Comparing apples to apples
By Craig Troianello; Yakima Herald-Republic; December 19, 2004
GUANGZHOU, China — In his small, second-floor office overlooking
the sprawling Lishui Fresh Fruit Terminal Market, Cheng Wei De offers
two bowls of Red Delicious apples.
One is Washington grown, the other is Chinese.
The Chinese apples aren't as crisp and sweet as Washington's,
but they sell for less than half the price, Cheng says. If Washington
apple prices can be lowered, they'd be better able to compete, he said.
The observation cuts to the heart of many of the issues
surrounding China's emergence as the largest apple grower in the world:
Its apples are cheap and plentiful. But for consistent high quality,
many turn to imports from Washington.
While Chinese apple quality improves each year, Cheng estimates
it will take at least five years to reach a quality comparable to
Cheng isn't a casual observer. He's been importing apples from
Washington since 1993, the first year it was allowed. Last year, he
purchased 103,000 boxes, including apples from Washington Fruit of
Yakima and Columbia Pack of Wenatchee.
As living standards rose for the average Chinese in the last
decade, so did sales of Washington apples, said Cheng, owner of Hua
Sheng Fresh Fruit Trades, which resells to small marketers and
supermarkets in China.
His sales were among the more than 1.8 million boxes of
Washington apples that last year flowed into Hong Kong and China,
making this the fifth-largest export market for Washington state
apples. Only Mexico, Canada, Taiwan and Indonesia are larger.
Consistent quality is what's promoted in China by the Washington State
And in a country regularly racked by adulterated-food scandals —
earlier this year, tainted baby food killed dozens of infants in Anhui
and Shandong provinces — American products enjoy a certain trust.
"The U.S. is held in such high esteem that it rubs off on
consumer products," said Tracy King, Apple Commission export manager.
Apple importer Wong Wing Fai, who also has an office at the
Lishui Market, estimates it will take far more than a decade for
China's packing-line technology and capacity to catch up with the
Like Cheng, he's been importing Washington apples for years. He
also brings in Washington cherries, as well as grapes and oranges from
elsewhere in the United States.
Like a number of exporters interviewed for this story, he
regularly travels to Central Washington to buy apples and tour packing
In the past decade, China has made staggering advances in
production and exporting, but the nation still faces significant
challenges in transportation, storage and quality control.
In the United States, some worry that China's apple industry
will follow an all-too-familiar trend, such as in furniture and
textiles, in which thousands of American jobs and entire businesses
have been lost to low-cost Chinese production.
Ten years ago, cold-storage facilities and mechanized packing
lines were rare in China. Now, both are being built at record rates.
With China's apple industry growing in sophistication, Central
Washington could be vulnerable. As this nation's largest
apple-producing region, Central Washington grows more than half of all
American apples. Tens of thousands of jobs are tied to the $1.5 billion
apple industry. It is the state's single largest agricultural product.
At C.M. Holtzinger Fruit's office on a quiet north Yakima
street, men and women wear headsets and monitor market data from
computers atop a large common table surrounded by chairs intended for
long hours of use.
Similar rooms — some with world maps and wall clocks reflecting
time zones across the globe — can be found in packing and trading
companies across Central Washington. Here in these sales rooms, deals
are struck to move apples from packing rooms to wholesalers or, in some
cases, directly to supermarket shelves. It's a demanding job, but the
successful are well-compensated: The best salespeople can make up to
$200,000 a year.
And increasingly, they are striking deals to sell in Hong Kong
Once an agreement is struck, apples are typically placed aboard
refrigerated 40-foot containers holding more than 1,000 boxes. The
containers take a short ride to Seattle or Tacoma. From there, the
containers make a two-week Pacific crossing to the massive docks of
Under an early 1990s trade agreement, United States growers got
their foot into China's market by agreeing to ship only Red and Golden
But mysterious things happen in Hong Kong. Apple varieties not
covered by the trade agreement regularly find their way north into
mainland China. Sometimes box lids are changed. Sometimes a container
load of apples is opened to reveal Red Delicious, but the layer behind
it may be Granny Smiths, Galas or Cameos.
