MARINE FISH PRODUCTION AND MARKETING FOR A CHINESE FOOD MARKET: A TRANSACTION COST PERSPECTIVE

ABSTRACT

From a transaction cost perspective, this paper shows how the tradition of consuming marine fish by the majority of Hong Kong's Chinese citizens has shaped the means and modes of marketing seafood in Hong Kong. It is argued that consumer preferences stimulate aquaculture as a non-open access measure to bypass state fish marketing regulations. This has resulted in two outcomes. First, the transaction cost savings on metering output quantity and quality under private property have led not only to the collapse of the state monopoly on marine fish marketing, but also to the emergence of the (then new but) currently popular kind of Chinese seafood restaurant in Hong Kong. Second, consumer preferences for variety have shaped the form of coordination between the producer and the consumer. The advantage of market coordination has led to the emergence of a system of wholesaling and retailing rather than vertical integration. Issues concerning the emergence of Hong Kong as a regional live marine fish production and trading centre are discussed in terms of the contribution of local mariculture to sustainable development.