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China wakes up to the need for a greener diet



For Jian Yi, founder of campaigning organisation the Good Food Fund, China’s understanding of food systems is where its awareness of the environment was a decade ago. Initially mundane discussions on how to clean up litter or avoid the harmful impact of smog rapidly grew into a broader debate about building sustainable ecosystems. 

The award-winning documentary film-maker sees a similar turning point approaching for food in China — with a pivot away from narrow concerns about food safety, sparked by scandals involving tainted milk powder, “gutter oil” and rotting meat, to how to transform food systems. “We are currently trying to connect the dots for people to convey that this is a global problem that requires a solution in China,” he says. 

The pandemic has spurred scrutiny of China’s wildlife trade and urban markets, where the novel coronavirus virus first appeared, and prompted Chinese environmentalists to call for a wider reflection about humans’ relationship with nature.

China’s leadership has also prioritised food and the environment. In August, President Xi Jinping stressed the need to strengthen food security as he relaunched “Operation Empty Plate”, a campaign to tackle waste. In September, he surprised the UN by pledging that China would be “carbon neutral” by 2060.

Campaigner Jian Yi thinks China is nearing a turning point in its attitude to food

A key task for advocates of food sustainability like Mr Jian is to make policymakers appreciate the relationship between these currently siloed issues. Last week, his three-year-old organisation held its fourth annual summit, where 30,000 online attendees could hear lectures on the relationship between food systems and climate change, and watch livestream footage from organic farms in southwest China.

The event also included the launch of the Good Food Pledge, where partners including local governments, restaurants and companies set sustainability goals in line with the UN’s by 2030. Participants’ efforts are recognised through a certification scheme. “We want to help partners find an incentive,” Mr Jian says.

The Good Food Fund operates under the China Biodiversity Conservation and Green Development Foundation, a government-backed non-profit. That gives it a degree of influence within the country’s political system.

Diners in a Beijing restaurant. President Xi Jinping has urged consumers to avoid food waste © Kevin Frayer/Getty Images

Meat or veg?

Pushing for change at the institutional level, rather than making grassroots efforts to change consumer behaviour, is a relatively new approach for China’s food sustainability movement. Mr Jian previously worked more with China’s vegan communities and released a documentary called What’s for Dinner?, an uncomfortable exploration of livestock farming.

While a vegan himself, Mr Jian has attempted to build a bigger audience for his organisation. One idea he has had is to tap into China’s national obsession with food, working with top chefs to design plant-based menus. He is also following in the footsteps of US universities such as Yale to bring food sustainability into China’s elite educational institutions.

China’s traditions and social norms are not always helpful. Vegetarianism and veganism are still relatively uncommon compared with more developed countries. Although many regions have traditionally used meat sparingly in their cooking, animal protein is still frequently seen as essential to a healthy diet, while ready access to expensive meats confers social status. 

A worker in Sichuan pushes butchered pigs into a cooler. About one-third of the world’s meat is eaten in China © China Photos/Getty Images

The country accounts for nearly a third of global meat consumption, and the per-capita amount is growing — an ominous development, given the meat industry’s contribution to carbon emissions and other environmental harms.

The government has been encouraging the population to cut down on daily meat intake, with dietary recommendations last updated in 2016 recommending a total of 120-200g of animal protein per day. What may help is that consumers appear to be receptive to alternatives, with one survey finding that 62 per cent are open to buying more plant-based meat.

This openness may come in part from the influence of a sizable Buddhist community that, in striving not to harm animals, has popularised the use of fungus- and soya-based meat alternatives. Tofu is also a common part of Chinese cuisine, often appreciated in its own right rather than merely as a meat substitute. Meanwhile, plant-based milk alternatives — derived from soya, walnuts, almonds, coconuts and peanuts — have found a vast market, owing to a high incidence of lactose intolerance.

Data provider Euromonitor estimates that China’s plant-based meat market had sales of about $10bn in 2019, a figure projected to reach nearly $13bn by 2023. As a result, US-based Beyond Meat has entered the Chinese market to take on local rivals like Shenzhen-based Qishan Foods (or Whole Perfect Foods in English) and start-up Zhenmeat (Treasure Meat).

Matilda Ho, managing director of Shanghai-based agriculture and food tech venture capital fund Bits x Bites, says the real opportunity lies in bringing novel alternative protein sources such as chickpeas to Chinese consumers, as interest in moving beyond traditional soy-based products has blossomed in the past year.

“A lot of existing [plant-based protein] brands under-deliver on nutrition,” she says. “A lot of them are really rich in sugar and fat, which does not appeal to the younger generation that is looking for healthier alternatives.” She expects compound annual growth for the sector to continue at about 10-15 per cent over the next decade, a rate maintained since 2014.

For Mr Jian, the excitement around plant-based meat helps raise awareness but can only be a part of the solution. “People in China have long accepted the centrality of plants in their diet,” he says. “We just need to give them the tools to act upon that belief.”

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Emerging Markets

Bond sell-off roils markets, ex-Petrobras chief hits back, Ghana’s first Covax vaccines




The yield on the benchmark 10-year Treasury exceeded 1.5 per cent for the first time in a year and the outgoing head of Petrobras warns Brazil’s President Jair Bolsonaro against state controlled fuel prices. Plus, the FT’s Africa editor, David Pilling, discusses the Covax vaccine rollout in low-income countries. 

