The Importance of International Trade to China
China has been developing for decades since wars ended. But what is the boom of China based on? One of the significant factor is the success of international trade. Without international trade, the take-of of economy in that poor China may delay for over several tens of years.
Since the 1980s, with the integration of China's economy into the world economy, foreign trade has grown rapidly. With the growth of foreign trade, China's dependence on foreign trade has been increasing. China's dependence on foreign trade has gone through three stages. The first stage was from 1985 to 1990. With the gradual expansion of China's opening to the outside world, its exports grew slowly. In 1985, China's dependence on foreign trade was 23.1%, of which export dependence was 9.02% and import dependence was 14.08%. In 1990, China's dependence on foreign trade reached 30% for the first time, among which export dependence was 16.05% and import dependence was 13.84%. At this stage, due to the shortage of domestic resources and the import of a large number of technical equipment, the import dependence was higher than the export dependence for many years.
The second stage was from 1990 to 2000. During this period, China adopted a series of macro-economic control measures, and the annual growth rate of export reached 12.4%, which exceeded the 8.8% annual growth rate of China's GDP. The rise of labor-intensive industries and the development of processing trade led to the rapid growth of exports. The export dependence exceeded the import dependence and promoted the steady increase of foreign trade. China's foreign trade dependence also exceeded 40% in 1994. Although China's dependence on foreign trade dropped in four years from 1996 to 1999, it hovered around 35% and reached 43.9% again in 2000.
The third phase has been in place since 2001. With China's accession to the WTO, economic globalization further deepening, the role of foreign trade on economic growth, China’s import and export trade volume in 2004 historically breakthrough trillion-dollar mark, more than Japan, ranked third in the world, and foreign trade growth, much higher than China's gross domestic product (GDP) growth and the growth of world trade China's foreign trade dependence increases quickly, above 50% in 2002. In 2005, it has been as high as 63%, but also reached a peak of 67% in 2006, since the economic transformation in our country, both inside and outside to structure adjustment and the influence of the international financial crisis, foreign trade dependence gradually since 2007, to 60.2% in 2008, to 2011 is as low as 50.1% last year, only 0.1% higher than in 2002. According to the analysis of relevant scholars, China has joined the ranks of countries with medium trade dependence, that is, the trade dependence is concentrated between 30% and 100%, such as France, Italy, Britain, South Korea, Germany and so on.
In conclusion, international trade plays an increasingly important role in China’s development. Unluckily, the trade war between China and the United States has broke out, which do damaged the trade between two countries and has a great impact on our economy. But the best out of worst is that we are much stronger and we are not relying on the United States so much now. International trade is not just about two countries but the whole world, and we still have trading partners, so it may not be a severe issue, at least for now. But if we do not pay more attention on it, we will just miss plenty of chances and fall behind the world, becoming a loser and we will be dominated by America in economy again.
1. Bai Du