Global Trade in CHINA - External trade
Global distribution of Chinese exports in 2006 as a percentage of the top market International trade makes up a sizeable portion of China's overall economy. The course of China's foreign trade has experienced considerable transformations since the early 1950s. In 1950 more than 70 percent of the total trade was with non-Communist countries, but by 1954, a year after the end of the Korean War, the situation was completely reversed, and trade with Communist countries stood at about 75 percent. During the next few years, trade with the Communist world lost some of its standing, but it was only after the Sino-Soviet split of 1960, which resulted in the cancellation of Soviet credits and the withdrawal of Soviet technicians, that the non-Communist world began to see a speedy recovery in its position. In 1965 China's trade with other socialist countries made up only about a third of the total.
Being a Second World country at the time, a meaningful segment of China's trade with the Third World was financed through grants, credits, and other forms of assistance. At first, from 1953 to 1955, aid went mainly to North Korea and North Vietnam and some other Communist states; but from the mid-1950s large amounts, mainly grants and long-term, interest-free loans, were promised to politically uncommitted developing countries. The principal efforts were made in Asia, especially to Indonesia, Burma, Pakistan, and Ceylon, but large loans were also granted in Africa (Ghana, Algeria, Tanzania) and in the Middle East (Egypt). However, after Mao Zedong's death in 1976, these efforts were scaled back. After which, trade with developing countries became negligible, though during that time, Hong Kong and Taiwan both began to emerge as major trading partners.
Since economic reforms began in the late 1970s, China sought to decentralize its foreign trade system to integrate itself into the international trading system. On November 1991, China joined the Asia-Pacific Economic Cooperation (APEC) group, which promotes free trade and cooperation the in economic, trade, investment, and technology spheres. China served as APEC chair in 2001, and Shanghai hosted the annual APEC leaders meeting in October of that year.
China's global trade totaled $324 billion in 1997 and $151 billion in the first half of 1998; the trade surplus stood at $40.0 billion. China's primary trading partners were Japan, Taiwan, the U.S., South Korea, Hong Kong, Germany, Singapore, Russia, and the Netherlands. China had a trade surplus with the U.S. of $49.7 billion in 1997 and $54.6 billion in 1998. Major imports were power generating equipment, aircraft and parts, computers and industrial machinery, raw materials, and chemical and agricultural products.
In 1998, China was in its 12th year of negotiations for accession to the World Trade Organization(WTO)—formerly the General Agreement on Tariffs and Trade (GATT), and had significantly reduced import tariffs. Previously in 1996, China had already introduced cuts to more than 4,000 tariff lines, reducing average tariffs from 35% to 23%; further tariff cuts that took effect October 1, 1997, decreased average tariffs to 17%. To gain WTO entry, all prospective WTO members were required to comply with certain fundamental trading disciplines and offer substantially expanded market access to other members of the organization. Many major trading entities—among them the United States, the European Union, and Japan—shared concerns with respect to China's accession. These concerns included obtaining satisfactory market access offers for both goods and services, full trading rights for all potential Chinese consumers and end-users, nondiscrimination between foreign and local commercial operations in China, the reduction of monopolistic state trading practices, and the elimination of arbitrary or non-scientific technical standards. China and other WTO members worked to achieve a commercially viable accession protocol.
In 1999, Premier Zhu Rongji signed a bilateral U.S.–China Agricultural Cooperation Agreement, which lifted longstanding Chinese prohibitions on imports of citrus, grain, beef, and poultry. In November 1999, the United States and China reached a historic bilateral market-access agreement to pave the way for China's accession to the WTO. As part of the far-reaching trade liberalization agreement, China agreed to lower tariffs and abolish market impediments after it joins the world trading body. Chinese and foreign businessmen, for example, would gain the right to import and export on their own – and to sell their products without going through a government middleman. After reaching a bilateral WTO agreement with the EU and other trading partners in summer 2000, China worked on a multilateral WTO accession package. China concluded multilateral negotiations on its accession to the WTO in September 2001. The completion of its accession protocol and Working Party Report paved the way for its entry into the WTO on December 11, 2001, after 16 years of negotiations, the longest in the history of the General Agreement on Tariffs and Trade.
With bilateral trade exceeding US$38.6 billion, China is India's largest trading partner. Shown here is a Chinese container ship unloading its cargo at Jawaharlal Nehru Port, Navi Mumbai, India.
China's global trade exceeded $2.4 trillion at the end of 2008. It first broke the $100 billion mark in 1988, $200 billion in 1994, $500 billion in 2001 and $1 trillion mark ($1.15 trillion) in 2004. The table below shows the average annual growth (in nominal US dollar terms) of China's foreign trade during the reform era.