U.S. beef exports to Hong Kong in 2007 increased 206% over 2006 levels, reaching 9,635 mt – with exports still limited to boneless beef from cattle less than 30 months of age.  The much anticipated resumption of U.S. beef trade to Mainland China was not realized in 2007; however, it is believed some frozen U.S. beef and offal entered into China from third country markets. U.S. beef shipments to Hong Kong for the first seven months of 2008 have shown a slight drop, which reflects a decrease in transshipments. The absence of U.S. beef from the Mainland China market since the end of 2003 has led to the development of more grain-fed beef programs in China. Australia has also taken advantage of the absence of U.S. beef to make market share gains, especially in the hotel and retail sectors.  Australia Wagyu also gained a foothold in the niche high end market (especially in Hong Kong), supplanting to some extent the demand for U.S. prime product. 

China/Hong Kong was the largest growth market for U.S. pork exports in 2007, with a 91% increase in exports over 2006 levels, reaching 169,160 mt valued at $271 million. This represented 12% of all U.S. pork exports. Despite the growth, it was a challenging year for U.S. exporters as the market was seriously disturbed by a shortage of Chinese pork, and the ractopamine issue created new access problems. While there has been no official resolution to the ractopamine issue, China remains a lucrative export market for suppliers of ractopamine-free product. During the first eight months of 2008, China/Hong Kong was the largest volume export destination for U.S. pork products, reaching 307,903 mt, an increase of 249% over the same time period in 2007. Increasing domestic hog supply, large stocks of imported pork, and anti-inflationary releases of U.S. pork from the China’s strategic reserves have already driven prices down. Import demand is expected to soften for the remainder of 2008, however high production costs in China will translate into a long-term increased competitiveness of imports in the foreseeable future.