What Tea Industry Reveals About China’s Next Chapter

China’s transformation from a nation that accounted for less than 3% of global GDP in 1980 to around 17% in 2023 is an unprecedented success story. Over that time, China passed through various stages of development, each time confronted with new challenges and opportunities. Whenever China enters a new stage, people invariably ask what the “next China” might be. Will the success continue? Or has, as some naysayers suggest, China’s development reached its peak?

China has undoubtedly entered a new stage of development. In my opinion, China will continue to draw upon its rich cultural heritage and traditional philosophies, and merge these with the tenets of Marxism to further develop its socialism with Chinese characteristics. It will adapt and innovate with the latest advances in science and technology, and on the basis of skillful governance and feedback from the media, experts and the broader community, ensure that development continues.

In so doing, China will provide the world with economic growth and stability that will benefit all nations, especially those with a spirit of mutually beneficial cooperation. Collectively, we can contribute to a “new development philosophy” featuring innovative, coordinated, green, open and shared development. This is the spirit of the “next China.”

In his written speech at the Asia-Pacific Economic Cooperation CEO Summit in November 2023, Chinese President Xi Jinping cited an ancient Chinese scholar who wrote, “Plants with strong roots grow well, and efforts with the right focus ensure success.” In describing the “next China,” I will focus here on the plant synonymous with China, the tea plant – Camellia sinensis.

China is the birthplace of tea cultivation and remains one of the world’s largest tea producers, with a wide variety of tea types produced across different regions. Tea culture is an integral part of Chinese philosophies and everyday life. As President Xi said in his speech, “China is committed to applying the new development philosophy with a focus on achieving innovative, coordinated, green and open development for all, and it is pursuing high-quality development and high value-added and green economic growth.” In this regard, tea’s current adaptation in this new stage indicates how ancient philosophies, savvy governance, adaptation of technology, and the passion Chinese people have for their own culture will ensure that the “next China” is still China, providing a myriad of opportunities for foreign investors. Let’s explore some of these below.

Tea has played a significant role in poverty alleviation in China, particularly in rural areas where tea cultivation is a pillar industry. Tea farming provides employment for local communities, including operators of small-scale farms, who rely on tea as a primary source of income. In the past, getting the tea to market was difficult. Now, with much-improved transport infrastructure, tea from remote regions can be readily transported to the major markets in urban China and beyond. Tea farmers also faced the difficulty of promoting their tea in a large market full of competitors. Now, with digital technologies and e-commerce, they can promote their wares directly to consumers.

In the “next China,” tea cultivation will continue to be an important source of income for both large and small tea producers. There is still much room for development here, and foreign investors with the right skills and technology backgrounds can find many opportunities. These poverty alleviation methods focused on tea cultivation can also be exported to other developing countries where tea is an important industry, including those working with China under the Belt and Road Initiative, ensuring that the benefits are shared and contribute toward building a global community of shared future.

In Chinese culture, tea symbolizes humanity’s harmony with nature. However, we know that in periods of rapid growth, it can be difficult to balance development with sustainability. In recent years, China’s area of tea cultivation has dramatically expanded, and production has also increased rapidly. Large-scale cultivation of tea as a monoculture brings the benefit of output but also the challenge of environmental management. Consumers are concerned that their tea may have been exposed to excessive amounts of chemical fertilizers and pesticides. The importance of tea as a symbol of nature is now driving demand for organic teas.

In this regard, foreign investors with logistics, marketing, and e-commerce skills can find niche opportunities to source high-quality organic teas. The potential here is to export such teas to foreign consumers, an area still undeveloped in the Chinese tea industry. One particular area of interest lies in product authenticity. People want to know that the tea product they purchase is not fake. Various product identification technologies, such as blockchain, are now being explored across the tea industry to ensure authenticity.

Another area for investment is in the organic certification of tea. China has developed its own organic certification system for tea and other agricultural items. Still, there is room to incorporate additional global organic certification standards to enable more rapid and direct access to foreign markets. These standards can also be incorporated into the product authentication process. There is a great deal of potential in this area, and foreign investors keen to work collaboratively with Chinese tea producers and organic certification proponents can lay a solid foundation in contributing toward the “next China” and the new development philosophy.

President Xi once stated that “clear waters and lush mountains are invaluable assets.” As such, stressing a “return to nature” in the tea industry also transforms “tea mountains” into places for leisure and sanctuary. The various tea cultivation districts across China are now becoming popular tourist destinations, where visitors can witness firsthand the combination of traditional philosophies and modern know-how related to tea cultivation and production. Here again lie further opportunities for investors in transport, hospitality and tourism, especially as they pertain to attracting foreign visitors.

In short, by leveraging the country’s rich tea traditions and investing in the tea industry, China has created sustainable livelihoods for millions while preserving and promoting its cultural heritage. As noted here, there are numerous opportunities for foreign investors to participate in the development of the “next China” through the medium of tea. Everybody I know in the broader tea community wants the success story of tea to continue. So long as we can enjoy the pleasure of sharing tea with friends, family and colleagues, I’m sure the “next China” will still be China.

Dr. Gary Sigley is a professor of human geography in the Faculty of Geographical Science, Beijing Normal University.