Bei­jing pre­pares to dis­solve an­cient grip on salt mar­ket

Kuwait Times - - BUSINESS -

From Sun­day, China’s long cam­paign to make sprawl­ing state-owned in­dus­tries more ef­fi­cient will stretch be­yond com­modi­ties like coal and steel into one of the most an­cient mar­kets of all - the salt trade. As of Jan 1, al­most 80 salt pro­duc­ers and traders from across China will be able to sell their wares in Bei­jing for the first time ever. The cap­i­tal is im­ple­ment­ing plans drawn up ear­lier this year by cen­tral gov­ern­ment to dis­solve a mo­nop­oly that goes back cen­turies.

As part of its lib­er­al­iza­tion com­mit­ment, the gov­ern­ment has said it will en­cour­age con­sol­i­da­tion among sales whole­salers and pro­duc­ers - there are more than 2,000 salt mak­ers in China, ac­cord­ing to the China Salt As­so­ci­a­tion - as well as the in­jec­tion of pri­vate cash into state-con­trolled firms. “The salt in­dus­try will be con­sol­i­dated in the com­ing years,” an in­dus­try reg­u­la­tor told Reuters, re­quest­ing anonymity. The reg­u­la­tor de­clined to say how many salt mak­ers might be merged or shut down.

Un­der new rules pub­lished by Bei­jing’s Mu­nic­i­pal Com­mis­sion of Com­merce this week, some 79 reg­is­tered traders from other prov­inces who will be al­lowed to en­ter the city’s mar­ket along­side 16 Bei­jing­based whole­salers.

The cap­i­tal is one of 13 cities and prov­inces stretch­ing from Tian­jin to In­ner Mon­go­lia that have re­ceived ap­proval from cen­tral gov­ern­ment to open up their ed­i­ble salt mar­kets to other re­gional pro­duc­ers and whole­salers who were pre­vi­ously re­stricted to op­er­at­ing in their lo­cal ar­eas. Other re­gions of China are await­ing the green light to do the same. The changes are de­signed to dis­man­tle price con­trols and dis­tri­bu­tion chan­nels in a busi­ness dom­i­nated by the state-owned China Na­tional Salt In­dus­try Corp, which had rev­enue of 21.25 bil­lion yuan ($3.1 bil­lion) in 2015, down from 32.43 bil­lion yuan a year ear­lier, ac­cord­ing to an on­line com­pany state­ment. One of its sub­sidiaries Bei­jing Salt In­dus­try Corp - cur­rently con­trols the cap­i­tal’s salt mar­ket.

Un­til now, salt pro­duc­ers have sold their wares to state-owned dis­tri­bu­tion com­pa­nies. China pro­duced 88 mil­lion tons of salt last year, 10 per­cent of which was ed­i­ble salt, ac­cord­ing to the China Salt As­so­ci­a­tion, the rest be­ing snow-melt­ing in­dus­trial salt. The gov­ern­ment has said it will mon­i­tor the mar­ket and in­ter­vene to sta­bi­lize prices if anom­alies oc­cur. The au­thor­i­ties will also en­sure stocks are avail­able to sup­port de­mand for at least one month. No new li­censes for pro­duc­ers or whole­salers will be granted to ed­i­ble salt mar­ket un­til the end of 2018, the cen­tral gov­ern­ment has said.

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.