Ginseng trade war
Every move by China's ginseng industry unnerves South Korean ginseng companies, who claim they are losing ground in the market. KT&G, South Korea's largest tobacco and ginseng company, is one that has foreseen the trend.
Early in March 2011, the company signed a cooperative treaty with the Jilin provincial government in Changchun city, the capital of the province, and vowed to build a ginseng processing plant solely funded by KT&G in the Yanbian Korean Autonomous Prefecture, according to a report in China Daily.
At that time, the company decided to bring in advanced ginseng processing and planting technologies to China and develop a series of ginseng products at the plant.
According to South Korea's Yonhap News Agency, although China is trying to make use of its Changbai Mountain ginseng to challenge the status of Korean ginseng, KT&G will fight back.
In South Korea, the ginseng industry is a source of national pride for its citizens. One businessman said the development of South Korea's ginseng industry would directly affect the image of the country, and its government would provide full support for KT&G's strategy.
Usually, South Korean ginseng companies hire Chinese staff to purchase the roots in China and then export them to South Korea.
But in 2010, when ginseng prices soared to an historic high, some South Korean businessmen who had made advance payments to Jilin ginseng farmers suddenly refused to accept the roots and cancelled their orders, which resulted in price drops in the following months.
In addition, South Korea has long been focused on training excellent ginseng experts to ensure its top brands, while China's ginseng industry is still relatively underdeveloped.
Strive to become stronger
Faced with an aggressive strategy, China should continue to improve its ginseng cultivation and processing. The industry's development also needs to be backed by the government, which can provide powerful scientific and intellectual support.
Apart from the fact that the industry must rely on both science and culture to be upgraded, the government should see to it that the incomes of ginseng farmers are increased steadily.
Jilin's Tonghua city has outlined its target for 2012, when more than 70% of its ginseng products are to meet organic standards, with over 40% made by deep processing. The mayor of Tonghua believes that China will eventually enjoy a glorious run in its ginseng industry.
According to the local government, Jilin Province expects to see a ten-fold growth in its output value of ginseng in ten years, from the present 10 billion yuan ($1.5 billion) to 100 billion yuan ($15.46 billion) in 2020.
