Look at the $4.7 billion purchase in September of the pork producer Smithfield Foods by Shuanghui International Holdings Ltd. — the Chinese firm that counts Goldman Sachs among its backers — from the standpoint of the Chinese. As this century’s economic titan, they had to “take a position” in United States pork. China’s population of nearly 1.4 billion is not only growing rapidly but growing wealthier rapidly, and flattering us by emulating our consumption patterns (for better or worse) while having trouble replicating some our production systems.
China has notorious problems with food safety; urban Chinese consumers distrust the quality and safety of their own food system, and express clear preference for imported food when it is available. What to do when you are the largest pork supplier in China, you have production and quality problems, must meet the ravenous demand for more meat from hundreds of millions of paying consumers, and the international supply is abundant? You buy the world’s largest pork producer and processor, together with that firm’s vaunted supply chain, quality controls, brand value and consumer appeal.
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