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June 2004, World Apple Report Highlights

China Enters New Phase
China has bludgeoned its way onto world markets for fresh apples, fresh pears and concentrated apple juice by its willingness to sell below all other competitors. However, China will increasingly be required to meet global retailer standards for quality, safety, traceability, etc. To sustain its apple and pear industries, China will have to carve out more profitable niches in world markets. It will either have to develop new levels of technical and managerial skills internally or gain those skills through hiring foreign managers or building alliances with foreign firms. This will present many challenges for foreign individuals or firms that want to share in the potential of the Chinese industry.

Hong Kong: Once More the Unexpected
Hong Kong has been confounding the experts for decades. With limited natural resources, it became one of the original Asian Tiger economies. Hong Kong provided much of the marketing and technical expertise China needed as it liberalized its economy in the 1980s and 1990s. After Hong Kong reverted to Chinese control in 1997, most people expected it to suffer greater political interference from China. In fact, Chinese political interference has been limited, but the Hong Kong economy has gone into a tailspin as its Asian markets have crumbled for unrelated reasons. Demand for many products including fresh apples and fresh pears has fallen. Hong Kong's future economic success may be heavily dependent on continued growth in China.

WTO Frowns on Cotton Subsidies
The WTO ruling that U.S. cotton subsidies break international trade rules could have broad implications for the future path of negotiations on agricultural trade liberalization. Similar challenges may follow to other subsidies provided by the U.S., EU, Japan and other developed countries. The ruling also implies that developed countries cannot use reductions in subsidies as a bargaining chip in negotiations with developing countries. Appeals of the cotton ruling may continue for several years, but the ruling could mark a significant turning point for the entire WTO process.

Special Statistics
World Apple Export Forecast to 2010 (table).
Hong Kong: Disposition of Fresh Apple Imports, 1995-2003 (chart).
Southeast Asia: Share of Imported Fresh Apples, 1994-2002 (chart).

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