China aims to initiate vast coffee plantations at suitable regions of the country

China aims to initiate vast coffee plantations at suitable regions of the country

December 17 - 2022

Coffee Geography Magazine

By Derege L. Gemeda

Local regional governments in China are given instruction by the communist regime in Beijing to vastly develop coffee farming where the regions are suitable for production. One notable example is the I-coffee Exposition in Haikou (Hainan province), funded by the Chinese government in an effort to advance both domestic and international coffee commerce and Chinese coffee culture. The production, trade, and consumption of coffee are the main topics of the Exposition.

china map

In August 2022, several departments from Yunnan’s local government issued Measures for Promoting the Improvement of the Rate of Fine Coffee Products and the Rate of Deep Processing (Measures). The goal is to increase the production rate of high-quality beans in the region by 30 percent and the rate of intensive and deep processing of coffee by 80 percent – within the next two years – as part of efforts to transform Yunnan into a global coffee sourcing center. The Measures include: 

• Delineating suitable areas for coffee plantations; 

• Introducing new high-quality coffee varieties; 

• Upgrading coffee planting criteria according to area suitability; 

• Improving “green” approaches to coffee cultivation; and 

• Devolving financing and subsidies for coffee plantations.

Currently the country is mainly sourcing its coffee from Ethiopia, Vietnam, Indonesia and Brazil where many small holding coffee farmers are dependent on Chinese market. The new move which involves the Chinese government subsidy on the initiative may cause a wide spread loss of revenue to poor coffee exporting countries. 

China is still a new market for coffee which stands out among major economies because it lacks a vibrant local coffee culture. Even in Japan, a country long recognized for its tea culture, drinking coffee is widespread, especially in major cities. Nevertheless, coffee habits have picked up quickly, especially among younger consumers. Much like how each successive generation in China differs significantly from the previous, so do their coffee consumption and preference. In major cities, middle-aged consumers (40–59) have embraced coffee as a social experience rather than a product. This group also perceives coffee as a commodity, a need for doing business, and a status symbol. In the latter case, buying coffee regularly—especially from well-known brands like Starbucks—is a sign of having achieved financial success because it is costlier compared to local alternatives and reflects above-average earning capacity.

In varying degrees, millennial and Gen Z customers (people under 40) are considered “native” coffee drinkers. Their upbringing coincided with the entry of the most famous coffee companies into China, whose influence has become widespread over the past 20 years. Many in this category of Chinese consumers share similar characteristics with coffee drinkers in mature coffee markets. 

Coffee reportedly made its initial appearance in China when a French missionary planted coffee beans throughout Yunnan Province in the 1890s which was brought from Wolega province of Ethiopia. The drink would go largely unnoticed for the following hundred years. However, as with many things in China, over the past 20 years, the market has undergone a rapid change. In 2021, China’s coffee market grew by 31 percent over the previous year and is projected to increase at a compound annual growth rate of 9.63 percent between 2022 and 2025.