Interview with National People's Congress Representative Wei Lihua: The Fiscal Support Coverage for Student Milk Programs Needs Further Expansion

Southern Finance National Two Sessions Report Team, He Hongyuan, Beijing Report

Dairy industry reaches a critical turning point.

On one hand, the market continues to fluctuate. According to Euromonitor, China’s liquid milk industry size in 2024 is 344.2 billion yuan, with a CAGR of 7.2% from 2011 to 2021. Since then, demand in the liquid milk sector has faced periodic pressure, with a CAGR of -4.2% from 2022 to 2024. NielsenIQ data shows that by September 2025, total dairy sales across all channels declined by 16.8% year-over-year.

At the same time, new opportunities are emerging.

According to the prospectus disclosed by Junlebao, despite market challenges, the company has achieved double growth in revenue and profit margins. In 2023 and 2024, Junlebao’s revenue was 17.5 billion yuan and 19.8 billion yuan respectively, reaching 15.1 billion yuan from January to September 2025, a 1.5% increase year-over-year; adjusted net profit margin increased from 3.4% in 2023 to 5.9% in 2024, and further to 6.2% in the first nine months of 2025.

This regional dairy company, originally known for yogurt, has grown into a nationwide group with diversified categories such as milk powder, fresh milk, and yogurt, along with an integrated industrial chain. Based on retail sales in China in 2024, Junlebao ranks third among comprehensive dairy enterprises.

Amid market fluctuations, National People’s Congress deputy and Junlebao Dairy Group Chairman and President Wei Lihua continues to find growth points.

He believes that market volatility is short-term, but the long-term, multi-dimensional, and certain growth space for China’s dairy industry exists: gaps in basic consumption, room for structural upgrades, deepening personalized demands, promising development of the industrial chain, and opportunities in international markets.

Wei Lihua also pays particular attention to the student milk market.

This year’s government work report explicitly states the need to advance the “Healthy China” initiative, optimize services for the elderly and children, and focus on 25 key projects. As an important part of the Healthy China strategy, the nutrition and health of children and adolescents have always been highly valued. Wei Lihua again focused on this issue at this year’s Two Sessions, proposing to promote the national “Student Drinking Milk Program” to ensure inclusive supply, calling for the benefits of development to be more fairly shared by every student.

He mentioned that the current promotion of student milk faces two main bottlenecks: first, in financial support, coverage needs to be expanded; second, in “self-ordered” purchases, parents’ awareness and milk-drinking habits need ongoing cultivation.

Another national dairy company executive responsible for student milk business admitted to 21st Century Business Herald that, to some extent, opening up the student milk market can influence the entire family’s consumption tendencies. As a result, this market is becoming increasingly important.

What additional support is needed for promoting student milk, and where is China’s dairy industry headed amid transformation? Wei Lihua provided a written interview to 21st Century Business Herald on these issues.

“21st Century”: Based on your research, what is the current status of student milk popularity in China, what are the main obstacles, and why is the coverage rate only about 17%?

Wei Lihua: The “Student Drinking Milk Program” has been implemented for 25 years. In 2024, the daily supply reached 26.72 million servings, significantly improving students’ physical health, boosting dairy consumption, and stabilizing the dairy industry. It has become an important livelihood project to improve youth nutrition. However, the current coverage rate still needs to be increased further. To achieve deeper “inclusive benefits,” we must work together to overcome some practical challenges.

Through research, I believe the main bottlenecks in promoting student milk are twofold:

First, in financial support, coverage needs to be expanded further. Currently, there are two main models: one is the “Rural Compulsory Education Student Nutrition Improvement Program” funded by the government, providing free milk to children in specific regions; the other is the broader “parent self-ordered” model. In areas covered by the nutrition program, we see significant health improvements among children, but due to varying local fiscal conditions and promotion progress, some underdeveloped regions still lack coverage. This remains a key focus for future efforts.

Second, in the “self-ordered” segment, parents’ awareness and milk-drinking habits need ongoing cultivation. Many parents lack understanding of the public welfare nature of student milk, the strict production standards, and certification systems, sometimes confusing it with regular flavored dairy drinks. Additionally, the overall scientific habit of milk drinking in China has not yet fully formed; some families do not see daily milk consumption as an essential part of their child’s growth, which affects their willingness to participate. Behind this is the need for long-term investment in “food education.”

Promoting student milk from “partial coverage” to “full inclusion” is a people’s livelihood project. As a company, we call for and actively cooperate with national policies, hoping to gradually expand free student milk coverage to all children in compulsory education through financial support. Meanwhile, we will continue to strictly control quality, ensuring every drop of student milk is safe and nutritious, and work with governments and schools to promote science-based education, helping more parents recognize the value of student milk, and jointly making this beneficial project a reality.

“21st Century”: Objectively speaking, as important participants, what are your suggestions for cooperation models to promote student milk into schools?

Wei Lihua: Based on years of practice and industry observation, I have some thoughts on government-enterprise cooperation models for student milk in schools:

First, I suggest promoting a procurement model of “province-level unified bidding, county-level coordinated implementation, and school-specific execution.” This approach leverages bulk purchasing advantages, reduces procurement costs, and maximizes fund efficiency. Provincial-level bidding can select qualified, reliable, and capable dairy companies to establish a qualified supplier list; county-level coordination allows flexibility based on local conditions; and school-specific implementation ensures the “last mile” is effectively covered.

