Business trends in China's agri-horticultural sector in the coming years

As one of the most dynamic markets for the global agri-horticultural sector, China has the largest greenhouse cultivation area worldwide. Several agriculture concepts, such as rural revitalization, big data, and AI, and sustainable farming, are encouraged by policymakers in China. The latest annual Agriculture and Rural Affairs Conference organized by the Chinese Central Government in the end of 2021 mapped out the plan for this year and again highlighted the development of rural areas and the agricultural sector to the realization of the national rural revitalization strategy.

During a meeting between Meindert Stolk, Vice-governor at Province of Zuid-Holland and Zhang Tianzhu, Professor at the China Agriculture University and Chief Consultant of Zhongnong Futong, in November 2021, Professor Zhang mentioned three particular areas of interest in the horticulture field: the development of innovative solar greenhouses, production scale glass greenhouses and small scale functional greenhouses.

Professor Zhang Tianzhu from China Agriculture University had a digital dialogue with Meindert Stolk, Vice-governor Province of Zuid-Holland to exchange views on the agri-horticulture business exchange between China and the Netherlands in Nov. 2021

Solar greenhouse
The solar greenhouse is a unique design that originated in China. The structure usually faces south, featured by supporting north walls that help maintain more moderate temperatures inside the structure. The Chinese solar greenhouses are surprisingly effective in heat storage performance and have low construction cost, which makes them still the major form of greenhouses in China, especially in the north. However, the limited space inside of traditional solar greenhouse prevents them from the mechanized operation, leading to low labor productivity and poor working conditions.

Professor Zhang described that an upgrade of the existing solar greenhouse is inevitable. It can be improved from the perspective of energy usage/ water-saving capability, sustainability, economies of scale, and efficiency.

Since 2019, Wageningen University & Research, China Agriculture University, and Futong spent nearly two years designing and developing a new type of solar greenhouse mainly for the mid-market in northern China. The new design can greatly contribute to the improvement of China's large area of solar greenhouses and offers new business opportunities for horticulture suppliers and tech companies both from the Netherlands and China.

Production scale glass greenhouses
A few large production scale glass greenhouses have been built in China over the last few years. Many of them were either built by Dutch greenhouse companies or equipped with Dutch technologies. However, most of the greenhouses failed to meet the original return on investment expectations. It is a waste of resources if the management of these expensive glass greenhouses is not done properly and cannot produce the expected kilos of fresh produce.

Judging from some of these greenhouse operations, one of the prominent problems seems to be that only emphasis is placed on the introduction of hardware and equipment while ignoring the training of Green fingers to manage the greenhouse.

With the gradual increase in energy prices in China in 2022, the operation of these production scale glass greenhouses will face even greater challenges. It can be expected that the total number of new production scale glass greenhouses will increase slightly, but not significantly.

From the perspective of the sustainable development of the Chinese agri-horticultural sector, both Dutch service and equipment providers and Chinese investors should think more about how to improve the productivity of these existing greenhouses through for instance high-quality training and the introduction of intelligent planting solutions.

Small scale functional glass greenhouses
Professor Zhang expects that in the next few years, smaller-scale glass greenhouses, ranging from 3000 to 5000 m2, will have a larger market potential compared with large production scale greenhouses.  These small-scale greenhouses will be given multiple functions such as education and training, new concept development and technology promotion, trial and research, and demonstration and tourism purposes.

Regarding the positioning of different types of greenhouses, in the next few years, the upgraded solar greenhouses will ensure the mass production of high-quality vegetables and flowers; the production scale glass greenhouses will mainly target the supply of the high-end market, and the small scale glass greenhouses will mainly serve as a way to promote and demonstrate the latest horticulture technology.

Further business exchange between China and the Netherlands
Empowering rural development with digital technology is a major trend promoting the transformation of China's traditional agriculture. In the context of the rapid development of big data and AI in the field of agri-horticulture, there are huge opportunities for international cooperation, not only in greenhouse production but also in the entire business chain including agricultural materials, seedlings, plant protection, sales, packaging, and processing. Under the guidelines of rural revitalization, it is of great value to build a whole business chain from seed to fork and to improve the technological content of the operation and the added value of products.

Apart from the different business cultures and business models, the Chinese agri-/ and horticulture market has its particularities. Without the support of a strong local partner who is familiar with the sector background and a wide network, foreign companies often have little insight into the development trends of the Chinese market.

Futong, as one of the leading Chinese agriculture companies, as well as a golden member of TomatoWorld since 2020, together with its strategic partner Dutch Sino Business Promotions, an intermediary and business consulting company specialized in the business exchange between the Netherlands and China in the field of agri-horticulture, are ready to build a bridge to further connect businesses between the two countries.

For more information:

Dutch Sino Business Promotions
www.dutchsino.com