High Steaks Trade: China welcomes challenge from American beef

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Something new is appearing in Chinese markets and restaurants. American beef is making a comeback in China -- after being banned for 14 years. The move has given customers more options ... but it's also shaking up China's beef industry. Our Jonathan Betz explains.

In remote China, cattle rancher Wang Zhanjiang suddenly faces new competition: American Beef – now back in China for the first time in years. nWhile Chinese customers applaud the new menu choice.

"It tastes good! It could be better if it's softer." "The price is pretty much the same as Chinese beef."

It worries small ranchers like Wang – who just spent 13-thousand-dollars (80,000rmb) on a new barn.

WANG ZHANJIANG, CATTLE RANCHER "The market is not stable now. I have to wait and see.” Banned in 2003 over fears of Mad Cow disease, American beef returned to China in June as part of a trade deal with the U-S. At e-commerce giant, Alibaba, workers immediately sprang to action.

JONATHAN BETZ, HANGZHOU “Executives here flew to Chicago to meet with American meat executives and the company heavily promoted the comeback on its websites – where millions of Chinese buy groceries.”

JOHN CONNELLY, TMALL FRESH MANAGER "We sold out almost immediately. The Chinese absolutely want a big juicy steak, just like everyone else." Beef is a relatively new dish for China – most here overwhelmingly prefer pork. n nBut the hunger is growing, and the market is racing to keep up with demand

Even though US beef comes from further away, analysts say it's often cheaper than Chinese beef – largely because the American meat industry is so industrialized. China still largely relies on individual ranches raising cattle on a small scale. Something many experts say must change.

QI XIAOTONG, ANIMAL HUSBANDRY & VETERINARY BUREAU "If we don't modernize the traditional breeding industry, we will be eliminated from the market. The reason is simple. Because we raise cattle at a higher cost. We need to increase the efficiency to keep up with the international market.”

Some places are already adapting. The Longjiang Wagyu Company in far northern China focused on going upscale – ensuring their cattle are raised and slaughtered on site.

ZHOU XIGUI, LONGJIANG WAGYU COMPANY MANAGER "The beef we sell is targeted to high-end customers so we can sell it at a higher price.”

Right now, US beef imports to China are small – American ranchers must meet strict Chinese government rules. But for US ranchers – the potential is huge. While giving the Chinese, something else to sink their teeth into. JB, CGTN, Hangzhou.