Background Information on the Chinese Fruit Sector

The People's Republic of China was established in 1949, ushering in an era of socialism and government centralization. Beginning in 1978, China's economy gradually transitioned from centralization to the transitional and somewhat more privatized society of today. Prior to 1978, government policies aimed at controlling food supplies and prices were common. Food rationing in 1953 was aimed at guaranteeing food for urban dwellers and included price administration by the government (Dong and Fuller, 2006). Agricultural productivity and the availability of food increased dramatically when laws that decentralized agricultural production were enacted in 1981. Food rationing and market centralization were abolished later in urban areas for non-staple food items, like meat, vegetables, and fruits, among others. All market centralization for food items in China was abolished in 1993. Privatization and market reforms throughout the late 1980s and into the 2000s made China the leading developing nation for Foreign Direct Investment (FDI) and positioned the country as an important global source of low cost labor in industries as diverse as food processing and electronics manufacturing (Yan, 2005). In 2004, approximately 28 percent of China's population was employed in the agricultural sector (Gao, 2007).