China's emergence as a fruit and vegetable exporter presents a new source of competition for U.S. producers. China's fruit and vegetable exports have increased most rapidly in three categories: apples, apple juice, and fresh vegetables. Since 2003, China's apple exports have surpassed those of the United States and have made inroads into major U.S. export markets in Asia. China is now the world's leading exporter of apple juice, and U.S. apple juice producers face both import competition and loss ofexport markets. China's exports of processed fruits and vegetables do not yet pose a serious challenge to the United States, because the two countries do not export the same types of products. However, China's rising exports of fresh vegetables have begun to compete with U.S. exports to Asian markets, and in some cases U.S. market shares have slipped. However, such rapid export growth on the part of China may not be a long-term phenomenon. Growing domestic demand for fruits and vegetables is likely to reduce the supply available for export. As Chinese household incomes rise, fruit and vegetable consumption will rise, as will the variety demanded. Several important U.S. horticultural products are already popular among high-income Chinese households. Moreover, as the growth in the Chinese economy deepens, income gains will be spread more widely over the Chinese population. In the coming years more households will likely emulate the consumption patterns of the top-earning households, and Chinese consumption of fruits and vegetables could rise sharply.
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