There's an old expression in China: "Heaven is high and the
emperor far away." And Hong Kong is 1,227 miles from the authority of
Officially, exports of Washington apples to China stood at a
high of 49,242 boxes last year. But an estimated 70 percent of the 1.8
million boxes shipped to Hong Kong last year found their way onto the
It's a vast gray market, one vulnerable to crackdowns or other
market shifts that sometimes have sellers scratching their heads.
Exports into China took a nosedive last April, for example, but no one
seems to know why.
Getting apples from Hong Kong to mainland China might involve a
half-dozen different middlemen, all with their hands out, said one
person familiar with the system. If even one of them feels slighted or
left out, the entire network can get shut down.
Washington growers would like to export a wide variety of apples to
China. But they worry any push might prompt China to work harder to get
its apples into the United States.
Docks are starting point
More than three-quarters of all fruits imported to China arrive
at Guangzhou's docks, after a 100-mile boat ride up the Pearl River
from Hong Kong. From there, most of it is trucked to one of two
sprawling wholesale markets.
The Lishui Market is one. The other is the 10
million-square-foot Jiangnan Wholesale Fruit Market that opened last
December. Both offer a vast, and almost bewildering, array of fruits
from around the world.
At the Jiangnan Market, vendors sell their fruit beneath
towering, open-air steel sheds. Around them, forklifts compete with
hand trucks and even bicycles in moving everything from oranges and
melons to grapes and onions.
From here, apples might get shipped across town or be loaded
aboard a non-refrigerated truck piloted by three drivers who will take
shifts on a nonstop, five-day, 2,500-mile delivery to northern China.
Each day, an average of 67,000 boxes of imported and domestic
apples are sold here. Buyers stroll through the aisles of boxes
comparing prices, looking over the fruit and chatting with vendors.
Larger sales are typically conducted in the nearby offices of the
Sales typically pick up in the weeks prior to Chinese New Year
and other holidays when fancy apples are traditionally presented as
gifts and served more often. During those times, as many as 209,000
boxes of apples will change hands in a day.
A visitor can quickly spot apples from Borton Fruit and
Washington Fruit, both of Yakima. There's Cariboo brand from Brewster,
Starr Ranch of Wenatchee, and others from across Central Washington.
About 40 percent of the imported apples come from Washington,
according to Robin Chung of Marketing Plus, a Hong Kong-based company
representing the interests of the Washington state Department of
Agriculture and the Washington Apple Commission.
The other 60 percent of imported apples are split between New
Zealand and Chile.
Similar statistics are reported at the region's other, and
older, Lishui Fresh Fruit Terminal Market in nearby Nanhai City.
In mid-October, a box of Washington Red Delicious was selling for the
equivalent of $24.39, down from $31.70 during National Day, a weeklong
holiday earlier in the month celebrating the founding of the People's
Republic of China. A box of Chinese Fujis might sell for
less than $12.
When operating at full throttle in the morning, the Jiangnan
Market can nearly overwhelm the senses. There's simply too much to
absorb. Aisles of boxes stretch out for hundreds of yards.
It seems the world's inventory of fruit is on display: kiwis,
pears, oranges, plums, bananas, star fruit, melons of all kinds and the
durian — a spiky, bowling-ball-sized fruit with a flesh tasting of
pudding and a smell likened to an outhouse.
Forklifts roar, vendors shout, trucks echo under the loading of
cargo. And at a quick glance the distinctive red, white and blue labels
denoting Washington apples appear legitimate.
But a closer look reveals otherwise.
The printing is so blurry that the word Washington is barely
The labels are fake, says Victor Wang, a Guangzhou-based
marketing manager for the Washington Apple Commission. He does not seem
surprised by the discovery.
Like DVDs, CDs and software, counterfeit apple labels and boxes
regularly surface in China.
"We get copied all the time," said Tracy King of the Apple
Commission. "It's a big concern, but frankly there's not much we can do
about it. If Microsoft and Disney with their lawyers and millions can't
solve their problems, then the Washington Apple Commission can't do
"It's a huge problem for some growers, but over time the
problems will take care of themselves," he said.
It's already less of an issue in larger cities. Rural consumers
might not be able to spot the difference, but sophisticated urban
consumers aren't fooled, King said.