Since 2011, the output of China's dairy products rapidly rises, reaching 23,874,900 tons in 2011, with an increase of 13.99% YOY. In terms of output, the yearonyear output growth rate of dry dairy products was the fastest, reaching 17.36%. The output of dry dairy products was also over 3.20 million tons. In 2011, the output of China's milk powder and liquid milk also substantially increased, which was respectively 1.385 million tons and 20,607,900 tons, separately rising by 13.7% and 3.47%. Dairy products produced in China are mainly liquid milk. In 2011, the rapid increase in the output growth rate of liquid milk drove the rapid increase of that in the overall dairy product industry. 

In numerous segmented fields of China's dairy product industry, liquid dairy products belong to the welldeveloped fields, with the production & sales volume and market size all reaching a certain height. China's local enterprises such as Yili, Mengniu and Bright occupy relatively large market shares. Foreignfunded brands are mainly concentrated in the milk powder field but lack domesticallyproduced liquid milk products due to raw material source issues in China, which also means that domestic enterprises are less challenged by foreignfunded brands in the liquid milk field. Meanwhile, the rapid development of liquid milk also brings various problems such as severe product homogeneity and generally low prices. Therefore, the Chinese government encourages enterprises to improve their sense of innovation and develop special dairy products and functional products suitable for different consumer demands, which is beneficial to solve problems such as the single variety and homogenization of products, providing consumers with more choices. 

In addition, highquality dairy products including whey powder and cheese still possess relatively small market share in China, which is at the initial development stage. 

In recent years, due to the continuous safety incidents of dairy products in China, many consumers, parents of infants in particular, choose to buy imported milk powder. The import volume of China's milk powder continuously rises in recent years. In 2011, the import volume of largepackaging milk powder was 449,600 tons, which was 3.5 times that of 2008. 

In recent years, reasons for the rapid rise in the import of China's dairy products are as follows. The frequent safety events of domestic dairy products cause the trust crisis, and dependence of consumers on imported dairy products continuously increases; because of the short supply of raw milk in China, demand for milk powder import significantly expands; the continuous rise in raw milk prices at home and import cost advantages prompt the significant increase in milk powder import; new national standards on the safety of dairy products are conductive to expanding dairy product import; because of the ChinaNew Zealand FTA preferential tax rate, dairy product import is more concentrated in New Zealand. 

With the development of China's economy and increase in income per capita, the demand of Chinese market for dairy products will continuously increase. However, due to the less varieties and worrying safety of domestic dairy products, enormous foreign dairy product enterprises are attracted to contend for the Chinese market. 

As for prospects of dairy product import trade during 2013 and 2017, the short supply of China's raw milk cannot be alleviated in the short term, and dairy product import will maintain the rising trend; in international markets, the supply and demand of dairy products is slightly tight, and prices of imported dairy products will continuously rise; the import scale of dairy products from New Zealand may further expand.

 

• Production and Demand of China's Dairy Products
• Government Policies for China's Dairy Product Industry
• Market Competition in China's Dairy Product Industry
• Import and Export of China's Dairy Product Industry
• Major Dairy Product Enterprises and Their Operations in China
• Status Quo of China's Baby Milk Powder Market
• Safety Incidents in China's Dairy Product Industry in Recent Years
• Prediction on Development of China's Dairy Product Industry 

• Dairy Product Manufacturers
• Dairy Product Trade Enterprises
• Investors/Research Institutions Focusing on China's Dairy Product Industry