This paper outlines the current situation of contract transactions for medium-scale fruit processing companies in China, as well as the changes in the supply of raw materials and their effects before and after signing of contracts. Based on interview surveys of the heads of processing companies and the agricultural bureau in Mancheng County, Hebei Province, the following points are identified. The implementation of contractual transactions by processing companies has resulted in shortening the number of days required to supply raw materials, ensuring that the raw materials are fresh and the unit price of the raw materials is reduced. Therefore, contractual transactions have promoted the expansion of sales areas, processing volume and sales of processed goods. Depending on the processing company's motivation for signing the contract, the final processed products are also different. However, the product structure of companies that have signed contracts for subsidies has not changed notably. As a result, contract driven, manufacturing and sales oriented medium-sized processing companies have made progress in contract transactions for raw materials, providing these companies significant advantages.
