China’s Rising Fruit and Vegetable Export Challenge U.S. Industry
1.China’s Rapid Rise in Exports
Chinese fruit and vegetable exports are mainly processed products, accounting for 60 percent of the total value of fruit and vegetable exports in 2002-04 and about 12 percent of global trade. Exports of processed products more than doubled between 1992-94 and 2002-04 (fig. 1). Leading exports include vegetable mixes (prepared and preserved but not frozen), frozen vegetables, and mushrooms. China’s exports of processed fruit are relatively small, but a number of frozen and processed fruit items (jams, jellies, citrus, dried grapes, frozen strawberries, and apricots) registered rapid percentage growth during the most recent period (2002-04).
While most of China’s vegetable exports are processed, fresh vegetable exports nearly tripled between 1992-94 and 2002-04. Fresh vegetables are now the second-largest fruit and vegetable export category, accounting for 16 percent of export value and about 5 percent of global trade. Two products, garlic and mushrooms, account for more than half of fresh vegetable exports, with a combined average value of $481 million per year during 2002-04. Other leading fresh vegetable exports include onions, carrots, and radishes (table 1).
Fresh fruit, more than tripling its export value between 1992-94 and 2002- 04, accounts for 8 percent of China’s fruit and vegetable exports. Apples are the primary fruit export, accounting for more than half of the annual export value. Other major fresh fruit exports include pears and tangerines.
Fruit and vegetable juices account for nearly 6 percent of fruit and vegetable exports, but growth in apple juice exports has presented a direct challenge to U.S. producers. Concentrated apple juice accounted for nearly 90 percent of China’s total value of juice exports in 2004. China’s apple juice exports grew from $5 million annually in 1992-94 to $251 million in 2002-04, and its share of global export value of apple juice grew from less than 1 percent to more than 18 percent. Since 2001, China has been the world’s leading apple juice exporter.
The remainder of China’s fruit and vegetable exports includes pulses (7percent) and tree nuts (3 percent). In contrast to the remarkable growth in other fruit and vegetable categories, pulse and nut exports have been relatively stable over the past decade. China’s exports of nuts are primarily chestnuts, walnuts, pine nuts, and gingko nuts.
China’s export markets for fruits and vegetables are mainly in Asia. More than 40 percent of processed fruit and vegetable exports by value go to Japan. Nearly three-fourths of China’s fresh vegetable exports went to its Asian neighbors in 2002-04. Major markets included Japan (31 percent),Association of Southeast Asian Nations (ASEAN) (25 percent), South Korea (7 percent), and Hong Kong (6 percent). Garlic, mushrooms, onions, carrots, and radishes accounted for over three-fourths of the 2002-04 total. More than half of Chinese fresh fruit exports go to the ASEAN region, which includes 10 member countries—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Other important markets include Russia, Hong Kong, and to a much lesser degree, Canada. China’s apple juice exports, in contrast, have a worldwide market with most juice exports shipped to countries outside Asia.
Table 1
China’s major fresh produce exports
Average value,
Item 2002-04 Major markets
$ million
Fresh fruit 405
Apples 211 ASEAN1 (56%), Russia (13%),
European Union (12%)
Pears 77 ASEAN (56%), Russia (12%),
Canada (7%)
Tangerines 65 ASEAN (70%), Russia (12%),
Canada (10%)
Oranges 8 Hong Kong (65%),
ASEAN (26%)
Fresh vegetables 843
Garlic 37 ASEAN (39%),
European Union (7%),
U.S. (7%), South Korea (4%)
Mushrooms 108 Japan (84%),
European Union (8%),
U.S. (4%)
Onions 73 Japan (51%), Russia (26%),
ASEAN (15%),
South Korea (5%)
Carrots 46 Japan (27%), South Korea (23%),
Hong Kong (21%)
Radishes 43 Japan (63%), South Korea (32%)
2.Points of Rivalry With the United States
China’s emergence as a fruit and vegetable exporter presents a new source of competition for U.S. producers, mainly in three categories: apple juice, fresh apples, and fresh vegetables (figs. 2 and 3). China exports apple juice (mainly concentrated) directly to the United States, Japan, and Canada, and its exports of fresh apples and several types of vegetables compete with U.S. exports in Asian markets. China’s largest export category, processed fruits and vegetables, does not yet pose a serious challenge to the United States because the United States and China have been exporting mostly different types of processed fruits and vegetables (Huang, 2002). However, China’s rising exports of fresh vegetables and apples have coincided with falling market share of U.S. exports in Asian markets.
