To many, China is an untapped market for perishables, but upgrades to the country’s cold supply chain are required to provide real opportunities to shippers. China needs to improve its cold supply chain to provide a growing middle class with perishable food options. Increasing consumption of fruit and vegetables, dairy and meat in China, according to research from the Dutch agri-finance group Rabobank, “is being driven by continued economic growth and urbanization.” Although China’s economic growth rate is slower and becoming more balanced, the country’s economy is nonetheless expected to grow by six percent to seven percent annually in the coming years. That growth, the Rabobank research indicates, “will elevate a further 38 million households into the upper middle class.” China’s appetite for fruit and vegetables, dairy, and meat is expected to increase by 17 percent over the next decade. The country’s growing demand for fresh food offers huge opportunities for exporters of perishable foods, provided that China makes the required investments in transportation, storage, and distributions infrastructures, according to a Rabobank report. China’s more affluent consumers are making fresh foods more common in the Chinese diet. As fresh food demand increases in China, food and agribusinesses are searching for improvements in food safety, quality, and more efficient paths to the Chinese consumer. “Food safety remains one of the biggest concerns for the Chinese consumer,” said Wilco Hendriks, CEO of Rabobank China. “China is improving its own food safety and security, reducing food waste, lowering healthcare costs and seeking better overall health improvements of the Chinese population. To meet the changing consumer needs, China is also looking at investments in the infrastructure and logistics of food transportation flows across domestic and international land routes instead of sea shipping lanes.” Europe and the Netherlands in particular are major suppliers of food and agricultural products to China. Increasing prosperity and China’s growing demand for fresh food offers huge opportunities for imports from European food industry, but also require huge investments in cold chain infrastructure. Cold Chain China’s cold chain sector is still lagging and needs to improve in terms of both quality and capacity. According to the Rabobank research, an estimated $85 billion is needed in the next ten years. Rabobank analyzed the building of China’s new cold supply chains for perishables and what it will entail in a report entitled, “Freight Trains and Cold Chains.” The numbers tell the story: with 20 percent of the world population, China has only 10 percent of its arable land and six percent of its water. The implications are that China “faces enormous challenges on food security and safety,” the Rabobank report said. “China’s demand for fresh, safe and high-quality food is outstripping its capacity to produce and deliver domestically,” explained Paul Bosch, a Rabobank researcher. “However, the growth in consumption of perishable food in China will only continue if supply chains deliver on quality and safety. To a large extent this depends on the proper cooling of products during storage, handling and transport.” In the report, undertaken together with Wageningen University, Rabobank examined whether and how a new rail route for food products between Europe and China could provide a better and more cost and time efficient alternative. That proposition is based on the New Silk Road, an international trade and infrastructure project proposed in 2013 by Chinese President Xi Jinping to better connect China with Europe. “When connecting Rotterdam and Chonqing by rail, the New Silk Road trip takes 13 days which is 30 to 40 days less than a Rotterdam-China ocean trip,” said Hendriks. “Because of the shorter transportation time, less working capital is needed compared to sea transportation. In addition, inland transportation costs from seaport to inland China are largely reduced.” The New Silk Road has the capability to stabilize China’s food system by enhancing international trade and reducing the vulnerability to regional events, such as diseases and extreme weather, according to the report. “In time, the Europe to China land route also has the potential to enhance competition, changing the competitive positions of current trading partners like the United States, Brazil, and Australia, as well as improving the price stability of the food system,” said Hendriks. Recent studies indicate that agricultural products from the Netherlands, such as cherry tomatoes, cherries, blueberries, flower bulbs, veal, and baby milk powder, are well positioned to be transported along the new railway to China. “The strongest selling point of all these products is the reputation of the Dutch agricultural sector in China,” said Hendriks. “The Dutch food and agriculture reputation is one of professionalism and modernization, which translates into higher productivity and better food safety for the Chinese consumer.” According to the Rabobank report, establishing better transportation options for fresh food and cold chain improvements internationally and domestically China could reduce the waste of perishables by 14 percent (valued at $7.5 billion); create a 10 percent reduction in food prices and hunger in China; reduce healthcare costs; and provide a 10 percent to 20 percent reduction of emissions associated with the perishables supply chain. Rabobank’s research shows that the development of China’s cold chain would be part of an important set of solutions to feed the nine billion world population by 2050. Rabobank’s Banking for Food program seeks to provide access to finance, as well as the dissemination of knowledge and networks, to food growers, as well as transportation and distribution enterprises, in the effort to adequately feed a growing global population. In addition to the transportation links with Europe, China also requires additional investments in its domestic perishables storage capacity and distribution channels, according to the Rabobank report. “The demand for fresh, safe food, bought through modern channels, is driving the country’s investment in cold chain infrastructure,” the report noted. “Over the past five years, storage capacity has grown from 12 million cubic meters in 2007 to roughly 100 million cubic meters in 2015. But, the report added, “China’s cold chain sector is still lagging and needs to improve in terms of both quality and capacity.” The country’s cold chain sector will only improve “once cold chain companies start adapting their business models into higher-value strategies in response to the higher service needs of their clients.”