China
is the single most imperative challenge for EU trade policy. China has
re-emerged as the world's second largest economy and the biggest exporter in
the global wealth, but also an increasingly important political power. EU-China
trade has augmented dramatically in recent years. China
is now the EU's 2nd trading partner behind the USA and the EU's chief source of
imports by far. The EU is also China's
biggest trading partner.
The EU's open market has been a large contributor to China's export-led
growth. The EU has also benefited from the development of the Chinese market
and the EU is committed to open trading relations with China. However
the EU wants to make certain that China trades fairly, respects
intellectual assets rights and meet its WTO obligations.
Agricultural products were distributed in three major ways in China during
the 1980s. They were either retained by the household (now the primary
production unit) for allocation among its members, procured by the state, or
sold in rural or urban free markets.
Approximately 63 percent of the populace was located in rural areas, where
the majority of the people worked in agriculture and rural industries. Under
the accountability system for agriculture instituted in 1981, the household
replaced the production team as the basic production unit. Families contracted
with the fiscal collective to farm a plot of land, delivered a set amount of
grain or other produce and the farming tax to the state, and paid a fee to the
collective. After meeting these obligations, the household was free to retain
its surplus produce or sell it in free markets. Restrictions on private plots
and household sideline production were lifted, and much of the making from
these was also sold on free markets.
Once food was procured and transported to town areas, it was sold to
consumers by state-owned stores and restaurants. In the mid-1980s food items
were also accessible in free markets, where peasants sold their produce, and in
privately owned restaurants. As noted previously, the prices of pigs, aquatic
products, and vegetables were resolute by local authorities according to
quality and demand; prices of other products floated freely on the market.
Except for grain, edible oil, and a few other rationed items, food items were
in good supply.
Industrial goods used in agricultural making were sold to agricultural units
in the 1980s. Local cooperatives or state supply and marketing bureaus sold
most farming producer goods, including chemical fertilizers and insecticides,
to households at set prices. The state also offered preferential prices for
agricultural inputs to grain farmers to encourage grain production. Households
were permitted to purchase agricultural machines and vehicles to transport
goods to market. In order to ensure that rural units could cover the costs of
the increasing quantities of engineering inputs required for higher yields, the
government periodically reduced the prices of the industrial goods sold to
farmers, while raising the procurement prices for agricultural products. In the
mid-1980s, however, the price gap between agricultural and industrial products
was widening to the weakness of farmers.
Distribution of food and other agricultural goods to town consumers,
industry, and rural areas deficient in food was carried out primarily by the
state and secondarily by producers or cooperatives. The state procured
agricultural goods by means of taxes in kind and by purchases by state
commercial departments (state trading companies) under the Ministry of
Commerce. The agricultural tax was not large, falling from 12 percent of the
total value of agricultural output in 1952 to 5 percent in 1979. In 1984 the
number of agricultural and sideline foodstuffs subject to state planning and
purchasing quotas was reduced from twenty-nine to ten and included cereal
grains, edible oil, cured tobacco, jute, hemp, and pigs. In 1985 the system of
state purchasing quotas for agricultural products was abolished. Instead, the
state purchased grain and cotton under bond at a set price. Once contracted
quotas were met, the grain and cotton were sold on the market at floating
prices. If market prices fell below the listed state price, the state purchased
all available market grain at the state price to protect the welfare of
producers. Vegetables, pigs, and aquatic products sold to urban, mining, and
industrial areas were traded in local markets according to demand. Local
commercial departments set the prices of these goods according to quality to
protect the interests of urban patrons. All other agricultural goods were sold
on the market to the state, to cooperatives, or to other producers.
Restrictions on private business activities were greatly reduced, permitting
peasants as well as cooperatives to transport agricultural goods to rural and town
markets and allowing a rapid expansion of free markets in the countryside and
in cities. The number of wholesale produce markets increased by 450 percent
between 1983 and 1986, reaching a total of 1,100 and easing pressure on the
state produce distribution network, which had been strained by the burgeoning
agricultural production engendered by pastoral reforms. In 1986 free markets,
called "commodity fairs," numbered 61,000 nationwide.
