Technological investments in China’s vegetable sector and
port facilities have paved the way for an expansion in its vegetable
exports, particularly to Japan, where China and the United States
have long been the two leading fruit and vegetable suppliers. In
1999, China displaced the United States as the leading supplier
for Japan, and has since improved that position.
Japan is second only to Canada as the top market for U.S. fruits
and vegetables, receiving $1.3 billion—or nearly one-fifth—of
U.S. fruit and vegetable exports during 1999-2001. French fries,
processed sweet corn, and fresh produce such as grapefruits, cherries,
oranges, and broccoli are top U.S. exports to Japan. In fact, Japan
led the rapid export growth of U.S. produce to Asia between the
mid-1980s and mid-1990s, when advances in transportation, shipping,
and handling enabled trade in fresh, versus processed, fruits and
vegetables. Asia surpassed the European Union as the leading destination
for U.S. fruit and vegetable exports outside North America in the
early 1990s.
China targeted Japan as its top market for fresh and processed
vegetables during the 1990s. Starting with a 6-percent share of
Japan’s fresh vegetable import value in 1990, China became
Japan’s leading supplier by 1996 and reached a 38-percent
share in 2001. China’s exports included broccoli, onions,
and asparagus, competing with leading U.S. vegetable exports.
Similarly, China’s share of Japan’s import market
for processed vegetables and fruits more than doubled in the 1990s
to reach 53 percent in 2001. The U.S., however, remains a strong
competitor in the Japanese market for frozen potatoes and processed
sweet corn, where China is not a player. Overall, the U.S. share
of Japan’s import market stood at less than 19 percent for
fresh vegetables and 21 percent for processed products in 2001.
The respective shares for other countries in the Japanese market
were 43 percent and 26 percent in 2001.
China’s rising vegetable exports to Japan were bolstered
by many factors. With its low production costs and geographic proximity
to Japan, China attracted foreign investment, especially from Japanese
trading companies. These businesses provided the seeds, spores,
and production/packing techniques, and imported the harvest for
Japanese retailers. Improved ocean freight service from major Chinese
ports to Japan also increased China’s competitiveness.
Recent trade friction with Japan over chemical residues on Chinese
vegetables could prompt changes in production practices and greater
inspection. These added costs could reduce China’s competitiveness.
However, with its low labor costs, China will likely continue to
be a formidable competitor with the United States in Japan, particularly
for fresh vegetables.
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