The dairy industry has only about 180 years of history among the Han people. However some ethnic minority people have been drinking milk for centuries. It was only after Western countries entered China with advanced weapons in the mid-19th Century that milk became familiar to common people. A French missionary brought the first eight milk cows to Shanghai after the Opium War.

For a long time, milk was considered a luxury drink by common people.

A widespread saying in the country was that Japan used a cup of milk to strengthen the constitution of its people. "That is not unreasonable because the rich calcium in milk definitely benefits the constitution," said Jiang Shanchang, an official with the Shanghai Dairy Office.

The average annual consumption per capita in Japan has risen from less than 10 kilograms immediately after World War II to 68 kilograms today. The average height of Japanese has increased by 11 centimetres during this period.

The Chinese Government also hopes to improve the constitution of local people, and since milk is the most obvious nutritious food, it has naturally been picked up.

But due to tradition, Chinese people are not in the habit of drinking milk regularly. The annual output of milk in the country is about 10 million tons, compared with 8 million tons of distilled spirits.

The annual milk consumption per capita is about 7 kilograms in China while the world's average is about 100 kilograms.

The government has noticed the huge gap and plans to raise consumption to 10 kilograms per capita by 2005 and 16 kilograms by 2010, according to the Beijing Times. The Central Government has also popularized plans for "school milk" since the beginning of this century.

The consumption of dairy products has risen at an annual rate of about 20 to 30 per cent recently. In big cities such as Beijing and Shanghai milk is no longer considered a luxury food for children and the sick. It appears on the table everyday. The average per capita consumption of milk has reached 27 kilograms in Shanghai.

One problem, however, is that the increase in milk output - about 10 per cent annually - can't keep up with increase in demand. So where is the extra milk to be found?

"Generally speaking, the country is short of resource of fresh milk," Gu said. "In recent years, some producers have begun adding other elements such as imported milk powder into milk to make so-called 'pure fresh milk'."

In some "pure milk", there is no milk at all, but only milk powder. This practice has resulted in a deterioration in the taste of milk.

"For a long time, the country's dairy farms have pursued high output instead of quality. So the nutritional quality of the milk has fallen below international standards," Gu added.

The levels of protein and fat in domestic milk have both fallen 0.2 per cent below international standards.

In addition, to ensure food safety, producers sterilize the milk at high-temperatures. "But who cares about the nutrition contained in it? Certainly, high temperatures kill bacteria, but they also destroy some nutrients," Gu said.

As Gu anticipated, the next round of competition for dairy products should focus on quality rather than price or flavour.

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