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| Trade in china |
After 1982, reforms moved China's
market to a mixed system based on mandatory planning, guidance planning (use of
economic levers such as taxes, prices, and credit instead of administrative
fiat), and the free market. In late 1984 further reforms of the urban
industrial economy and commerce reduced the scope of mandatory development,
increased enterprise autonomy and the authority of professional managers,
loosened price controls to rationalize prices, and cut subsidies to
enterprises. These changes created a "socialist planned commodity
economy," essentially a dual economy in which planned allocation and
distribution are supplemented by market exchanges based on on the edge or free
prices.
As a result of these reforms, the distribution of goods used in trade
production was based on mandatory planning with fixed prices, guidance planning
with hovering prices, and the free market. Mandatory planning covered sixty
industrial products, including coal, crude oil, rolled steel, nonferrous
metals, timber, cement, electricity, basic trade chemicals, chemical
fertilizers, major machines and electrical equipment, chemical fibers,
newsprint, cigarettes, and defense industry products. Once enterprises under compulsory
planning had met the state's mandatory plans and supply contracts, they could
sell surplus production to commercial departments or other enterprises. Prices
of surplus business producer goods floated within restrictions set by the
state. The state also had a planned distribution system for imperative
materials such as coal, iron and steel, timber, and cement. Enterprise managers who chose to exceed
planned production goals purchased additional materials on the market. Major
cities well-known wholesale markets for industrial producer goods to supplement
the state's allocation organization.
Under guidance planning, enterprises try to meet the state's planned goals
but make their own arrangements for production and sales based on the
orientation of the state's plans, the availability of raw and unfinished
materials and energy supplies, and the demands on the market. Prices of
products under guidance planning either are unified prices or floating prices
set by the state or prices negotiated between buyers and suppliers. Production
and distribution of products not included in the state's plans are in time by
market conditions.
Retail sales in China
changed dramatically in the late 1970s and early 1980s as economic reforms
increased the supply of food items and consumer goods, allowed state retail
stores the freedom to purchase goods on their own, and permitted individuals
and collectives greater freedom to engage in retail, service, and catering
trades in rural and urban areas. Retail sales increased 300 percent from 1977
to 1985, rising at an average yearly rate of 13.9 percent — 10.5 percent when
adjusted for rise. In the 1980s retail sales to rural areas increased at an
annual rate of 15.6 percent, outpacing the 9.7 percent increase in retail sales
to urban areas and reflecting the more rapid rise in rural incomes. In 1977
sales to rural areas comprised 52 percent of total retail sales; in 1984 rural
sales accounted for 59.2 percent of the total. Consumer goods comprised
approximately 88 percent of retail sales in 1985, the remaining 12 percent
consisting of farming materials and equipment.
The number of retail sales enterprises also expanded rapidly in the 1980s.
In 1985 there were 10.7 million retail, catering, and service establishments, a
rise of 850 percent over 1976. Most remarkable in the expansion of retail sales
was the rapid rise of collective and individually owned retail establishments.
Individuals engaged in businesses numbered 12.2 million in 1985, more than 40
times the 1976 figure. Furthermore, as state-owned businesses either were
leased or turned over to collective rights or were leased to individuals, the
share of state-owned commerce in total retail sales dropped from 90.3 percent
in 1976 to 40.5 percent in 1985.
In 1987 most urban retail and service establishments, including state,
collective, and private businesses or vendors, were located either in major
downtown commercial districts or in small neighborhood shopping areas. The region
shopping areas were numerous and were situated so that at least one was within
easy walking distance of almost every household. They were able to supply
nearly all the daily needs of their customers. A typical neighborhood shopping
area in Beijing would contain a one-story department store, bookstore, hardware
store, bicycle repair shop, combined tea shop and bakery, restaurant, theater,
laundry, bank, post office, barbershop, photography studio, and electrical
appliance repair shop. The division stores had small pharmacies and carried a
substantial range of housewares, appliances, bicycles, toys, sporting goods,
fabrics, and clothing. Major shopping districts in big cities contained larger
versions of the neighborhood stores as well as numerous specialty shops,
selling such items as musical instruments, sporting goods, hats, stationery,
handicrafts, cameras, and clocks.
