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Bill Savadove

Trying to protect its market, America slapped import tariffs on Chinese crayfish, but the ploy has not worked

Mainland entrepreneur Ni Qiaoling sees big money in little crayfish.

He has turned over part of his 530-hectare fish farm on the edge of Shanghai to raise the 'little dragon shrimp' as they are called on the mainland.

Mr Ni, boss of Cenhu Special Aquatic Products Company, has dreams of setting up a processing plant in the tiny town of Xicen and exporting crayfish overseas if the market proves profitable. 'If we succeed, we can expand,' he said.

That is bad news for producers in the southern United States, who are fighting off the invasion of the Chinese crayfish. The US International Trade Commission has just reaffirmed hefty import tariffs of up to 223 per cent on Chinese crayfish tail meat, duties first imposed in 1997 because of dumping by mainland producers.

Crayfish processing is yet another industry which started from nothing on the mainland but is now threatening US producers and contributing to a swelling US trade gap with China.

'We helped them [mainland producers] to raise crayfish many years ago and now they export or even dump it. It has almost killed our crayfish farmers,' said Steve Lee, director of the State of Louisiana Office in Taipei, which handles trade promotion in Asia.

For Louisiana, the issue is both economic and emotional. The state's crayfish industry earns US$140 million a year and employs more than 2,000 people, according to industry estimates. Crayfish, known as crawfish in the US, are both a signature dish and a key ingredient in local Cajun specialties, such as etouffee, a spicy stew made with vegetables and seafood.

China, though renowned for the diversity of its cuisine, largely ignored crayfish until recent years. It appeared on some mainland tables in the early 1990s, but many people considered them to be unclean and restaurants did not serve the dish.

In Shanghai, all this changed  this year with the opening of the first major restaurant serving just crayfish and beer. People are lining up outside the Hand Grabbed Crawfish Restaurant in Fuxing Road to pay 36 yuan (HK$34) for 1kg of crayfish boiled in the shell and shucked at the table.

A sign on the wall explains: 'This restaurant serves only crawfish and beer. We don't serve dishes, soup or rice.' Instead of chopsticks, the restaurant provides gloves, aprons and plastic bowls for the shells. Customers can chose from three levels of spiciness with vinegar on the side for dipping. It also offers spicy stir-fried crayfish tails with niangao, a glutinous rice cake.

The restaurant has been so successful since it opened in February that owner Chen Fang and her husband have set up another branch. It has also spawned several imitators in the city.

Mrs Chen said the main restaurant takes delivery of two truckloads of crayfish a day to ensure freshness. It uses at least 500kg of crayfish a day, helped by a thriving take-away business. 'People are the same. If they hear something is tasty, then they want to try it themselves,' Mrs Chen said.

The popularity of such restaurants in mainland cities has caused a boom for producers, many located in Jiangsu province near Shanghai.

In Jiangsu's Xuyi county, a red banner stretched across the road proclaims it to be the crayfish capital, a claim Louisiana might dispute.

On the mainland, crayfish are both caught and raised, but only in the past 10 years or so have companies considered the creatures to be a commercial product. Mainland producers say American allegations of dumping are unfair, claiming low costs have made their prices possible.

Liu Jingjun, a specialist in aquatic products for Cenhu, said crayfish were cheap to raise and were hardier than other species like freshwater shrimp. 'They're really easy to raise. You just let them grow,' he said, pointing to a murky green pond.

At Shanghai's largest fish market, a seller explained the economics of crayfish. Middlemen buy them live from rural producers for less than three yuan for half a kilogram. Wholesalers resell crayfish for 3.50 to five yuan and restaurants mark them up further for the table.

Companies which process and export have other costs for labour, freezing and shipping.

But labour - separating and shelling the tails by hand - is far cheaper on the mainland than in the United States.

By the time frozen Chinese crayfish tails hit supermarket shelves in New Orleans, they sell for as little as US$4 for a package of just under half-a-kilogram.

That compares with at least US$8 for locally raised crawfish, retailers say.

Although the US tax has hit mainland producers, it has not stopped them. China exported around 8,000 tonnes of crayfish tail meat to the US last year, while Louisiana produced only 500 tonnes.



A sting in the tail for US producers