This study analyzes what changes have occurred in China’s trade policy since the reform and opening up in the later 1970s and what problems are there in the structure of Chinese foreign trade so as to seek future direction and draw up a plan for it....
This study analyzes what changes have occurred in China’s trade policy since the reform and opening up in the later 1970s and what problems are there in the structure of Chinese foreign trade so as to seek future direction and draw up a plan for it.
China has experienced great changes which had never occurred before. According to the Chinese National Bureau of Statistics, from 1979 to 2006 China’s real GDP grew at an average annual rate of 9.6%, and according to the World Bank, IMF and Asian Development Bank it will be 8.7%, 9.5% and 9.8% after Olympic game in 2008. The development of foreign trade is one of the reasons for that great accomplishment. Looking into why China’s average annual growth rate of GDP had changed so greatly in 1979-2006, we can find out that the open-door policy has played a direct effect in China’s booming economy. While Chinese foreign trade has developed quickly after entering the WTO, there are some problems such as the appearance of a large balance of payments surpluses(current account surplus and capital account surplus), the imbalance between import and export structures, and also the strong dependence on foreign countries. So it’s necessary to investigate the question of how the foreign trade policy and trade structure have changed, which is also one of the reasons for the overheated economy. Especially, if the Chinese government wants to keep sustainable economic development, the foreign trade structure and foreign trade policy should be readjusted. It is obvious that the Chinese foreign trade strategy and policy should be changed, but the question of what kind of theory should be used to establish foreign policy so as to earn profit is very important.
This study focuses on the questions of what paradigm of Chinese foreign policy has been chosen since the reform and opening up, how Chinese trade structure has changed, what problems followed after those trade policies and with those policies what kind of plan could transform from now on Chinese trade structure into more diversified and rationalized one. So this study firstly analyzed Chinese trade policy in 3 periods, the periods before and after China’s reform and opening up and the period after China’s WTO accession, and analyzed what kind of strategy and target does Chinese government employed both economically and politically. Secondly, it studied the changes in foreign trade structure with the paradigm shifts in Chinese trade policy and analyzed the changes in export and import structures by chief items and regional groups. After having investigated the problems in trade policy, this study will try to find how to solve them and seek solutions for the future.
The major results are summarized as follows.
Firstly, it is necessary to strengthen the export competitiveness while carrying out a strategic import policy in a way to result in trade balance equilibrium.
Secondly, Chinese government should keep on pursuing relative trade liberalization and pay attention to maintaining the market order.
Thirdly, for the purpose of diversification in foreign economic relationships, China should take the foreign economic policy as a strategy so as to accomplish the globalization of Chinese economy and building the regional economic cooperation system.
Lastly, the Chinese government should strengthen the mechanism of market regulation and reform the system of foreign trade administration to accomplish a sound development of trade and deal with the challenge from the globalization.