Transcript China`s Trade Patterns and Policies

China’s Business Relations with
Australia and Pakistan
Prof. Andrew (Guo-An) Wang 王国安
Department of International Trade
Zhejiang Gongshang University, China
http://econet.zjgsu.edu.cn/andrew.wang/
MSN:[email protected]
Skype:wangguoan2006; QQ:114841804
http://econet.zjgsu.edu.cn/andrew.wang
E-mail: [email protected]
Contents
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China’s economic growth
China’s trade relations with its partners
China’s trade relations with Australia and Pakistan
Sources of trade frictions with its partners
References/Useful websites
I. China’s economic growth
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Fastest growing economy, annual growth rate of
about 10% since1978.
GDP:US$7.5trillion in 2011, No.2 economic power
since 2010. It is expected to surpass USA in 2019.
But its GDP per capita is $4,283 (in 2010), only 12%
of Japan’s and 10% of USA’s, ranking 95th in the
world.
I. China’s economic growth
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No. 2 largest trading nation in the world, its trade
volume amounted to US$3.6 trillion in 2011.
Largest exporter and second largest importer.
Largest foreign exchange reserves: US$ 3.18 trillion
in 2011.
I. China’s economic growth
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Largest consumer of natural resources, increasing at
the rate of 8.9% in the last 10 years.
Second largest financial revenue in the world, but
China’s medical expenditure accounts for only 1.2%
of its GDP. Most of the farming population have no
medical or social insurance.
Biggest FDI recipient among developing countries in
the last two decades.
I. China’s economic growth
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China’s outbound FDI increased to over US$ 60
billion in 2011, the fifth outbound Foreign Direct
Investor in the world.
Increasing focus on company acquisition in
developed countries.
I. China’s economic growth
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Largest manufacturer in the world after USA was the
largest for 110 years, but most of the foreign
companies’ R & D and marketing centers are in
developed countries, such in USA, EU and Japan.
Chinese workers are paid only a very low salary and
are exploited and its environment polluted and natural
resources exhausted.
I. China’s economic growth
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The economic miracle in China in the last 33 years,
but it is made by the world. China is only a small
shareholder in the economic miracle, most of the
profits have gone to the transnational companies from
developed countries. Foreign companies in China
have contributed a lot to China’s GDP. Many
products have been made in China, but few have been
designed or created or invented in China.
II. China’s trade relations with its partners
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FTA with Chile, ASEAN, Pakistan, New Zealand,
Singapore, Peru and Costa Rica.
CEPA (Closer Economic Partnership Arrangement)
with Hong Kong and Macau; ECFA（Economic
Cooperation Framework Agreement) with Taiwan.
II. China’s trade relations with its partners
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Biggest trading partner of most of Asian countries
and most of the economic powers.
Ten major trade partners in 2008: EU,USA, Japan,
Hong Kong, S. Korea, Taiwan, Australia, Russia and
India. Its trade volume with them amounted to
US$1944.5 billion, accounting for 75.9% of its total
trade.
China's top trade partners 2009 (US$ billion)
Source: PRC General Administration of Customs, China's
Customs Statistics
Rank Country/region
1
United States
2
Japan
3
Hong Kong
4
South Korea
5
Taiwan
6
Germany
7
Australia
8
Malaysia
9
Singapore
10
India
Volume
298.3
228.9
174.9
156.2
106.2
105.7
60.1
52.0
47.9
43.4
China's top trade partners 2010 (US$ billion)
Source: PRC General Administration of Customs, China's
Customs Statistics
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Taiwan
Brazil
Hong Kong
South Korea
USA
Japan
Australia
EU
Russia
India
III. Sino-Australia trade relations
III. Sino-Australia trade relations
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Established formal diplomatic relations in1972 when
bilateral trade volume amounted to only US$72 million,
increased to US$6.3 billion in 1999.
Since China joined the World Trade Organization (WTO),
Sino-Australian trade volume has shot up.
China has become Australia’s largest trading partner
since 2009.
