Foreign Trade

Opening to the outside world has greatly promoted the development of China’s foreign trade. China’s import and export volume increased from 1.13 billion US dollars-worth in 1950 to 360.65 billion US dollars-worth in 1999, or an increase of 319 times. The total import and export volume in 1999 increased by 17.5 times, as compared with that in 1978. In terms of foreign trade, China ranked 32nd in the world in 1978, and rose to ninth in 1999

Over the past 21 years, great changes have taken place in China’s import and export trade. First, the structure of import and export commodities has been constantly improved. The export volume of primary products, with food, agricultural and sideline products, and crude oil as the mainstay, has been reduced by a large margin—from 53.5 percent of the total export volume in 1978 to 10.2 percent in 1999; and the proportion of industrial products increased from 46.5 percent in 1978 to 89.8 percent in 1999. Remarkable progress has been achieved in the export of machinery and electrical products, rising from 1.41 billion US dollars-worth in 1980 to 77 billion US dollars-worth in 1999. Second, foreign-invested enterprises, which grew from nothing, have become new factors contributing to the growth of China’s foreign trade. In 1981, the export volume of foreign-invested enterprises made up 0.1 percent of China’s total export volume, and 0.5 percent of the import volume. By 1999, the export volume of foreign-invested enterprises made up 45.5 percent of China’s total, and the import volume, 51.8 percent. Third, China’s international trade market is becoming more diversified. In 1980, nearly 180 countries and regions had trade exchanges with China, a figure which rose to 228 in 1999. In 1999, along with the recovery of the Asian economy, China’s exports to other Asian countries restored growth, and its exports to North America, Europe, Oceanic and Africa constantly grew. Fourth, foreign trade has been expanded through various flexible trading forms. Processing trade and small-scale border trade have increased by a large margin. A situation in which ordinary trade, processing and assembling with supplied or imported materials, and small-scale border trade are competing with each other for development has been formed.

In 1986 China formally applied for reinstatement as a signatory state in the General Agreement on Tariffs and Trade (GATT), so as to make its foreign trade conform more to international practice. Since the World Trade Organization (WTO) was founded in 1995, China continually applied to participate in it. During this period, China lowered its import tariff rates on several occasions and realized the convertibility of RMB in regular items. Over the past 14 years, China’s enthusiasm for acceding to the WTO has never flagged and it has put its commitments into practice. That is to say, with its status as a developing country as the premise and the Uruguay round of negotiations as the basis, China undertakes its obligations suitable to its economic development level, actively strengthens negotiations with the United States, European Union and other member states. Bilateral and multilateral negotiations for China’s entry into the WTO have reached the final stage. The day for China to join the WTO is not far away. Meanwhile, China actively participates in the activities sponsored by the Asian-Pacific Economic Cooperation Organization, and plays an important role in the organization. The bilateral trade relations between China and the United States, the European Union, Russia and Japan have been constantly strengthened.