Feng Minmin, a Chinese permanently residing in Japan, bought a bunch of flowers on her way home as usual, but she has never thought about where those flowers came from.

If she knew that the flowers decorating her house everyday are from her hometown Shanghai, she might feel homesick.

Japan is one of the largest importers of China's flowers and plants. China's flower and plant exports have achieved sharp increases during the recent years.

Statistics from the Ministry of Agriculture indicate that the export volume of flowers and plants amounted to US$3.57 billion last year, making up one-sixth of China's agricultural products exports US$21.43 billion as a whole.

This marks a hefty increase from the previous year thanks to rising exports of high-grade and high-end products.

Supportive policies

Gao Junping, an official of the Flowers and Plants Administration Office affiliated to the Ministry of Agriculture, said that the central government has issued a series of policies to encourage the export of flowers and plants.

"The policies involve reducing or rebating export administration fees for some specific species, opening up a flower and plant export green passage in border ports, and setting up special flower and plant research and development funds," said Gao.

As development of the industry may help farmers increase income, absorb a part of the surplus labor resources in China's rural areas and improve the environment, a raft of local governments have formulated particular supportive regulations.

Gao said Yunnan, one of the largest flower and plant exporting provinces in China, was a good example.

The provincial government has drawn up a 10-year (1995-2005) development plan for the flower and plant industry, which has as its target that the combined planting area and export revenue should reach 66.7 square kilometres and US$90 million respectively by 2005.

To meet the target, the government has made efforts to set up technology and marketing promotion systems and to pool financial investment to help planters upgrade facilities.

Meanwhile, the government has issued preferential policies to encourage related enterprises to introduce overseas investment and leading technologies and experienced horticultural staff.

A professional logistics complex and a demonstration park have been established, thanks to governmental support, to bolster the area's reputation as an international flower and plant auction center.

"Yunnan, Guangdong, Zhejiang, Shandong, Fujian and Shanghai are the key flower and plant exporters of China," Gao said. "Their combined export volume accounted for 87 percent of the nation's sector as a whole last year," said Gao.

Developing advantages

Dr Zheng Shuxin of the Asian Gardening Information Service Center points out that China boasts unique advantages in the flowers and plants industry.

"China owns the richest resource of species in the world, with 113 families, 523 genuses and nearly 20,000 species of ornamental plants native to the nation," said Zheng.

Meanwhile, China's vast territory means that there are various ecological types and different climatic conditions.

Furthermore, China's rich labor resources supply comparatively low-cost labor, and the flowers and plants industry is labor-intensive.

Problems to be resolved

But, to compete with foreign giants in the international market, a series of problems should be resolved as soon as possible, experts and insiders say.

"A complete and high-efficiency marketing system should be erected to enhance our competitiveness in the international market," said Jiang Zehui, president of the China Flowers and Plants Association.

Outdated logistics mechanisms should be upgraded and complicated examination and approval procedures should be streamlined to reduce costs and guarantee quality, considering buyers put high requirements on the freshness of the flowers and plants products.

"High air freighting fees in China, which are 30 percent higher than that in Japan and South Korea in general, are a headache for flower and plant exporters," said Jiang.

"We cannot use administrative tools to reduce prices under a market-oriented economy. The only way for the exporters is expanding their business scale to obtain discounted prices."

Jiang suggested the local governments guide flowers and plants producers, who are still operating in workshop style, to set up unions to realize larger scale operations.

In Yunnan, unions have already emerged. Yunnan Yunhua Co Ltd is composed of a professional flower and plant exporting firm and a raft of scattered planters.

The exporting firm provides market information and guidance, technological services and advanced facilities to the planters and uses its distribution networks to increase logistics efficiency.

"Such an operation model enlarges the exporting scale and reduces costs, which also facilitates the planters scattered business risks," said managerial staff of the company.

Jiang said that the China Flowers and Plants Association is conducting nationwide research at present and will coordinate with government at various levels to promote the establishment of a group of flower and plant exports enterprises in China.

Jiang also said that an information system providing the latest market data and governmental policy guidance was very important to help operators grasp business opportunities and adjust their development schemes.

Eyeing huge market potential and a promising future, flowers and plants bases have mushroomed during the past decade around China, which has led to duplicated construction and an irrational products mix.

"If an information system can be set up, planters may make their decisions based on market analysis to avoid blind development," said Jiang.

So far, the high end of the international flowers and plants market is dominated by foreign players. Domestic counterparts are urged to pay great attention to research and development (R&D), said Jiang.

According to incomplete statistics, Dutch, Japanese and South Korean flower and plant enterprises pool around 30 percent of their profit in R&D - developing new products or upgrading traditional species, while the figure is about 10 percent for China's enterprises.

"The added value of our products is comparatively low in the international market and outdated technologies and equipment are hindering the rapid growth of the industry," said Jiang.

Experts indicate that species protection should be highlighted, an area that is regarded as a part of intellectual property rights protection.

To guarantee fair competition and protect the overall interest of China's flower and plant sector, experts and insiders have called for standardization of the market.

"Quality supervision should be strengthened to protect the reputation of our products in the international market, while a price war will demolish China's flowers and plants industry as a whole," said Jiang.

Jiang said that the association would play a bigger role in co-operating with the government to standardize the market in a bid to retain sustainable and healthy development in the industry.

Promising future

Though faced with many problems, China's flower and plant industry is progressing at a fast pace, especially in specific areas.

Southwest China's Yunnan Province, hometown for many traditional Chinese flowers and plants, has become the largest fresh flowers exporter in China.

During the first six months, the combined export volume of fresh flowers from Yunnan amounted to US$4.22 million, up 42.2 per cent in the same period of last year.

Yunnan has been the top flower and plant grower in China for 10 years.

Last November, Asia's largest flowers and plants supermarket, including wholesale and retailing markets, was launched in Guangzhou, the capital city of South China's Guangdong Province.

It will not only act as a trading platform for domestic flowers and plants companies but also become the flowers and plants distribution center for Asia, because of its coastal location and convenient air and land transportation systems.

The government is strengthening its macro guidance for the flowers and plants industry, and a general development scheme is being designed by the Flowers and Plants Administration Office of the Ministry of Agriculture.

(China Daily October 21, 2004)