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External trade

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International trade makes up a sizeable portion of China's overall economy. China became a member of the World Trade Organization in 2001. ^[1] It also has free trade agreements with several nations, including ASEAN, Australia, Cambodia, New Zealand, Pakistan, South Korea and Switzerland. ^{[2] [3]} As of 2022 ^[update], China's largest trading partners are ASEAN, the European Union, Japan, South Korea, Taiwan, Australia, Russia, Brazil, India, Canada, and the United Kingdom.

During the Cold War, a meaningful segment of China's trade with the Third World was financed through grants, credits, and other forms of assistance. The principal efforts were made in Asia, especially to Indonesia, Myanmar, Pakistan, and Sri Lanka, 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. In November 1991, China joined the Asia-Pacific Economic Cooperation (APEC) group, which promotes free trade and cooperation in the 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.

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 11 December 2001, after 16 years of negotiations, the longest in the history of the General Agreement on Tariffs and Trade. However, U.S. exporters continue to have concerns about fair market access due to China's restrictive trade policies and U.S. export restrictions. In October 2019, Chinese Vice Premier Han Zheng promised to further decrease tariffs and remove non-tariff barriers for global investors, he also welcomed multinational companies to invest more in China. ^[4]

China's global trade exceeded $4.16 trillion at the end of 2013, having broken the hundred-billion mark in 1988 and half a trillion by 2001. China global trade exceeded US$6 Trillion in 2021 ^[6] The table below shows the average annual growth (in nominal US dollar terms) of China's foreign trade during the reform era.

By 2020, China became the largest trading partner of more than 120 countries. ^[7]: 228

^[8]

The vast majority of China's imports consists of industrial supplies and capital goods, notably machinery and high-technology equipment, the majority of which comes from the developed countries, primarily Japan^{[ citation needed]} and the United States^{[ citation needed]}. Regionally, almost half of China's imports come from East and Southeast Asia, and about a fourth of China's exports go to the same destinations^{[ citation needed]}. About 80 percent of China's exports consist of manufactured goods, most of which are textiles and electronic equipment, with agricultural products and chemicals constituting the remainder. Out of the five busiest ports in the world, three are in China. The U.S. trade deficit with China reached $233 billion in 2006, as imports grew 18%. China's share of total U.S. imports has grown from 7% to 15% since 1996.

Trade volume between China and Russia reached $29.1 billion in 2005, an increase of 37.1% compared with 2004. A spokesman for the Ministry of Commerce, Van Jingsun, said that the volume of trade between China and Russia could exceed forty billion dollars in 2007. ^[9] China's export of machinery and electronic goods to Russia grew 70%, which is 24% of China's total export to Russia in the first eleven months of 2005. During the same time, China's export of high-tech products to Russia increased by 58%, and that is 7% of China's total exports to Russia. Also at that time period, border trade between the two countries reached $5.13 billion, growing 35% and accounting for nearly 20% of the total trade. Most of China's exports to Russia remain apparel and footwear. Russia is China's eighth largest trade partner and China is now Russia's fourth largest trade partner, and China now has over 750 investment projects in Russia, involving $1.05 billion. China's contracted investment in Russia totaled $368 million during January–September 2005, twice that in 2004. By 2022, trade between China and Russia reached a record $190 billion, with China becoming Russia's trading partner. ^[10]

Chinese imports from Russia are mainly those of energy sources, such as crude oil, which is mostly transported by rail, and electricity exports from neighboring Siberian and Far Eastern regions. In the near future, exports of both of these commodities are set to increase, as Russia is building the Eastern Siberia-Pacific Ocean oil pipeline with a branch going to the Chinese border, and Russian power grid monopoly UES is building some of its hydropower stations with a view of future exports to China.

Export growth has continued to be a major component supporting China's rapid economic growth. To increase exports, China pursued policies such as fostering the rapid development of foreign-invested factories, which assembled imported components into consumer goods for export and liberalizing trading rights. In its 11th Five-Year Program, adopted in 2005, China placed greater emphasis on developing a consumer demand-driven economy to sustain economic growth and address imbalances.

China is a member of the Regional Comprehensive Economic Partnership (RCEP), the world's largest free-trade area which was signed into agreement in November 2020. The RCEP, which includes China, Japan, South Korea, Australia, New Zealand and the ASEAN nations, represents about a third of the world's population and 29% of global gross domestic product. The RCEP aims to eliminate tariffs on a variety of products within 20 years. ^[11] On 17 September 2021, China formally applied to join another large Asia-Pacific free-trade pact, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). ^[12]

References