Supplementing these retail establishments were free markets in which private
and collective businesses provided services, hawked wares, or sold food and
drinks. Peasants from surrounding rural areas marketed their spare produce or
sideline production in these markets. In the 1980s urban areas also saw a
revival of "night markets," free markets that operated in the evening
and offered extended service hours that more formal establishments could not
match.
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| Trade in china |
In rural areas, supply and promotion cooperatives operated general stores
and small shopping complexes near village and township administrative
headquarters. These businesses were supplemented by collective and entity
businesses and by the free markets that appeared across the countryside in the
1980s as a result of rural reforms. Generally speaking, a smaller variety of
consumer goods was available in the countryside than in the cities. But the
lack was partially offset by the increased access of some peasants to urban
areas where they could purchase consumer goods and market farming items.
A number of important consumer goods, including grain, cotton cloth, meat,
eggs, edible oil, sugar, and bicycles, were rationed during the 1960s and
1970s. To purchase these items, workers had to use coupons they received from
their work units. By the mid-1980s rationing of over seventy items had been
eliminated; production of buyer goods had increased, and most items were in
good supply. Grain, edible oil, and a few other items still required coupons.
In 1985 pork rationing was reinstated in twenty-one cities as supplies ran low.
Pork was available at higher prices in supermarkets and free markets.
he pragmatic modernization drive led by party leaders Zhou Enlai and Deng
Xiaoping and China's
growing contacts with Western nations resulted in a sharp acceleration of trade
in the early 1970s. Imports of modern plants and equipment were mainly
emphasized, and after 1973 oil became an increasingly important export. Trade
more than doubled between 1970 and 1975, reaching US$13.9 billion. Growth in
this period was about 9 percent a year. As a proportion of GNP, trade grew from
1.7 percent in 1970 to 3.9 percent in 1975. In 1976 the feeling of uncertainty
resulting from the death of Mao Zedong and pressure from the Gang of Four,
whose members opposed reliance on foreign technology, brought another decline
in trade.
Beginning in the late 1970s, China
reversed the Maoist monetary development strategy and, by the early 1980s, had
committed itself to a policy of being more open to the outside world and
widening foreign economic relations and trade. The opening up policy led to the
reorganization and decentralization of foreign trade institutions, the adoption
of a legal framework to facilitate foreign economic relations and trade, direct
foreign investment, the creation of special economic zones, the rapid expansion
of foreign trade, the importation of foreign technology and management methods,
taking part in international financial markets, and participation in
international foreign economic organizations. These changes not only benefited
the Chinese economy but also integrated China into the world economy. In
1979 Chinese trade totaled US$27.7 billion - 6 percent of China's GNP but
only 0.7 percent of total world trade. In 1985 Chinese strange trade rose to
US$70.8 billion, representing 20 percent of China's
GNP and 2 percent of total world trade and putting China sixteenth in world trade
rankings.
he EU-China High Level Economic and Trade Dialogue was launched in Beijing in April 2008.
The HED strengthens
the dialogue between the European Commission and the State Council of China, at
Vice-Premier level. It deals with issues of strategic importance to EU-China
trade and economic relations and provides impetus to progress concretely in
sectoral dialogues. This dialogue provides a tool to address issues of mutual
concern in the areas of investment, market access and intellectual property
rights protection, as well as other issues related to trade. The third meeting
of the HED was held
in Beijing on
20-21 December 2010.
The EU was a strong supporter of China's
accession to the WTO, arguing that a WTO without China was not truly universal in
scope. For China,
formal succession to the WTO in December 2001 symbolised an important step of its
integration into the universal economic order. The commitments made by China in the context of accession to the WTO
secured improved access for EU firms to China's market. Import tariffs and
other non-tariff barriers were sharply and permanently reduced. However, while China has made
good progress in implementing its WTO commitments, there are still outstanding
problems. China's
compliance with the commitments it undertook when joining the WTO were
periodically reviewed in a process called the Transitional Review Mechanism.
This process ended 10 years after accession, in December 2011. The EU also uses
the regular bi-annual Trade Policy Review of China in the WTO to raise a number
of concerns regarding China's
trade policy. These include inadequate protection of academic property rights,
the maintenance of industrial policies and non-tariff measures which may
discriminate against foreign companies and barriers to market access in a
number of services sectors including construction, banking, insurance, telecommunications,
and postal services). Export restrictions on raw materials have also been
identified as a major trade obstacle.
