Global Trade in CHINA - External trade

China’s Major MerchandiseTrading Partners in 2016 ($ billions)

China’s Regional and Bilateral Free Trade Agreements

The Chinese government has maintained an active policy of boosting trade and investment ties around the world, especially with countries in Asia. To that end, China has entered into a number of regional and bilateral trade agreements, or is in the process of doing so. China currently has free trade agreements (FTAs) with 23 partners, including with the 10 countries that make up the ASEAN, Australia, Chile, Costa Rica, Hong Kong, Macau, Iceland, New Zealand, Pakistan, Peru, Singapore, Switzerland, Australia, South Korea, and Georgia. China also has an “economic cooperation framework agreement” (ECFA) with Taiwan, which is the equivalent to an FTA. The combined GDP on a PPP basis of the countries China had an FTA through 2015 totaled $13.8 trillion, the combined population was 1.5 trillion, and total merchandise trade (exports plus imports) with China was $1.5 trillion. In comparison, the United States had FTAs in effect with 20 countries through 2015, which had combined: GDP on a PPP basis of $10.0 trillion, population of 451 million, and total trade at $1.5 trillion, respectively in 2015.

China is currently in the process of negotiating FTAs with the Cooperation Council for the Arab States of the Gulf (which includes Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, and Bahrain), Norway, and the Southern African Customs Union (which includes South Africa, Botswana, Lesotho, Namibia, and Swaziland), Sri Lanka, Israel, Maldives, Japan. China has also sought a trilateral FTA with Japan and South Korea. China has also considered negotiating FTAs with a number of other countries as well, including Canada, Colombia, Moldova, Mongolia, Fiji, Nepal, and Mauritius.

Foreign Investment

China was ranked the world's third largest FDI recipient after United States and the UK. The country's economy was ranked the second most attractive to multinational companies for 2017-2019, after the United States. In 2016, FDI inflows reached USD 133 billion, not far from the historic high of USD 135 billion in 2015. FDI flows from China abroad, valued at USD 183 billion in 2016, outpaced FDI flows into the country. China has a large and rapidly expanding market, which was not overly affected by the financial crisis. With a strong potential, a wealth of employees and potential partners eager to learn and evolve, the country is a base for low cost production. Nevertheless, certain factors can hinder investments, such as China’s lack of transparency, legal uncertainty, low level of protection of intellectual property rights, corruption or protectionist measures which favour local businesses.