This report is selected and translated from the keynote speech by Song Jian, President of China's Academy of Engineering and Vice Chairman of the Chinese People's Political Consultative Committee, at the 2001 China International Fruits & Vegetables Fair held in Xiamen, China. It reveals some of the current thinking of Chinese leadership on vegetable and fruit development.

I. Differences between the fruit and vegetable industries in China and other Countries:

China has become the world's biggest producer of fruits and vegetables. Acreage and production of China's fruits and vegetables have increased rapidly over the past ten years. Fruit acreage reached 8.67 million hectares, with a production of 62.37 million MT, accounting for 18% and 13% of the world's total respectively. Production of apples and pears ranks first in the world for eight years in a row, and that of citrus ranks third, only after Brazil and USA, while production of litchee covers 70% of the world 's total. Vegetable acreage was 14.67 million hectares, and production 440 million MT, accounting for 35% and 66% respectively of the world's total, ranking first for five years in a row.

With the increase of production, the quality and variety structure have been optimized. Over 1,100 new varieties of vegetables have been popularized and a number of famous, unique, special or rare varieties introduced over the past ten years. The main cultivated varieties have been refined two or three times and the coverage of good varieties exceeds 80%. Improvements on apples, pears and citrus have hastened. Hong Fu Shi (Red Fuji) apples account for half of the total apple production, and Shui Jing (Crystal) pears become the major cultivated variety. Extremely early ripening and early ripening Wenzhou Mi Ju (sweet tangerines from Wenzhou), Qi Cheng ( Valencia oranges ), pomelos and other well received or new fruits have been popularized. Acreage and production of tropical and subtropical fruits such as litchee, longan and mango have also been expanded.

Though fruit processing in China has a very short history, after more than ten years of development, the overall technical system of fruit and vegetable storage, transportation and preservation has taken an initial form, and the overall processing capacity expanded. The processing system is of a considerable scale, while industrialized operations hastened and developed rapidly. Major processors such as Huiyuan Juice and Jianlibao have come into existence. Currently, storage capacity covers 20% of fruit production and the percentage of total fruit and vegetable production used for processing is increasing year after year.

Due to the support of the government and different sectors of the society, the fruit and vegetable industries in China have grown rapidly. The government has made more investments in the research and development of agricultural product processing over the past five years, which has been regarded as one of the most important projects for national research and one that the government will continue to attach importance to in the future. With the application of biological and information technologies, improvement of the processing industry will inject vitality into the fruit and vegetable industries.

Though they have made great progress, China's fruit and vegetable industries still lag behind those of the advanced countries.

The quality of local Chinese products is still at a low grade. Only a small portion of the production is used for processing and the quality is poor. Specialized, specified and standardized production has just taken an initial shape. Compared with the advanced countries, the external appearance of fruits and vegetables such as size, shape, color and evenness and the internal characteristics such as sweetness, minerals, vitamins and flavors are inferior. Only one third of all fruits is of good quality, 50% of ordinary quality and nearly 15% not up to the quality requirement. Some varieties have a low juice rate and a poor flavor, not suitable for processing. Only 5% out of the total production is competitive in the world market.

Most fruits are consumed raw or fresh and about 10% of the production is processed. However, in the advanced countries, 40-70% goes to the processing industry. The ratio of the processing value and the natural harvest value is 0.45 to 1, while for USA and Japan, it is 3.7 to 1 and 2.2 to 1 respectively. Fruits are mainly slightly processed, only few are further processed. Most fruits are ordinary products and only few have good quality. For vegetables, most of them are consumed fresh as well, with less than 5% used for processing and few as instant or semi- finished products.