In 2006 the European Commission adopted a major policy strategy (Partnership
and Competition) on China
that pledged the EU to accepting tough Chinese competition while pushing China to trade
fairly. Part of this strategy is the ongoing conference on a comprehensive
Partnership and Cooperation Agreement (PCA)
that started in January 2007. These discussions aim to further improve the
framework for bilateral trade and outlay relations and also include the
upgrading of the 1985 EC-China Trade and Economic Cooperation Agreement.
However, positions remain far apart on many important chapters, and the
European payment has called upon China to make obvious more
ambition.
China reported
a buy and sell surplus equivalent to 31.7 Billion USD in June of 2012.
Historically, from 1986 until 2012, China Balance of Trade averaged 6.0300
Billion USD reaching an all time high of 40.0900 Billion USD in November of
2008 and a record low of -66.0000 Billion USD in December of 1989. Export
growth has continued to be a major component supporting China's rapid
economic growth. Exports of goods and services constitute 39.7% of GDP. China
major exports are: office machines & data processing equipment,
telecommunications equipment, electrical machinery and apparel & clothing.
China imports mainly commodities: iron and steel, oil and mineral fuels;
machinery and equipment, plastics, optical and medical equipment and organic
chemicals. Its main trading partners are: European Union, The United States, Japan,
Hong Kong and South Korea.
This page includes a chart with historical data for China Balance of Trade.
Retail sales in China
changed dramatically in the late 1970s and early 1980s as economic reforms
increased the supply of food items and consumer goods, allowed state retail
stores the freedom to purchase goods on their own, and permitted individuals
and collectives greater freedom to engage in retail, service, and catering
trades in rural and urban areas. Retail sales increased 300 percent from 1977
to 1985, rising at an average yearly rate of 13.9 percent — 10.5 percent when
adjusted for inflation. In the 1980s retail sales to rural areas increased at
an annual rate of 15.6 percent, outpacing the 9.7 percent increase in retail
sales to urban areas and reflecting the more rapid rise in rural incomes. In
1977 sales to rural areas comprised 52 percent of total retail sales; in 1984
rural sales accounted for 59.2 percent of the total. Consumer goods comprised
approximately 88 percent of retail sales in 1985, the remaining 12 percent
consisting of farming materials and equipment.
The number of retail sales enterprises also expanded rapidly in the 1980s.
In 1985 there were 10.7 million retail, catering, and service establishments, a
rise of 850 percent over 1976. Most remarkable in the expansion of retail sales
was the rapid rise of collective and individually owned retail establishments.
Individuals engaged in businesses numbered 12.2 million in 1985, more than 40
times the 1976 figure. Furthermore, as state-owned businesses either were
leased or turned over to collective ownership or were leased to individuals,
the share of state-owned commerce in total retail sales dropped from 90.3
percent in 1976 to 40.5 percent in 1985.
In 1987 most urban retail and service establishments, including state,
collective, and private businesses or vendors, were located either in major
downtown commercial districts or in small neighborhood shopping areas. The
neighborhood shopping areas were numerous and were situated so that at least
one was within easy walking distance of almost every household. They were able
to supply nearly all the daily needs of their customers. A typical neighborhood
shopping area in Beijing would contain a one-story department store, bookstore,
hardware store, bicycle repair shop, combined tea shop and bakery, restaurant,
theater, laundry, bank, post office, barbershop, photography studio, and
electrical appliance repair shop. The department stores had small pharmacies
and carried a substantial range of housewares, appliances, bicycles, toys,
sporting goods, fabrics, and clothing. Major shopping districts in big cities
contained larger versions of the neighborhood stores as well as numerous
specialty shops, selling such items as musical instruments, sporting goods,
hats, stationery, handicrafts, cameras, and clocks.
Supplementing these retail establishments were free markets in which private
and collective businesses provided services, hawked wares, or sold food and
drinks. Peasants from surrounding rural areas marketed their surplus produce or
sideline production in these markets. In the 1980s urban areas also saw a
revival of "night markets," free markets that operated in the evening
and offered extended service hours that more formal establishments could not
match.
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| Trade in china |
