"In the early 1980s, tea producers were state-owned businesses, and tea exports stood out. However, the exports became weak with the changing foreign trade situation—China shifted its export focus to light industrial products. Meanwhile, domestic demand was booming in some coastal provinces in south China, nurturing a great number of private tea businesses who nibbled away at state-owned enterprises and became the mainstream in China's tea industry," professional tea trainer Chen Chuping told Global magazine.

"The tea market became lively, but production ability deteriorated," said Chen. "Compared with the original state-owned enterprises, private businesses were smaller, less efficient and less well known. They had no competitive edge compared with foreign enterprises managing large tea plantations with mechanized production."

Though some private tea producers do export their products, they are restrained by regional policies that require enterprises with brand-name tea products to satisfy domestic need first. Their small scale and lack of long-term strategic planning have also limited these companies' exports, according to Chen.

Bottleneck

In recent years, developed countries have continuously changed their standards for inspecting tea. These fast-changing and complicated regulations have been challenging for China's tea exports.

"The international inspection method is different from that in China. The former checks dry leaf powder, but the latter checks tea-infused water," Wang added.

The key problem according to Wang is that worldwide production exceeds demand. The world needs about 3 million tons of tea each year, compared with the actual 3.5 million tons of output. The imbalance enables importers to erect barriers that keep prices low.

China faces more acute problems at home, before the tea even reaches the international market.

China's tea growers are mostly petty farmers who depend on manual labor. To make 1 kg of first-round tea, a worker has to pick 60,000 tea sprouts, producing a high labor cost. Tea companies are usually small with low-level processing methods. Most tea traders are individuals with low scientific knowledge.

This forms a striking contrast with foreign enterprises that adopt mechanized processing methods at a low production cost.

Furthermore, these small domestic enterprises have lacked research on tea in recent years and have no attraction to college students. In contrast, Britain's Unilever, the parent company of Lipton, offers scholarships for university students in China majoring in tea research to work for Lipton's research and development team. Unilever spends as much as 3.8 million pounds researching tea every year.

Low awareness

High quality tea in China is rarely known outside the country. In order to expand, the tea industry needs to open businesses both at home and abroad, Wang said.

China should focus on spreading its tea culture to promote its tea products to the world, though that is no easy task.

China also needs to invest more in research and development. Since few people in the United States will spend a lot of time to drink tea, related products such as teabags and instant tea should be developed to meet demand.

Wang noted that tea from China doesn't currently follow international practice in terms of structure, variety and drinking mode. In order to make its tea products better known and more acceptable in the world, China needs to tell consumers about the benefits brought by Chinese tea, and adjust its products to meet the habits and taste of its target consumers.

As people pursue healthier lifestyles, tea consumption is becoming more scientific. China has abundant tea varieties, and consumers may select them on the basis of scientific analysis. For instance, China's white tea sells well in the United States because American scientists found that elements from white tea are beneficial for people's health. Similarly, oolong tea enjoys brisk sales among housewives in Japan because tests have shown it breaks up fats.

Tea is a drinking habit product. Constant renovation is needed to adjust its taste. One way to boost exports is to introduce tea as an ingredient in other products, like green-tea ice cream.

China needs to hold onto its existing markets as it endeavors to open new ones. It can serve targeted clients, for instance, oolong tea to Japan, black tea to Southeast Asia as well as Hong Kong and Macao, green tea to countries in North Africa and the Middle East, and white tea to the United States.

In view of the wide variety of Chinese tea, which kind has the best prospects in the international market? "Puer (large-leafed, earth-flavored Chinese tea), produced in Yunnan Province, is believed to be successful in establishing its fame, because it meets the requirements for a established brand name--having a large quantity and boasting a well-known brand," said Chen.

"Some high-quality tea is produced in such small quantities it cannot even meet demand at home," Chen said. "This kind of tea has a high price the year it is produced, but will be worthless the next year."

(Source: Xinhua via Global magazine)