The processing facilities and highly accurate testing equipments are few in number and most of them are inadequate and poorly automated. However, in the advanced countries, fruit and vegetable processing has its own modern production system, which is highly mechanical and automated. Due to backward transportation and storage facilities, the wastage of fruits and vegetables may reach 20-30% each year while in the advanced countries, the number is only 5%. Most Chinese processing enterprises lack the standard production flow and testing system and the technical index. Most of the time the processing is manually controlled, resulting in quality unstableness. While in advanced countries, full use of hi-tech testing facilities and timely and accurate adjustment of the technical specifications guarantee a stable quality. The scale and productivity of the processing enterprises also lag far behind those in the advanced countries. There are over 3,100 beverage enterprises in China, with a total output of 10 million MT and an annual production of 500 KG per capita, among which 19 have an annual output of 100,000 MT, 6 have 200,000 MT. The total output is less than either Pepsi Cola or Coca Cola of USA.

There are also gaps in the fields of variety improvement, cultivation, pest and disease prevention, post-harvesting processing between China and other countries, especially post-harvesting storage, preservation and further processing, which are bottlenecks to further developments of China's fruit and vegetable industries.

II. Seize the opportunity to promote the fruit and vegetable industries:

China is going to build a prosperous society in the 21st century. It will speed up modernization and implement the third stage strategic plan. China's agricultural reform and development will be focused on the readjustment of the agricultural structure and the increase of farmers' income, on the transformation of the rural economic system and modes of economic growth, on the improvement of the overall quality and benefit of agriculture and of the rural area in order to meet the needs of building a prosperous society.

Grains in China currently are experiencing a considerable structural surplus. Focus will be placed on the development of the livestock industry, fruit and vegetable industries and processing of agricultural products while the agricultural structure is being readjusted. The vegetable and fruit industries rank second and third in China, only after grains, taking up a considerable portion of the processing industry. They are among the first in China to implement the market circulation system, taking the lead in industrialized operations. As a labor-intensive industry, production of fruits and vegetables require massive amount of labor and low costs. It is among the few industries which will be competitive after China's accession to the World Trade Organization. The price of China's major fruits and vegetables are lower than that in the world market. For example, apples are 41% lower, Ya pears 79% and citrus 47% and vegetables one- fifth to one-eighth of the world price. Therefore, after China's accession to the WTO, fruits and vegetables have more advantages in price, compared to grains. It is of significance to quicken the development of the fruit and vegetable industries, especially that of fruit and vegetable processing under new circumstances.

China is firmly implementing its strategy of making the country prosperous by promoting science and education. To depend on science and technological advancements and to take various measures to promote the fruit and vegetable industries is an important part of implementing the strategy.

The selection and cultivation of new varieties of fruits and vegetables is to be hastened for the readjustment of the variety structure. Ordinary selection and genetic selection will be integrated to change the situation of no suitable special varieties for processing. The improvement and development of freshly consumed varieties, introduction and popularization of special varieties for processing, development and popularization of pollution free technology to ensure reasonable distribution of freshly consumed varieties and varieties for processing are the major direction for the development of the fruit and vegetable industries.

Processing enterprises of fruits and vegetables are to be established to expand industrialized operations. First, to promote big groups and companies or cooperatives to establish fruit and vegetable bases to consolidate the household operations into large scale operations and to link to the market to hasten the process of integrating production, processing and sales. Second, to give full play to the mechanism of integrating companies or cooperatives with farmers to increase the farmers' incomes and the enterprises' benefits. Third, to develop the modern fruit and vegetable industries into those which integrate science, technology and trading to establish China's own fruit and vegetable brand names. Fourth, to enlarge the proportion of the processed products in the total production of fruits and vegetables and to enhance the utility of the raw materials for processing to change the backward status in storage and processing to develop China into a country strong in processing. Fifth, to face the domestic and international markets to develop high-valued new products and explore the market through various products to expand exports. The above-mentioned are the strategic targets for the future development of the fruit and vegetable industries.

The processing industry of fruits and vegetables will be equipped with advanced equipment and technologies. China will make full use of the domestic research and development force to enhance mechanization and automation of the processing facilities and routinize the fruit and vegetable industries according to the international quality standards and requirements. To establish an overall quality control system in raw materials, processing and circulation and to utilize the new technologies such as information technology and biological technology are the basis and methods to promote the fruit and vegetable industries.