I am writing a report about trade on a particular high-value wildlife commodity from Canada to China in the years 2007-2021. Trade boomed from 2008-2013, peaking in 2012-2013 at approximately 300 items per year, then suddenly dropped by 64% in 2014. Trade continued to decline in the following years, reaching only 50 items exported to China in 2020.
I’m trying to figure out what happened to the Chinese market. What drove the 2008-2013 boom and then what caused the rapid decline in that same market?
A Chinese authority suggested to me that the boom in imports was due to the Chinese economic boom in 2008, and the decline was due to an economic slowdown. However, according to the table on this Wiki page, both the gross domestic product (GDP) and GDP per capita grew steadily from 2010 to 2017. When I pointed that out, he suggested that the trend in investable assets better explains the situation than the country-wide GDP. But according to this graph, personal investable assets in China have grown steadily since 2014 at least.
I’m not an economist, and am definitely struggling here. What am I missing? Did the Chenese economy boom in 2008-2013 and then crash and somehow I am looking at the wrong data?
Any explanation would be welcome. Explain to me like I was 12.
Knowing that might be helpful.
Is the creature now extinct? Or the decline due to export regulations?
Is the same volume of trade occurring, but now it’s on the black market and not reported?
300 items is that some fashion or fad which ran it’s course.
On volumes that small, with over a billion consumers, then relation of trade to GDP per capita may be just co-incidental.
Not certain that my Venn diagram of “high-value wildlife” and “personal investable assets” has much area of intersection.
I am looking at trade in polar bear hides. So, not extinct and export regulations haven’t changed. The numbers hunted in Canada have declined only slightly in the past 10 years. There is essentially no black market and hardly any illegal hunting of polar bears in Canada. I didn’t mention the species because the idea of hunting polar bears is contentious and I want to keep the discussion focused on the Chinese economy.
I don’t know if Chinese import regs have changed, it is one of the factors I have wondered about but don’t have any information about. I could see regulatory changes causing an abrupt drop in imports, but I don’t think it would explain the continued decline over 10 years.
It definitely could be linked to some sort of fashion fad…you see that with wildlife trade all the time. There are other possible factors involved too. But at this point I’m just trying to understand what has happened over the years with the Chinese economy to determine whether there is any value to the comment provided by my Chinese colleague.
Would have thought Canadian export regulations would be more of a factor.
It seems like the top end of the market ie bears > 9’ are still in demand but the bottom has fallen out of the market for smaller and lower quality pelts, likely as the “novelty” has worn off.
However a bit of google-fu throws up the following:
Well, if that is an accurate account of the Chinese economy, then it was already tanking long before the market for polar bear hides got hot. If so my Chinese contact was completely wrong. But, according to this site, “nominal GDP is a better gauge of consumer purchasing power” which I would have thought was more relevant to the in-country market for a given product.
Perhaps I should be looking at some other measure than GDP or Real GDP?
Canadian export regulations became more onerous in 2012, but didn’t seem to affect exports. I takes longer to get the permits but it is still reasonably straight forward. I have been told that it is much more bureaucratic at the other end. But that is anecdotal. I’m going to reach out to the Chinese authorities, but I don’t have a good contact there so I’m not going to hold my breath for a response.
It certainly seemed like the decline was linked to the global fur trade decline in 2015. But that suggestion came directly from the fur industry. I now believe it was a factor in the decline, but it didn’t explain the boom in the first place. Exports of other wild furs (e.g. lynx and wolf) also declined sharply in 2014, but then started to recover slowly and actually spiked in 2019, before the pandemic created havoc. Exports of polar bear hides did not recover, and prices for polar bear hides have trended downwards since 2013.
In any case, I’m not sure that the market for polar bear hides is the same as for other furs. Polar bear hides are very expensive and are made into rugs or wall hangings. Definitely a luxury item. Most furs in trade are cut up and made into garments and other items.
The bottom line is there seems to be some other factor at play with the Chinese market. I’m not convinced it had so much to do with the Chinese economy. It could be as simple as an importer that specialised in polar bear hides went out of business. But Chinese imports haven’t stopped…just decreased year-to-year after 2013. China is still the biggest importer of polar bear hides.
China’s GDP per capita is (USD 8,804 in 2021) is less than 1/6th the USA (USD 56,200)
On the other hand China has almost twice the number of billionaires as the US.
Trade in niche luxury item is always going to be difficult. Perhaps the market is saturated, or is no longer cool. What was last year’s wall hanging is this year’s icky uncool item.
China is known for its manipulation of its major economic statistics and relating them to the purchasing habits of the very wealthy is going to be near impossible.
From what I can see about 500 bears a year are harvested in total, with pelts going for $10k to $20k. That is such a small trade that I suspect trying to tie the trade to GDP is useless.
In context, Rolex manufacture about 800,000 watches a year. They probably sell a third of these in China. They might see GDP changes in their figures, but even then, they are the perfect aspirational brand for the Chinese market. The market is near insatiable with waiting lists and premiums over list price demanded.
I have an economics background and lived in China for much of 1985-2010. I seriously doubt if the broader economy (GDP) is impacting the Polar Bear hide market in China. And we are talking somewhere between 50-300 hides.
These are luxury items. China has 698 billionaires according to Forbes.
It could be as simple as a popular movie featuring a polar bear hide and “all the cool people with money had to have one” and then it just faded away. Or as the OP mused, the importer might have gone out of business.
Thanks. I’ve come to the same conclusion. I’m going to try and connect with the Chinese Management Authority to see if there were any significant regulatory changes made or whether they can shed any light on the market dynamics. But I suspect I will not be able to satisfactorily determine what drove the boom and bust scenario. Its frustrating as a couple of hundred items is insignificant for most commodities, but for polar bear trade it was huge.
It’s entirely possible, as others have suggested, that what you’re seeing here is entirely driven by fickle fashion and fad. But, looking at those dates, there may be another factor.
Xi Jinping took power in China in 2012, and launched an anti-corruption campaign, the most sweeping in the modern history of China, which had its zenith precisely in that 2012-2014 time frame.
I can’t find a good non-paywalled cite off-hand, but the sales of a lot of luxury goods in China had severe declines during that time frame. From the figures you cite, it seems like the sales of polar bear hides were more extreme than for most luxury goods, but then again, “polar bear hide” is a pretty extreme luxury good to begin with.
