Chinese food firms look abroad to improve image

It is a commonly held view that many Chinese food makers have much to accomplish in terms of quality management, technological capability and brand image.

The recent deals by Chinese meat producer Shuanghui International Holdings Ltd to buy the world's biggest pork producer, Smithfield Foods Inc, for $4.7 billion in cash, the largest China-US takeover, to Bright Food (Group) Co Ltd's purchase of British cereal company Weetabix Ltd last year, were efforts by Chinese food companies to make a name for themselves globally by acquiring renowned foreign peers, said He Zhicheng, chief economist at the Agricultural Bank of China.

But after years of investment in overseas countries, critics said that China's food sector may have attached too much importance to the overseas market.

"Building a production base in Korea may be one way to compete with food companies on the international stage, but the question is whether they can fully learn the food technology and safety protocols, an essential factor to help them improve food safety and directly affect competition with other food companies. Because the Chinese have become savvy in choosing imported food, food companies can't win them over simply with a label," added He.

The economist added that some Chinese companies in all sectors would be better off channeling their capital and efforts toward their own home market, which has seen a tremendous demand from its enormous population.

His words were echoed by Lian Ping, who said investing in South Korea is a double-edged sword.