It is however also significant that the gap in urban and rural consumption have narrowed in recent years. Rural beef consumption increased rapidly in recent years to reach 1kg per person in 2012, no doubt due to increased rural incomes and access to wider food markets. Urban consumption of beef and mutton decreased in 2012 due to rapid price increases (suggesting that beef consumption is not income inelastic) and due to tightening guidelines on banquets from 2013.
The survey data reports on in-home household expenditures / consumption, but not on out-of-home consumption in the hotel, restaurant and institution (HRI) trade. With increasing expendable incomes and shifting Chinese consumption preferences, this represents a major gap in the data. Beef is served in increasingly diversified Chinese menus (such as “sizzling iron beef”), in popular minority and regional dishes (hot pot, Xinjiang skewers, Hui Muslim noodles, Korean dishes) and in foreign restaurants in China (Japanese/Korean barbeque, Brazilian beef, American fattened beef), where beef is the major item on menus.
One way to estimate total consumption is through the “trade-balance method” (domestic beef production, plus net trade divided by the national population). There is shortcomings in the method because it is based on over-stated production figures and excludes informal trade. The calculations suggest national per capita consumption of 5.4kgs, and if illegal beef smuggling of 1 million tonnes is added to consumption, the figure would be 5.9kgs. That is out-of-home beef consumption is high, which conforms to expectations in China, especially for urban residents.
Some of these trends were tested in surveys conducted by several Chinese and US universities and reported in Bai et al. (2012) in Beijing in 2007, Nanjing in 2009 and Chengdu in 2010. The surveys were conducted in summer (which is not necessarily peak season), and in relatively developed cities (which may be higher than most cities). It suggests that overall beef consumption is high (6.5kg in Beijing, 4.5kg in Nanjing and 7.7kg in Chengdu) and that out-of-home consumption is significant (35% in Beijing, 34% in Nanjing and 31% in Chengdu). Overall beef consumption increases with income (is highest in the highest 1/3 quantile), but varies by place of consumption. In-home beef consumption is highest in the middle 1/3 quantile, and out-of-home consumption is far higher in the highest 1/3 quantile, suggested beef (and mutton) is popular amongst more wealthy Chinese when eating out.
Banqueting in China – where a lot of beef and mutton is consumed – was ubiquitous in the 2000s. Business people, government officials and indeed most upwardly-mobile Chinese can spend several nights of the week with banqueting. Activity in the food service industry (along with the luxury goods industry, foods like seafood, and border smuggling) has however dampened dramatically since anti-corruption measures were initiated by the Xi regime in 2013. There are now stricter regulations on the amount of banquets, invitees and business expense claims, that is reported in China to have dampened overall consumption, and may increase the relative importance of in-home consumption.
Beef market outlets, product and prices are of course highly variable. For example, generic beef may retail for Rmb50 in a wet market, fillets may retail for Rmb100 in a supermarket, and can easily convert into Rmb200 in a high-end restaurant (see Waldron, 2010). However, it is important to note that it is not possible to categorise beef outlets into discrete value segments. For example, larger wet markets often contain franchised stalls of abattoirs that sell more expensive branded product. There is an enormous range of restaurants and supermarkets, many of which buy generic beef from wet markets and then add services to mark up prices.
