On February 13, 2023, China’s No. 1 Central Document for 2023 was issued, marking the 20th such document guiding work on agriculture, rural areas and farmers since the 21st century. The document, consisting of nine chapters, mentions cold-chain logistics on multiple occasions. It explicitly calls for accelerating the construction of grain drying facilities, on-farm cold storage and cold-chain logistics facilities for agricultural products, supporting the development of regional cold-chain distribution hubs at production areas, and extending the cold-chain logistics network to rural areas. The cold-chain industry serving agriculture, rural areas and farmers has once again been high on the policy agenda.

China is a major agricultural country with a long farming civilization and vast arable land accounting for 7% of the world’s total. With a population of 1.4 billion — about 18% of the global total of 7.8 billion (as of 2022) — China feeds 18% of the world’s population with just 7% of the world’s arable land.

The Chinese nation has long upheld the belief that “food is the first necessity of the people”, highlighting the paramount importance of food security. Agricultural products are characterized by regionality, seasonality, price volatility, consistency, diversity and substitutability, and most are perishable under natural conditions. In this context, the critical role of cold storage has become increasingly prominent.

China began constructing cold storages for meat preservation in 1955, built its first fruit cold storage in 1968, and completed a controlled-atmosphere (CA) storage in 1978. In recent years, cold storage construction has grown rapidly across China, mainly concentrated in major production areas of fruits, vegetables, beef, mutton and other agricultural products, as well as suburban areas of large and medium-sized cities. However, Class C traditional cold storages still dominate China’s existing cold storage inventory, plagued by widespread problems including low utilization rates, unlicensed design and installation, lack of unified standards and technical archives for special equipment, outdated hardware and software, substandard temperature control, severely corroded pipelines, wall peeling, foundation subsidence, irregular inspection of pressure vessels, intermittent operation and running with defects.

According to CBRE data, high-standard cold storages account for only 30% of China’s total cold storage capacity, and over 90% of their clients are from food-related sectors. Nationwide, the combined area of Class A and Class B high-standard cold storages stands at 8.76 million square meters, representing less than one-third of the total cold storage stock — 13% for Class A and 19% for Class B.

The 14th Five-Year Plan for Cold-Chain Logistics Development mandates the phasing out and shutdown of non-compliant, illegal and outdated energy-intensive cold storages, and accelerates the renovation and upgrading of cold-chain facilities. It also clearly sets a target to build 100 national backbone cold-chain logistics bases as core hubs. Supporting industrial parks, secondary logistics centers, urban cold storages, front warehouses, grid warehouses, and on-farm cold storages will form an interconnected national network. Class A and Class B high-standard cold storages are set to become the main growth drivers of the cold storage market.