International Trade in China

News Related to International Trade in China

• Website launched to promote Thai fruit in China - Feb 21, 2012

  The Ministry of Agriculture has called on its office in Beijing to launch a new website aimed at the promotion of Thai fruits in China. The website, thethaifruit.com, also aims to inform Thai growers of the Chinese export standard so that they can produce foods suitable for the market. China currently allows.....

  Source: FreshPlaza

• U.S. Influence in China - Feb 21, 2012

  A former political science professor writes about American relations with China.

  Source: The New York Times

• More 3-D, Less Reality in U.S.-China Movie Pact - Feb 21, 2012

  A trade agreement between the United States and China expands the number of movie exports, focusing on 3-D or large-screen Imax format extravaganzas.

  Source: The New York Times

• China's railway ministry applies to issue 150 bln yuan bonds-sources - Feb 21, 2012

  Connect with Reuters About Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach

  Source: Congoo

• Qinghai-Tibet railway brings more visitors to China's plateau city - Feb 21, 2012

  GMT2012-02-20 18:47:55(Beijing Time) Xinhua English XINING, Feb. 20 (Xinhua) -- The plateau city of Golmud in far west Qinghai province has seen a growing number of tourists over the past five years thanks

  Source: Congoo

• China's sugar imports hiked to more than 3m tonnes - Feb 21, 2012

  China is to challenge the European Union and the US for the title of top-ranked importer this season, following weather setbacks, the ISO says

  Source: Agrimoney

• Apples legal woes in China offer hope to rivals - Feb 21, 2012

  Apple Inc’s legal row over its iPad trademark in China creates a window of opportunity for rivals such as Lenovo Group Ltd and Samsung Electronics Co Ltd as they try to chip away at the US firm’s dominance of the potentially vast Chinese tablet market.

  Source: Business Standard

• China shares record biggest jump in 27 months - Feb 21, 2012

  The benchmark Shanghai Composite Index finished at 2,298.4 points, its highest closing level since December 9, 2011.

  Source: The Economic Times

• European markets rise on Greek bailout hopes, China move - Feb 21, 2012

  European stock mkts rose on growing signs that a new bailout for Greece could be finalised while sentiment got a boost by the latest Chinese move to ease credit.

  Source: The Economic Times

• HK, Shanghai shares off early highs after China move - Feb 21, 2012

  The Shanghai Composite Index was up 0.9 percent by midday at 2,378 after opening at 2,388, just shy of its 125-day moving average at 2,390.

  Source: The Economic Times

• CHINA: Wal-Mart ups stake in e-commerce company Yihaodian - Feb 21, 2012

  Wal-Mart Stores has increased its investment in Chinese online retailer Yihaodian to take a controlling stake in the company.

  Source: Just Food

Business outline for China

Main Industry Sectors

China has a highly diversified economy, dominated by the manufacturing and agricultural sectors.

The agricultural sector employs almost 40% of the active population and contributes up to about 10% to the GDP, although only 15% of the Chinese soil (about 1.2 M km ˛) is arable. China is the most populated country in the world and one of the largest producers and consumers of agricultural produce. China is the leading global producer of cereals, rice, cotton, potatoes and tea. In terms of livestock, it also dominates sheep and pork livestock farming and the world's production of fish products.

The mining sector occupies an important place in the Chinese economy, since the country's subsoil is rich in energetic resources. China has significant coal reserves (the country's primary energy source), which account for two-thirds of the total primary energy consumption. It is the world leader in the production of certain ores (phosphate and titanium) and also has significant petrol and natural gas reserves. It is the world's fifth biggest oil producer with 3.8 million barrels a year.

The industry and the construction sectors contribute approximately half of China's GDP. China has become one of the preferred destinations for the relocation of global manufacturing units because of a cheap labor market, even though the cost of labor has been increasing. China's economic development has coincided primarily with the development of a competitive and outward-oriented manufacturing sector. More than half of the Chinese exports are made by companies with foreign capital. Their share in the sector's added-value varies according to the sector: more than 60% for electronics and less than 20% for the majority of producer goods. The Government sector still contributes approximately 40% to the GDP.

The services sector has not progressed, encumbered by public monopolies and restrictive regulations. The tertiary sector's share has remained at nearly a third of the GDP in the last 15 years.

Economic Overview

The global recession interrupted China's dynamic of continuous growth. Chinese economy however showed itself very resilient to the crisis and its economic recovery surprised the observers by both its rapidity and its vigor. After the euphoria of the recovery, the GDP growth slowed down during the first two quarters of 2010, especially as an effect of the austerity measures adopted by the government in the field of bank lending, real estate and currency exchange. Since then, there has nonetheless been a resumption of more dynamic growth which should continue in 2011. For 2010, economic growth is estimated at 10.5%.

Chinese economy is driven by investment and domestic consumption, which is itself boosted by the increase in salaries and the new housing policy. In order to avoid the overheating of the economy, the government has announced new measures to fight inflation and to stabilize prices of basic agricultural commodities. Among Beijing's priorities are also: infrastructure, industry modernization, opening the country to new technologies, healthcare, education and support for the countryside.

A large gap remains between the living standard of the cities and the countryside, between urban zones on the Chinese coast and the interior and western parts of the country, as well as between the urban middle classes and those who have not been able to profit from the growth. These inequalities are becoming increasingly worrisome for both the Chinese authorities and the investors. Although poverty has largely decreased in China, almost 10% of the population, i.e. more than 120 million people, continue to live on less than 1 USD a day.

FDI in Figures

The absorption of FDI flow is part of China's opening up to the outside world. After reaching a peak in 2008 and subsequently falling under the effects of the global economic crisis, FDI flows have recovered and the trend should continue in the future.
China is an unexploited market and a potential for considerable growth due to several reasons:
- It's the biggest internal market in the world with 1.3 billion potential customers;
- it's a rapidly growing market (minimum 8% growth per year); and
- the labor costs are low even if this situation is changing in certain areas;
- with the development of the Western provinces, China offers new opportunities, particularly in the Sichuan province.

Nevertheless, certain factors can hinder investments, such as China's lack of transparence, legal uncertainty, low level of protection of intellectual property rights, corruption or protectionist measures which privilege local businesses.

FDI Government Measures

In the foreign investment guide published by the State Commission for Development and Reform in November 2007, the Chinese government made it known that investments in sectors or Chinese companies that already have "a relatively strong production capacity with advanced technologies 'will not be encouraged', while investments in high technology, production of equipment and new materials, and in the services sectors, as well as in the recycling economy, clean production, use of renewable energies and environmental protection, will be welcomed as they are sectors in which China needs foreign companies.

Country Strong Points

China has a rapidly expanding market, which was not overly affected by the 2008-2009 financial crisis. With a strong potential, a wealth of employees and potential partners eager to learn and evolve, the country is a base for low cost production.

Country Weak Points

A changing legal context, administrative complexity, the difficulty for foreigners to learn the way of conducting business, both culturally and in practice, a poor middle management level and a very high staff turnover are factors which are often crippling in market acquisition.

Foreign Trade Overview

Trade represents almost a half of the Chinese GDP. After having achieved a record trade surplus in 2006, China has become the world's primary exporter and ranks second among world's largest importers. Chinese exports were increasing until a decrease due to the international financial crisis. For the first time in six years, China experienced a large trade deficit in March 2010, imports soaring due to a strong domestic demand, while exports were lagging behind due to the slowness of the global economic recovery. This phenomenon proved to be only temporary, the country again achieving a surplus the following month. This trend should continue in mid-term.
China's main trade partners are the countries of South East Asia, the United States and the European Union.