Second, establish a comprehensive quality and safety supervision system. The safety of student milk is the prerequisite for inclusive benefits and a bottom-line for people’s livelihood. It is recommended to strictly enforce the entry standards for student drinking milk labels, implement designated production, targeted supply, and designated consumption; improve traceability from production, cold chain logistics, to campus delivery; strengthen corporate responsibility and school acceptance procedures, so parents can trust and schools can rest assured.

Third, build a “home-school-community-enterprise” collaborative education ecosystem. Student milk is not only a nutritional supplement but also an important educational tool. It is recommended to incorporate milk knowledge and nutrition science into school health education courses, carry out public welfare activities like “Science-based Milk Drinking into Schools and Communities,” and influence family consumption decisions through “small hands leading big hands,” cultivating students’ scientific milk-drinking habits.

Fourth, explore diversified cooperation models. Besides traditional supply methods, companies can co-build food education bases with schools, hold factory open days, establish nutrition education funds, and other innovative collaborations. These not only fulfill social responsibilities but also help companies better understand student needs, optimize products and services.

“21st Century”: Amid market fluctuations, where are the growth points for the dairy industry?

Wei Lihua: The industry is indeed experiencing cyclical fluctuations, but we remain confident in the long-term development of China’s dairy industry. Our confidence is rooted in five dimensions of growth potential, which together form the industry’s long-term positive outlook.

The first dimension is the huge growth potential from low basic consumption. Currently, China’s per capita annual dairy consumption is only about one-third of the global average. This gap represents the largest fundamental growth opportunity. Encouraging more Chinese to “drink milk” is the most basic growth logic for the industry.

The second dimension is the opportunity brought by product structure upgrades. In developed countries, low-temperature fresh milk accounts for over 80% of liquid milk market share, while in China, it is less than 30%. As consumers’ awareness of nutrition and health continues to rise, more people understand the value of “freshness”—the active nutrients retained in cold chain fresh milk are unmatched by ambient temperature milk, and cold milk also offers significant advantages in taste. The improving cold chain logistics system supports the penetration of low-temperature milk from first- and second-tier cities to broader markets. This “structural gap” is a certain increase driven by consumption upgrades.

The third dimension involves personalized nutritional needs and functional products. Dairy consumption is shifting from “universal supply” to “precision nutrition,” focusing on the health needs of the elderly and children, as well as various niche groups.

For example, targeted calcium supplementation and vision health for children; functional dairy products with low GI for the elderly to address muscle loss, bone health, blood sugar, and lipid management; high-protein products for lactose-intolerant populations, fitness enthusiasts; refined parenting products for young mothers; and snack-oriented consumption among Generation Z—all are creating new product forms.

The fourth dimension is the expansion of the industrial chain. Currently, production and consumption of deep-processed dairy products like cheese and butter in China still lag behind developed countries, with significant market share held by foreign brands. This indicates a large potential for deep processing products and domestic substitution. Junlebao is increasing R&D investment to develop advanced dairy processing technologies, such as whipped cream and butter, which not only create growth but also enhance the industry’s independent control and reshape market dynamics.

The fifth dimension is international markets. After years of development, Chinese dairy products meet international standards in quality, full industry chain management, and technological innovation. We are confident that China’s dairy industry is fully capable of competing globally. Exporting high-quality products worldwide is not just capacity output but also a showcase of Chinese manufacturing and branding. Junlebao is actively expanding its global footprint, allowing more consumers worldwide to experience Chinese dairy innovation.

In summary, market fluctuations are short-term, but China’s dairy industry has long-term, multi-dimensional, and certain growth potential: gaps in basic consumption, room for structural upgrades, deepening personalized demands, expanding the industrial chain, and breaking into international markets. Our goal is to use inclusive policies to boost basic consumption, leverage technological innovation to enhance industry value, develop targeted R&D for niche needs, and adopt a global perspective to expand market boundaries—helping more Chinese move from “drinking milk” to “drinking good milk” and “drinking the right milk,” and taking Chinese dairy to the world. This is the greatest confidence in the growth of China’s dairy industry.

“21st Century”: How do you feel about this year’s Two Sessions?

Wei Lihua: The most profound impression is the emphasis on pragmatism, unity, and progress. This year’s Two Sessions are a significant start to the “14th Five-Year Plan.” As a deputy to the National People’s Congress, I feel honored and responsible.

What moved me most is the high regard for the real economy. The government work report and the “14th Five-Year Plan” recommendations highlight “promoting high-quality development” and “developing new quality productivity,” emphasizing consolidating and strengthening the real economy. Dairy industry is a typical real economy—long industrial chain, strong driving effect, connecting millions of farmers and herders on one end and hundreds of millions of consumers on the other. The support policies for the real economy have strengthened our confidence in deepening our core business and pursuing innovation.

I am especially touched by the continuous improvement of the business environment. This year’s Two Sessions explicitly proposed “improving the legal and policy framework for promoting private economy, ensuring equal access to production factors, fair market participation, and effective protection of legal rights.” The “Promotion Law for the Private Economy” will be officially implemented on May 20, 2025. As a fundamental law for private sector development, its significance is profound. With its implementation and supporting policies, it not only provides a solid legal guarantee for fair market participation but also greatly boosts the confidence, bottom-line, and motivation of private entrepreneurs, further stimulating the creativity and development potential of the entire private economy.

During the conference, exchanges with deputies and committee members were very enriching. We share a high consensus on promoting industrial upgrading and safeguarding people’s livelihood. This atmosphere of unity and effort demonstrates the strong collective strength driving high-quality development across the country.