2008-2009 bilateral trade volume reached nearly US$60
billion, 36.27% higher than the previous year.
Over 66% of Australia’s total exports to China originate
from Western Australia.
III. Sino-Australia Trade Volume
Trade Volume
(US $ Billion)
70
60
50
40
30
20
10
0
2000
2001
2002
2003
2004
2005
Year
Total
Export
Import
2006
2007
2008
III. Sino-Australia trade relations
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Trade deficit with Australia: $18.8 billion in 2009
Main imports from Australia: minerals, base metals and
related products, textile materials
Main exports to Australia: mechanical and electronic
products, textiles, furniture and toys
Australia is China’s eighth biggest trade partner.
The Sino-Australian free trade talks began in April 2005
and 13 rounds of talks have been conducted. In April
2008, Australian former Prime Minister Kevin Rudd
visited China and agreed to restart free trade talks.
Western Australia is BIG
WA’s population of 2.2
million people live
across an area three
times as big as Texas
Perth is the western
gateway to Australia
United Kingdom
Texas
Japan
Perth Statistics
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Perth, Western Australia is
Australia’s strongest economy.
10 % of Australia’s population
22% of Australia’s jobs
35% of Australia’s GDP
40% of Australia’s Exports
Perth Statistics
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Perth, Western Australia is
Australia’s strongest economy.
WA exports to China in 2010
reached A$41billion, accounting for
40% of WA exports and 70% of
Australian exports to China.
WA exports to China grew from A$4
billion in 2002 to A$41 billion in
2010.
IV. Sino-Pakistan trade relations
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China and Pakistan established their
diplomatic relations on May 21, 1951.
The stable relationship has set a good model in
the world diplomatic history over the past 60
years.
Friends in need are friends indeed
Pakistan’s all reserved tents and emergency assistance
to China after 8.0-magnitude Wenchuan earthquake in
Sichuan Province in 2008, and all its transport planes
and all its reserved tents to China’s southern parts
during its fight against the severe floods in 2009
 Pakistan’s generous immediate aid to the earthquakestruck Yushu country in Qinghai, China.
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Friends in need are friends indeed
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China’s aid to Pakistan has created many records
in the history of China’s aid to and relief work in
other countries, such as the largest-ever
humanitarian aid (US$250 million), first medical
relief team abroad, first use of military
helicopters, first fleet of 101 trucks loaded with
daily necessities to travel by land during
Pakistan’s battle against its flood in 2010.
Friends in need are friends indeed
China’s full recognition of and support to
Pakistan’s effort in combating terrorism.
 Pakistan’s strong support to China on issues of
Taiwan, Tibet, Xinjiang (East Turkistan) and
human rights and in China’s battle against
terrorism, separatism and extremism on the
international stage.
In brief, we are all-weather strategic partners,
good neighbors, good friends and good brothers.
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IV. Sino-Pakistan trade relations
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The bilateral trade volume amounted to only US$ 580 million
in 1990 and the number stayed around US$ 1 billion in the
1990s.
Since China joined the World Trade Organization (WTO),
Sino-Pakistan trade volume has shot up.
China is the fourth trade partner, the second import original
place and the seventh export market of Pakistan.
The bilateral trade volume amounted to US$6.98 billion in
2008. Affected by the global financial crisis, the bilateral trade
volume of 2009 dropped a little, but still amounted to US$
6.67 billion.
IV. Sino-Pakistan Trade Volume
IV. Sino-Pakistan trade relations
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Trade deficit of Pakistan with China: $4.389 billion in
2009
China’s main exports to Pakistan include high-tech
products, chemical products, plastic products and
home appliances, etc.
Pakistan’s main exports to China are cotton, textiles,
leather and aquatic products, etc.
IV. Sino-Pakistan trade relations
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China-Pakistan Free Trade Agreement (CPFTA)
was signed on 24th November 2006 and took
effect on July 1, 2007. China-Pakistan Agreement
on Trade in Services was signed and took effect
on 21st February 2009 and took effect on October
10, 2009.