2.1Fresh Fruit Exports
U.S. fresh fruit exports face competition from China’s exports in a handful of Asian countries that are the largest markets for U.S. fresh fruit outside of Canada and Mexico, which receive nearly half of U.S. fresh fruit exports. Four East Asian markets—led by Japan and followed by increasingly affluent Taiwan, South Korea, and Hong Kong—account for more than three-fourths of the U.S. fresh fruit shipments to Asia. Southeast Asia, in comparison, is a distant second for aggregate U.S. fresh fruit exports to Asia. Southeast Asia, however, is almost as important as East Asia for two major U.S. fresh produce sales to Asia—apples and grapes.
China and the United States compete directly in fresh apple exports. The average value of China’s apple exports, with about two-thirds of the shipments to its neighboring Asian countries, was $211 million during 2002-04 (table 1).
China’s other major fresh fruit exports—Asian pears and tangerines—are not exported in large quantities by the United States, and China is not currently a major exporter of the two leading U.S. fresh fruit exports to Asia—oranges and grapes. However, with a value of $115 million, apples comprise 12 percent of U.S. fresh fruit exports to Asia (table 2), and they are facing a growing challenge from China. Since 2003, the volume of China’s global apple exports, reaching 609,000 metric tons for that year, has surpassed that of the United States (USDA, 2006).
U.S. apples compete directly with Chinese exports in Southeast Asia. More than half of China’s apple exports go to ASEAN and 13 percent to Russia. U.S. apple exports to Asia are shipped mainly to ASEAN (46 percent) and Taiwan (31 percent). Taiwan does not allow entry of Chinese apples for phytosanitary reasons. Therefore, competition from China for U.S. fresh fruit exports is primarily within the ASEAN region for apples, which took a nearly 15-percent share of U.S. apple exports by value in 2002-04.
The rapidly growing countries of ASEAN with tropical climates—particularly Indonesia, Malaysia, the Philippines, Singapore, and Thailand—are important markets for temperate fruits like apples. U.S. apple exports to ASEAN surged in response to growing demand in the early 1990s, but Chinese exports have grown fast particularly in recent years as China’s production increased, quality standards improved, and some Asian companies began growing apples in China for export. China-ASEAN trade in fruits further accelerated with implementation of the “Early Harvest” program of the China-ASEAN Free Trade Agreement, signed in late 2002, which slashed or eliminated tariffs on a variety of goods, including fruits (USDA, September 2004).
China’s exports to ASEAN, China’s largest traditional export market for apples, increased almost without interruption since the 1990s. U.S. apple exports to ASEAN also increased steadily until late 1997, when the region suffered a severe economic downturn during the Asian financial crisis.
2.2Juice Exports
China’s apple juice exports present the most direct challenge to U.S. producers. The United States has been China’s biggest market for its escalating apple juice shipments since 1997. On average, 43 percent of China’s apple juice exports went to the United States during 2002-04.
China has substantially boosted its apple juice shipments to the United States, from less than $1 million in the early 1990s to $108 million during 2002-04.
The rapid rise of apple juice imports from China led the U.S. Apple Association to file an antidumping complaint in 1999. Since May 2000, the United States has imposed antidumping duties on nonfrozen apple juice concentrate from China. These duties, however, are imposed only against particular Chinese companies and not against the industry as a whole (USDA, 2002). In November 2002, the U.S. International Trade Commission (USITC) waived the duties on five Chinese apple juice processors, and in February 2004, USITC waived duties on an additional 10 Chinese processors (USDA, 2003; USDA, September 2004). The volume of apple juice entering the United States from China has continued to increase in spite of the duties. China has surpassed Argentina and Chile as the leading imported apple juice supplier to the United States since 2002. Chinese apple juice accounted for a 56-percent share by volume in the U.S. import market in 2004 .
During China’s export expansion, U.S. apple juice exports fell from a peak of $75 million in 1995 to $17 million in 2002-04. Other major markets for China’s apple juice exports include the two leading destinations for U.S. apple juice exports: Japan (14 percent of Chinese exports) and Canada (5 percent). The United States, once the leading supplier for both of these countries’ apple juice imports, saw its share drop significantly over the past several years, while China’s market share increased almost without interruption. In Japan, China’s share rose from 5 percent in 1992-94 to nearly 41 percent in 2002-04, while the U.S. share declined from 35 percent to 5 percent. Similarly, China’s share in Canada surged from almost zero to 40 percent, while the U.S. share declined from 34 percent to 21 percent during the same period (fig. 8, panels b and c).
From: Sophia Huang and Fred Gale. China’s Rising Fruit and Vegetable Export Challenge U.S. Industries [J]. Economic Research Service. Feb., 2006, 1-20