TO say that Apple Daily has had its fair share of teething problems is an understatement. The rocky path which the newly launched Chinese paper has trod in the past month is a stark warning to all those who care about freedom of the press. Apple Daily, which marks its one-month anniversary today, has survived distribution problems, triad intimidation, a boycott by artists and official suppression inside China. The business interests of its founder, avowed anti-communist Jimmy Lai Chi-ying, are also rumoured to have been affected as Chinese authorities reportedly ordered a clampdown on Giordano, the clothing-chain he partly owns. On the first day it hit the streets, the distribution company which promised to deliver the paper to convenience stores broke the agreement. A week later, several thousand copies of the paper were dumped into the Macau harbour by gangsters who had reportedly warned newspaper hawkers against selling it. Despite protests by local politicians against an earlier refusal, Apple's political reporters have again been refused permission to cover the forthcoming meeting of the Preliminary Working Committee in Beijing, as well as the Liberal Party and Education Commission's separate visits to the Chinese capital. Chinese officials have not explained the reasons behind their decision, but internal documents are said to have branded the paper as 'anti-China and stirring up trouble in Hong Kong' and decreed that no official should entertain its reporting requests. The chief editor, of Apple Daily, Loh Chan, said he found it odd that a Hong Kong newspaper was denied permission to cover PWC meetings in which Hong Kong issues would be discussed. On whether the refusal of permission was related to Lai's anti-communist stance, Loh said: 'Even Deng Xiaoping said the Communist Party was not afraid of criticisms. The Basic Law and the Joint Declaration both guarantee the freedom of the press. Are we to redefine what this term means?' In the meantime, Apple's entertainment reporters have met with a wall of silence from some of Hong Kong's most established artists, who are dismayed by alleged intrusion of their privacy by Apple staff. The paper admitted that some bogus tip-offs had led it to follow three celebrities, but denied it had unfairly probed the public figures' private lives. However, this did not stop the Hong Kong Performing Artistes Guild organising a three-day boycott, ostensibly aimed against the press as a whole, but which was in fact targeted at Apple and its sister publications. 'We will continue to do what we think is right,' said Loh. 'No one can control what we publish.' Apple's decision to publish an horrific picture of the bodies of a woman and her daughter who plunged to their deaths in a murder-suicide case has also sparked concern that the paper will drive sensationalism in Chinese newspapers to an even higher level. Including Apple, four Chinese newspapers published similar pictures of the bodies which had been ruled indecent by the Obscene Articles Tribunal. One thing the paper has done to relieve itself of some aggravation is its decision to sell at $5 from today, as do other Chinese newspapers. In falling in line with the market practice, the paper has eliminated a major source of envy and pressure from its established rivals. NO longer will readers be able to buy the paper for $2 after redeeming vouchers worth $3. Instead, the paper has come up with another incentive for readers, who will get a free T-shirt with a bull's eye by presenting five vouchers published in the paper, whose pricing strategy has invited much criticism from established newspapers, which affirmed the merit of maintaining the $5 cover price in a joint statement last month. The chairman of the Hong Kong Newspaper Society, Tang Lap-yan, has warned of the dangers of a price war. Now that Apple is selling at the same price as its competitors, analysts fear its circulation could suffer. For the past month, the paper has claimed success in selling more than 220,000 copies a day. Not only has its clean layout and use of colour succeeded in attracting readers of established newspapers, it has won the support of people drawn by the discounted cover price. An unofficial survey is said to have found the circulations of some established Chinese newspapers had dropped by between five and 20 per cent since Apple was launched. However, as the paper's novelty wears off, stacks of it are occasionally seen piling up behind newsstands. Whereas it used to be snatched up by eager readers early in the morning, it is now no longer difficult to buy it late in the afternoon. Loh said the paper had all along said the $2 campaign was a short-term promotional strategy, although others saw it as a full-scale price war. 'We do not agree there should be a uniform price for all newspapers, but we want to put that issue aside and compete on a level playing field with others, based on quality,' he said. On whether the $5 price would affect the paper's circulation, Loh noted that no other new paper had been able to sustain a 220,000 circulation for a month. 'Maybe many people want to have a new paper,' he said. Apple has undoubtedly made its presence felt and many believe it will have no problem maintaining a respectable circulation. The question is how long Lai is willing to run the paper at a loss. Although the paper has received a fair amount of advertising support, advertising revenue will have to grow much more to be able to cover costs of maintaining a 700-strong staff and higher than average distribution costs. Lai has vowed he is prepared to pump $1 billion into the venture in the next three years. To improve his cash position, he is planning to list his Next magazine group later this year. Stock analysts have privately wondered if investors would be interested in putting their money in a venture whose political risk is so high when 1997 is only two years away. But if Lai were to apply conventional wisdom in mapping his plan, he would not have launched a new paper now. Nor would he have launched Next magazine, which has become a huge success.