China's Foreign Trade

The US-China Business Council

May 2000

China's Foreign Trade

China's trade performance in 2000 promises to be as strong as last year's. PRC export performance exceeded expectations in 1999 with the help of government policy incentives, recovering demand in Asia, and robust demand in the United States.

THE YEAR IN REVIEW

Exports rebound, imports surge Export tax rebate hikes, an expansion of export financing, recovering demand among Asian trade partners, and a strong US economy boosted exports 6.1 percent in 1999, a marked improvement over the flat growth in 1998 (see Tables 1-3). While anti-smuggling efforts helped raise recorded imports in 1999, much of the 18.2-percent increase in PRC imports stems from PRC government policies aimed at industrial upgrading. With imports surging ahead of exports, China's trade surplus in 1999 was down 29.2 percent for the year.

FIEs hold edge over SOEs A 23.7 percent increase in imports helped boost SOE total trade, but foreign-invested enterprises (FIEs) retained their position as the top contributor to China's total trade in 1999. Much of the export rebound can be attributed to FIE exports, which were up 9.5 percent.

Top trading partners The rank of China's top trade partners remained relatively unchanged in 1999 (see Table 4). The United States absorbed more than one-fifth of China's direct exports. China's surplus with the United States accounted for just under 77 percent of China's total trade surplus, according to PRC statistics. Because much of China's foreign trade is concentrated among a handful of economies, China signed dozens of trade agreements in 1999 with countries in Latin America and Africa to dilute its dependence and to skirt quotas on PRC exports.

Bilateral trade grows As in 1998, US imports continued to advance ahead of US exports, generating another record bilateral trade deficit, up 20.7 percent year-on-year (see Understanding the US-China Balance of Trade paper). Declines in aircraft and power generation equipment shipments masked the respectable 7.2 percent average growth in the remaining top categories (see Table 6). Among top US imports from China, furniture and power generation equipment recorded the largest growth rates (see Table 7).

THE YEAR AHEAD

Provided the US economy remains strong, the economic recovery in Asia does not falter, and European protectionism is held at bay, PRC 2000 trade figures should be healthy. China predicts a 7.7 percent rise in exports and a 14.6 percent jump in imports. Foreign companies' trade opportunities with China will rise as tariff and non-tariff barriers are phased out with China's accession to the World Trade Organization (WTO). Until China's trade barriers are phased out, foreign companies will find export opportunities in sectors that Beijing targets with specific incentives. Barometers for gauging additional export opportunities in 2000 include scheduled tariff reductions; PRC investment priorities, particularly China's focus on high technology; bilateral trade deals; Chinese overseas investment; and e-commerce developments.

 May 9, 2000
Table 1: China's Trade with the World ($ billion)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000^
Exports 62.1 71.9 84.9 91.7 121.0 148.8 151.1 182.7 183.8 194.9 210.0
Imports 53.3 63.8 80.6 104.0 115.6 132.1 138.8 142.4 140.2 165.7 190.0
Total 115.4 135.7 165.5 195.7 236.6 280.9 289.9 325.1 324.0 360.6 400.0
^ Forecast, Li Jiang, Chinese Academy of International Trade and Economic Cooperation
SOURCE: PRC General Administration of Customs, China's Customs Statistics

Table 2: China's Top Exports ($ million) Table 3: China's Top Imports ($ million)
HTS # Commodity 1999 % change HTS # Commodity 1999 % change
85 Electrical machinery & equipment 32,946.5 22.2 85 Electrical machinery & equipment 35,249.6 33.7
61, 62 Apparel 27,327.0 0.8 84 Power generation equipment 27,833.0 13.1
84 Power generation equipment 19,135.6 14.8 39 Plastics & articles thereof 11,610.3 11.0
64 Footwear & parts thereof 8,672.7 3.4 27 Mineral fuel & oil 8,930.1 31.5
95 Toys & games 7,703.5 -0.7 72, 73 Iron & steel 8,754.0 14.0
72, 73 Iron & steel 6,392.0 -2.7 28, 29 Inorganic & organic chemicals 6,522.5 46.9
28, 29 Inorganic & organic chemicals 5,901.0 2.8 54, 55 Man-made filaments & staple fibers 5,707.7 -7.8
94 Furniture 5,403.3 25.1 90 Medical equipment 5,012.4 26.0
42 Leather & travel goods 5,237.3 -0.5 48 Paper, paperboard & articles thereof 3,982.5 10.5
39 Plastics & articles thereof 5,123.5 -0.7 88 Aircraft & parts thereof 3,177.3 0.1
SOURCE: PRC General Administration of Customs, China's Customs Statistics

Table 4: China's Top Trade Partners (Total Trade, $ million)
Country 1999 % change % of Total PRC Trade Rank 1998
1 Japan 66,167.3 14.2 18.3 1
2 United States 61,425.7 9.2 17.0 2
3 Hong Kong 43,783.0 -3.6 12.1 3
4 South Korea 25,035.6 17.7 6.9 4
5 Taiwan 23,478.6 14.5 6.5 5
6 Germany 16,114.2 12.1 4.5 6
7 Singapore 8,563.3 4.7 2.4 7
8 United Kingdom 7,874.1 19.6 2.2 8
9 France 6,705.5 11.2 1.9 11
10 Netherlands 6,422.9 7.1 1.8 9
SOURCE: PRC General Administration of Customs, China's Customs Statistics

Table 5: China's Trade with the United States ($ billion)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
US Exports 4.8 6.2 7.5 8.8 9.3 11.8 12.0 12.8 14.3 13.1
US Imports 15.2 19.0 25.7 31.5 38.8 45.6 51.5 62.5 71.2 81.8
Total 20.0 25.2 33.2 40.3 48.1 57.4 63.5 75.3 85.4 94.9
SOURCE: US Department of Commerce

Table 6: Top US Exports to China ($ million) Table 7: US Imports from China ($ million)
HTS # Commodity 1999 % change HTS # Commodity 1999 % change
84 Power generation equipment 2,571.7 -5.4 85 Electrical machinery & equipment 15,051.9 17.9
88 Air & spacecraft 2,317.1 -35.4 95 Toys & games 11,079.7 5.0
85 Electrical machinery & equipment 1,985.4 13.2 84 Power generation equipment 10,174.0 33.6
31 Fertilizer 931.7 -12.4 64 Footwear & parts thereof 8,434.1 5.3
90 Medical equipment 792.0 16.5 61, 62 Apparel 5,774.8 1.8
39 Plastics and articles thereof 522.5 20.9 94 Furniture 5,548.0 40.6
12 Oilseeds 370.6 22.0 42 Leather & travel goods 3,006.5 2.8
48 Paper & paperboard 346.8 3.3 39 Plastics and articles thereof 2,471.2 18.4
29 Organic chemicals 318.9 43.0 90 Medical instruments 2,302.4 3.4
87 Vehicles and parts thereof 213.2 43.3 72, 73 Iron & steel 1,607.3 17.1
SOURCE: US International Trade Commission, US Department of Commerce, and US Bureau of the Census

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Last Updated: 10-May-00