After attaining freedom in 1949 china followed the principles of independence and self reliance and then later started economic and trade exchanges with foreign countries. Initially foreign trade development was relatively slow because of international politics.
Before 1978 china’s trade was conducted under system of state trading where approximately a dozen foreign trade corporations monopolised all foreign trade. under this central plan regime imports were not encouraged much and also exports were allowed only to pay for the imports. its share of world trade has risen three times and its expected that will get tripled by 2020.
But since the last 20 years china has witnessed a drastic ...view middle of the document...
According to figures, China’s foreign trade posted a 45, 2% year-on-year growth in February 2010. Exports stood at $94.52 billion, up 45, 7%, showing the rebound in global demand, while imports also rose 44.7% percent to $86, 91 billion. The European Union and United States remaining China’s two largest trade partners as trade with EU rose to $65,53 billion, 34,5% up, while with the US, trade grew 25.1% to $49,32 billion .
In 99 china’s total trade was around $353 billion in which surplus was around 36$ billion, its major trading partners are Japan, U.S., Singapore, Hong Kong. In around 2000 it formed a bilateral trade agreement with US, EU and other trading partners.
In order to boost exports china started to assembling the items imported from outside and exported them back.
US has signed an act with china showing its permanent relations with it.after 2001 it has been accepted as a full member of WTO, many tariffs came to an end but many still believes that its currency is undervalued.
China’s major promotion policy since a decade is to maintain the balance of trade account. some of the industrial policies were multi tier exchange rates, subsidies, tarrifs, various non tarrif barriers, to encourage exports, to protect domestic markets and maintain foreign exchange balance.
One of the very important trade promotion policy is the policy of tax rebates for export items. Adopted in 85. Since 96 it was 3% on the value of purchased input of export products. After the crises it raised from 6 to 17%. It has significant stimulating effects on exports but perfect legal in WTO.
China's international competitiveness in services trade has been enhanced. With its WTO entry, China's trade in services entered a new stage of development. With its scale rapidly enlarged and its pattern gradually optimized, China's trade in services now ranks among the top in the world. China's trade in tourism, transport and other fields has maintained a steady growth momentum. China's cross-border services in construction, communications, insurance, finance, computers and information, royalties and license fees, consultation and related fields, as well as service outsourcing, have been growing rapidly. From 2001 to 2010 China's total services trade value (excluding government services)
The reasons for china’s trade surplus is Chinese household’s high propensity to savings.
China’s tarrif rate is very low and after entry in WTO it went down further.
China has opened wider to the outside world, attracted and utilized foreign investment, developed advanced technology, transformed domestic industries, and achieved rapid development in foreign trade.
witnessed a more-than-five-fold growth from 71.9 billion U.S. dollars to 362.4 billion U.S. dollars
The rapid growth of processing trade has brought into play China's comparative advantage of an abundant labor force, and accelerated the country's industrialization and urbanization. Foreign trade has directly...