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Summary on China's Foreign Trade

Over the past five decades, China's trade and economic relations with other countries and regions have undergone continuous development. As a result, the country's position in world trade has been greatly elevated, from the 32nd place in 1978 to the 10th in 1997. Since 1979, along with China's efforts in opening up to the outside world, it has actively developed its economic exchanges and cooperation with other countries and regions in line with the principle of equality and mutual benefit. Consequently, a multi-tiered, multi-channel and diversified management system has been established in China's foreign trade and economic relations, which comprises specialized foreign trade firms at various levels and of various kinds, productive enterprises that manage their own import and export, scientific research institutes, commercial and goods supply enterprises and foreign-funded enterprises. A framework of "broadly-based foreign economic relations and trade" has been set up initially. In this system, import and export trade, utilization of foreign capital, overseas investment, contracting of engineering projects overseas, cooperation in labor service and foreign aid mutually promote, and it involves the participation of foreign trade, production, scientific research and financial departments.

China's trading and economic partners spread throughout the world, and their number had increased from a few dozens in 1950 to 228 in 1997. In 1950, China's total foreign trade turnover was only US$1.135 billion, whereas in 1997, it amounted to US$325.1 billion, representing an increase of more than 290 times. The period after 1992 saw the most rapid development in China's foreign trade: from 1992 to 1997, the country's volume of foreign trade totaled US$1493.8 billion, exceeding the accumulated total from 1949 to 1991.

The utilization of foreign capital was the first step China took in its opening-up endeavor, and it has undergone rapid progress over the past 20 years. By the end of 1998, China had approved in total 324712 foreign-funded enterprises, with the contractual foreign capital amounting to US$572.523 billion, of which the amount put into actual use reached US$267.453 billion. At the same time, China also absorbed foreign capital through such forms as investment in securities and loans from foreign governments and financial institutions, and the total amount or foreign capital imported this way has reached US$100 billion. At present, China has become the largest recipient of foreign investment among the developing countries, second only to the United States in the world. The country's efficiency in foreign capital utilization has been continuously improved. This is indicated by the fact that the number of capital-intensive technology-intensive projects has markedly increased, and so have the areas in which foreign investment is encouraged by the Chinese Government, whereas areas in which the utilization of foreign capital is restricted have become increasingly fewer.

And the basic industries and infrastructure projects have turned out to be the hot spots for foreign investment. The appeal held by the country's central and western parts for foreign investment has been enhanced. More and more world famous transnational corporations have come to invest in China. The number of large projects has been increasing and the average scale of foreign investment in single projects has been on a continuous rise.

Foreign contracts of engineering projects and labor service cooperation have undergone great development. At the earlier stage of the reform and opening-up drive, only a few enterprises were engaged in this field. But now, the number of such enterprises has exceeded 700 and they are of a complete range and possess a strong competitive edge on the world market. Their scope of business has been extended more and more into the hi-tech field, and the average scale of cooperative projects has become larger and larger.

China's economic and technical assistance to foreign countries has further expanded. Shortly after the founding of the People's Republic, China began to provide economic and technical assistance to other countries. By the end of 1997, China had, in total, offered assistance to 114 countries, and the number of complete sets of equipment supplied to other countries reached 1531. Marked achievements have been made in multilateral and bilateral trade and economic cooperation. Its bilateral relations with such major trade partners as the United States, Japan and European countries as well as other countries and regions have been continuously consolidated. This has helped the country to enjoy a sound international environment for the development of foreign trade and economic relations.

The continuous and rapid expansion of China's foreign trade and economic relations has enabled the country to rid its national economy of the plight of seclusion and semi-seclusion and gradually shift to an open economy. By 1998, China's open areas had expanded from the coastal areas and special economic zones to border regions, areas along the Yangtze River as well as the provincial capital cities.

The opened-up fields have been extended from processing industries to basic industries and infrastructure facilities and to service and retail trades, finance, insurance and foreign trade. Moreover, since 1992 China has on four occasions lowered its import tariff by a large scale and the average level of import tariff has been reduced from 43.2% in 1992 to 17% in October 1997. In 2000, China's import tariff will be further reduced to the average level of the developing countries.

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