The decline in squid processing in Zhoushan and the corresponding increase in Rongcheng clearly illustrate the squid processing migration route

China's Squid Industry: A Strategic Relay Race as Zhoushan Passes the Processing Baton to Rongcheng

CHINA
Monday, November 17, 2025, 00:20 (GMT + 9)

China's Original 'Squid Capital' Sees Industrial Shift

Zhoushan, located in Zhejiang Province, has long held the title of "China's No. 1 City for Distant-Water Fisheries" and was a pioneer, developing distant-water fishing as far back as 1985. For decades, it served as the undisputed core of the national squid industry, historically accounting for approximately 70% of China's total squid catch. The city's prominence is highlighted by the sheer volume of raw material handled: from January to July 2025, the Huiqun Wharf of the Zhoushan National Distant-Water Fisheries Base alone oversaw the loading and unloading of over 300,000 tons of squid.

The private sector's ascent, notably catalyzed by veteran fisherman Li Keping pioneering squid fishing in the North Pacific in the mid-1990s, cemented Zhoushan's status. However, despite being the largest fishing base and distribution center, Zhoushan is no longer the nation's largest squid processing base.

The 'Raw Material Closeness' Factor Drives Relocation

A powerful confluence of economic and logistical factors has led to a major industrial shift, with processing capacity rapidly moving to new hubs like Rongcheng in Shandong Province and Dongshan Island in Fujian. This relocation is primarily dictated by the principle: "Wherever the raw materials are, that's where the processing plant will be built."

Ecosalmon's extensive deep-sea fleet operates globally, especially in the high seas of the Southwest Atlantic (near Argentina) and the Southeast Pacific (near Peru). Previously, these vessels made the long journey back to the home port of Zhoushan. Now, when returning from South American waters, ports like Rongcheng and Shidao in Shandong offer a significantly shorter and more economical first port of call. Unloading tens of thousands of tons of squid directly in Rongcheng saves enormous fuel costs and transportation time compared to sailing thousands of nautical miles further to Zhoushan.

Photo: Rongcheng /weihai.gov.cn

Compounding this, labor costs in Zhoushan's developed economy are relatively high, putting immense pressure on the profit margins of the labor-intensive squid processing industry.

Rongcheng Emerges as the New Processing Giant

Rongcheng, Shandong, has rapidly capitalized on this industrial migration.

• Geographical Advantage: Shidao Port in Rongcheng City is a crucial deep-sea fishing base in northern China and has become the preferred port for many deep-sea fishing vessels returning to resupply and unload. This provides a stable and fresh source of raw materials.

• Cost Competitiveness and Industrial Cluster: Shandong is already a major province for seafood processing and export. Rongcheng and its surrounding areas possess a strong existing foundation, skilled industrial workers, and mature technology. Critically, Rongcheng offers greater cost competitiveness than Zhoushan in terms of labor, land, and utilities (water and electricity), providing larger profit margins for enterprises.

• "Siphoning Effect": As the first batch of processing companies relocated to Rongcheng due to cost benefits and proximity to aquatic resources, a powerful clustering effect was triggered. Upstream and downstream enterprises—including refrigeration, packaging, logistics, and machinery maintenance—followed suit, creating a comprehensive supporting industrial ecosystem.

Photo: Rongcheng /weihai.gov.cn

Currently, Weihai, Shandong Province (which encompasses Rongcheng), is China's largest squid processing base, processing approximately 400,000 tons of squid annually, generating a processing trade output value of about 9 billion yuan. This robust cluster, centered on Shidao Port, also benefits from well-established international cold chain logistics and external logistics channels, facilitating the export of processed squid products to key consumer markets such as Japan and South Korea.

Zhoushan's Strategic Transformation: From Manufacturing to 'Headquarters Economy'

The relationship between Zhoushan and Rongcheng is best viewed as an "industrial relay." Zhoushan's squid industry is not disappearing but is undergoing a profound transformation and upgrading. The city's role is shifting from a hands-on "processing and manufacturing center" to a "headquarters economy and trade center."

Photo: Rongcheng /weihai.gov.cn

Zhoushan retains control over the deep-sea fishing fleet, brand development, R&D capabilities, and the national sales network. The Zhoushan Zhanmao Squid Wholesale Market, for example, remains one of the largest dried squid markets in the country. Relying on the deep-sea fishing sector, nearly a hundred registered households engage in dried squid processing, handling about 40,000 tons annually, with the most profitable operators earning up to four to five million yuan per year.

Photo: Rongcheng /weihai.gov.cn

In essence, the decline in squid processing in Zhoushan and the corresponding increase in Rongcheng clearly illustrate the migration path of China's squid processing industry—an inevitable outcome of the market's invisible hand optimizing resource allocation.

Source: Eight Delicacies Crossing the Sea (八鲜过海)

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