Wall Street stocks sell off as government bond rout accelerates

Ousted Petrobras chief hits back at Bolsonaro

Africa will pay more for Russian Covid vaccine than ‘western’ jabs

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Petrobras/Bolsonaro: bossa boots | Financial Times




“Brazil is not for beginners.” Composer Tom Jobim’s remark about his homeland stands as a warning to gung-ho foreign investors. Shares in Petrobras have fallen almost a fifth since President Jair Bolsonaro said he would replace the widely respected chief executive of the oil giant.

Firebrand Bolsonaro campaigned on a free-market platform. Now he is reverting to the interventionism of leftist predecessors. It is the latest reminder that a country with huge potential has big political and social problems.

Bolsonaro reacted to fuel protests by pushing for a retired army general to supplant chief executive Roberto Castello Branco, who had refused to lower prices. This is politically advantageous but economically short-sighted.

Fourth-quarter ebitda beat expectations at R$60bn (US$11bn), announced late on Wednesday, a 47 per cent increase on the previous quarter. This partly reflected the reversal of a R$13bn charge for healthcare costs. Investors now have to factor the cost of possible fuel subsidies into forecasts. The last time Petrobras was leaned on, it set the company back about R$60bn (US$24bn at the time). That equates to 40 per cent of forecast ebitda for 2021.

At just over 8 times forward earnings, shares trade at a sharp discount to global peers. Forcing Petrobras to cut fuel prices will make sales of underperforming assets harder to pull off and debt reduction less certain. Bidders may fear the obligation to cap prices will apply to them too.

A booming local stock market, rock bottom interest rates and low levels of foreign debt are giving Bolsonaro scope to spend his way out of the Covid-19 crisis. But the economy remains precarious. Public debt stands at 90 per cent of gross domestic product. The real — at R$5.40 per US dollar — remains near record lows. Brazil’s credit is rated junk by big agencies.

Rising developed market yields will make financings costlier for developing nations such as Brazil. So will high-handed treatment of minority investors. It sends a dire signal when a government with an economic stake of just over a third uses its voting majority to deliver a boardroom coup.

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South Africa’s economy is ‘dangerously overstretched’, officials warn




South Africa is pushing ahead with plans to shore up its precarious public finances as officials warn the economy is “dangerously overstretched” despite the recent boom in commodity prices.

Finance minister Tito Mboweni hailed “significant improvement” as he delivered the annual budget on Wednesday and said that state debts that will hit 80 per cent of GDP this year will peak below 90 per cent by 2025, lower than initially feared.

But Mboweni warned that President Cyril Ramaphosa’s government was not “swimming in cash” despite a major recent tax windfall. The Treasury now expects to collect almost 100bn rand ($6.8bn) more tax than expected this year after a surge in earnings for miners. This compares with a projected overall tax shortfall of more than 200bn rand. Still, the finance minister made clear that spending cutbacks would be necessary.

“Continuing on the path of fiscal consolidation during the economic fallout was a difficult decision. However, on this, we are resolute,” Mboweni said. “We remain adamant that fiscal prudence is the best way forward. We cannot allow our economy to have feet of clay.”

The pandemic has hit South Africa hardest on the continent, with 1.5m cases recorded despite a tough lockdown. An intense second wave is receding and the first vaccinations of health workers started this month. More than 10bn rand will be allocated to vaccines over the next two years, Mboweni said.

‘We remain adamant that fiscal prudence is the best way forward’ – South African finance minister Tito Mboweni © Sumaya Hisham/Reuters

Even before the pandemic’s economic hit, a decade of stagnant growth, corruption and bailouts for indebted state companies such as the Eskom electricity monopoly rotted away what was once a prudent fiscus compared with its emerging market peers. 

Government spending has grown four per cent a year since 2008, versus 1.5 per cent annual growth in real GDP. The country’s credit rating was cut to junk status last year. Despite this year’s cash boost, the state expects to borrow well over 500bn rand per year over the next few years. The cost to service state debts is set to rise from 232bn rand this year to 338bn rand by 2023, or about 20 cents of every rand in tax.

The fiscal belt-tightening will have implications for South Africa’s spending on health and social services. On Wednesday Mboweni announced below-inflation increases in the social grants that form a safety net for millions of South Africans. “We are actually seeing, for the first time that I can recall, cuts in the social welfare budget,” said Geordin Hill-Lewis, Mboweni’s shadow in the opposition Democratic Alliance.

The finance minister is also facing a battle with union allies of the ruling African National Congress over a plan to cap growth in public sector wages. South Africa lost 1.4m jobs over the past year, according to statistics released this week. The jobless rate — including those discouraged from looking for work — was nearly 43 per cent in the closing months of 2020.

The South African treasury expects the economy to rebound 3.3 per cent this year, after a 7.2 per cent drop last year, and to expand 2.2 per cent and 1.6 per cent next year and in 2023 — growth rates that are widely seen as too low in the long run to sustain healthy public finances.

“The key challenges for South Africa do however persist, clever funding decisions aside,” Razia Khan, chief Middle East and Africa economist for Standard Chartered, said. “Weak structural growth and the Eskom debt overhang must still be addressed.” 

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