Tariff policies help boost agricultural cooperation

Hu Mingyao (second from right), general manager of a local food company, explains the process of making Russian bread during a livestreaming program in Heihe, Heilongjiang province, in May. (QIU QILONG / FOR CHINA DAILY)

Tariff concession policies in Northeast China's Heilongjiang province, which borders Russia, are helping to fuel the expansion of the cross-border food processing industry.

Liangyun Agricultural Product Development Co is one of the food processors that have secured a spot in the province's Suifenhe Integrated Free Trade Zone, which was set up in 2009.

To make the most of the tariff reduction policies, the company grows 10,000 hectares of corn and soybean in a Russian coastal area and ships the raw materials to China.

The company then makes the produce into a range of products, such as fertilizers and cooking oil, and delivers them to clients in Harbin, the provincial capital.

Li Chengguo, chairman of Liangyun, said the arrangement helps reduce the tariff on their end products to just 4 percent, which is significant, given the company processes 400 metric tons of soybeans every day and produces 300,000 tons of fertilizer annually.

Tariffs for corn can reach as high as 65 percent if importers surpass an annual quota for the grain. "Such favorable policies enabled us to speed up our production," he said.

Pan Hongqiang, general manager of the company, said the demand for fertilizer was so great in the run-up to Spring Festival in January that the company's production capacity was overwhelmed.

Before the weeklong national holiday for Chinese New Year ended, the company called employees back to work to increase production, he said in an interview with the local news website dbw.cn.

Liangyun is not alone in riding the wave of cross-border trade.

Asia-Pacific Economic and Trade Co, a processor of sea cucumbers and other seafood, runs a fishing operation near Sakhalin Island, Russia.

Another company, Fuwang Food, buys flour in Russia and uses it to produce noodles that are packaged in Suifenhe.

Other agri-products processed in the free trade zone, which spans 18,000 square kilometers, include cookies and cooking oil.

The expansion of the cross-border food processing businesses is part of broader efforts by Heilongjiang, a major grain-growing area, to open up its agriculture sector and promote cooperation with Russia, which has large areas of farmland.

A recent report published in Heilongjiang Daily said the province has seized the opportunities brought by the country's Belt and Road Initiative, of which Russia is a participant, and has reaped great benefits.

The report said that the province is among the largest beneficiaries of China-Russia agricultural cooperation, and the cooperation has expanded in recent years from just grain growing to animal husbandry, fertilizer processing, storage and logistics.