approximately $60, 392m in 2019. The sale of beer in the Chinese market averagely amounts to$1.42 in 2019. Richter and Richterova (2017) further asserted that the sale of beer in China by volume would amount to 43971.1 by 2023.

E-Commerce: Imported Beer Consumption in China

Poelmans and Swinnen (2018) Asserted that e-commerce is a popular method of sales, especially among the Chinese, about purchasing of imported products. There are three essential types of shopping avenues which are common among the Chinese population about online sales. These include cross border channels: horizontal platforms and vertical platforms.

According to POKRIVCAK et al. (2019), cross-border channels involve the direct purchase of online items. It is a common way through which the Chinese population access the beer products. The mode of sale is beneficial to the Belgium traders as part of the global companies entering a new market to test the reactions of the consumers in the market to a particular product.

POKRIVCAK et al. (2019) Further explained that horizontal e-commerce platforms involve the sale of imported beer such as Belgium beer in large quantities in specific categories to enable the Chinese to find what they need appropriately. Vertical platforms, on the other hand, are primarily concerned with more educated individuals, more so if the specific brand being sold is famous. The Belgian beer is vended in retail platforms in the Chinese market in known places such as Tmall Global, Tmall, and JD. Vertical platforms that vend the Belgian beer in the Chinese market include ichinabeer and Jiuxian.

Best Vendors for Belgian Beer

Richter and Richterova (2017) provided a list of best sellers for the Belgian beer in the Chinese market. The beers included Hoegaarden, Trappisters Rochefort and Corona which are a mix of Belgian craft beers. These beers are majorly folded at Tmall, which primarily focuses on imported items. The mall provides the beer consumers with an opportunity to access items, and purchase them as a group or individually. The advantage of purchasing the beer from such vendors is that it provides the consumer with an opportunity to acce...