Recent Trends in China’s Trade

Who would have thought thirty years ago China could become one of the world’s most influential trading nations? At that time the Chinese government was reluctant to open up its door for foreigners and the country was barely self-sufficient in providing clothing and food for its own citizens. Today, we often see “made in China” in our daily life and read news features on China’s expanding influence on world trade. China’s recent rapid economic development and trade record are capturing great attention at home and abroad. According to the World Trade Organisation, China was the fourth-largest merchandise trader in 2002, if the European Union was counted as a single unit.1 A series of successful economic reforms has invigorated China and made it dynamic and unlocked its potential. The economy has grown at a phenomenal pace, averaging an annual growth rate of 9% over the last two decades. China has also grown to become a key player on the international trade platform. With relatively low-cost labour, a strong desire to enter global markets and better foreign access to Chinese markets, China’s trade is contributing to its overall economic growth. In 2004, China’s imports and exports in goods and services equated to three quarters of its GDP. People are interested to know how much China has been exporting and importing, what is the composition of its trade, whom is it trading with and to what extent. The purpose of this brief report is to familiarise readers with these matters by depicting recent trends in China’s trade, with a focus on merchandise trade in particular. The report is organised as follows. Section 2 has the recent trends in China’s commodity trade and its composition, followed by Section 3 on service trade. Section 4 describes the direction of trade in terms of export destinations and ranking of “who’s who” in China’s top trading partner list. Finally, Section 5 provides a summary and conclusion. All the data are in current US dollars.