The bilateral trade volume with Pakistan would
soar to US$15 billion by 2015.
Barriers to Sino-Pakistan economic cooperation
1. The unstable and risk zones in Pakistan have
undoubtedly made some of the Chinese
managers reluctant to invest in Pakistan. Suicide
attacks and bombing have killed 4,000 people
across Pakistan in recent years according to AFP.
2. Pakistan’s infrastructure in transportation,
communication, energy supply, education has
much room for improvement.
Barriers to Sino-Pakistan economic cooperation
3. Compared with the wide range of imports from
China, the number of products from Pakistan for
exportation to China is limited. Therefore
Pakistan maintains a growing trade deficit with
China, which is a concern for both sides.
4. In the Chinese market, the enterprises from
Pakistan are not as aggressive and active as their
counterparts from other Asian countries.
Barriers to Sino-Pakistan economic cooperation
5. Pakistan focuses its attention to bringing in
technology and attracting the investment from
China and reduction of the trade deficit while
Chinese enterprises tend to focus on the
expansion of their market and the exploitation of
the natural resources
in Pakistan. The
difference of both sides’ objectives can lead to
the slow pace of cooperation, unreasonable
economic structures, the constrained cooperation
scale.
Barriers to Sino-Pakistan economic cooperation
6. The Sino-Pakistan cultural differences have
made it difficult for both sides to deepen
economic cooperation. We have to enhance
communication between the young generation of
the two countries.
Favorable conditions for widening SinoPakistan economic cooperation
1. Increasingly strengthened political ties and all
weather strategic partnership.
2. Complementary economic structures
China’s strong relationship with Pakistan is
conducive to its food and energy security,
maintenance of its economic and trade
relationship with the countries in the Gulf region
and consolidation of its economic presence in
Asia.
Favorable conditions for widening SinoPakistan economic cooperation
3. Both sides need each other in its economic
development. Pakistan needs FDI to rebuild its
infrastructure severely damaged by its natural
disasters and terrorist attacks.
4. Need to keep power balance in regional peace and
development in South Asia.
Favorable conditions for widening SinoPakistan economic cooperation
5. Geographical proximity/closeness
6. Institutional guarantee by FTA
The establishment of the China-Pakistan free
trade area can boost both sides’ productivity and
deepen the cooperation level and broaden
cooperation scale. The China-Pakistan Business
Summit offers a good opportunity to the two sides
to deepen our collaboration in all sectors.
7. Pakistan’s very attractive FDI policies
Promising Sino-Pakistan economic cooperation
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Agreements and trade deals formalized by
business leaders and cabinet ministers during
Chinese Premier Wen’s amounted to $35 billion
(AFP). On 19th December 2010, Tariq Puri, the
chief executive officer from Pakistan Trade
Development Authority Of Pakistan (TDAP)
announced that the bilateral trade volume between
China and Pakistan would soar to US$10 billion
in the next two years and would amount to US$15
billion by 2015.
Promising Sino-Pakistan economic cooperation
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China’s Ministry of Commerce has vowed to
increase the bilateral trade volume to US$15
billion by 2015,too. Mr. Masood Khan,
Pakistani ambassador to China said that SinoPakistan trade volume is likely to increase to
US$18 billion in less five years.
V. Sources of trade frictions
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Foreign trade surplus value
USA: USD101.9 billion 2005, USD177.47 billion in
2006, $256 billion in 2007, $227 billion in 2009,
US$183.1 billion in 2010.
Since 1997, the trade between China and USA has
grown 12.5% per year and more than one quarter of
Chinese exports are sold to USA. But 60% of
Chinese-made products are made by US companies in
China.
V. Sources of trade friction
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Antidumping duties against Chinese products
Exchange rate between the Chinese currency RMB
yuan and other major currencies, such as US$ and
Japanese yen
Technical barriers to Chinese products: health and
sanitary regulation, packaging and labeling regulation
Technical standards (e.g. ISO9000-9004/GB/T19000;
ISO14000: environment; ISO18000,safety.)
V. Sources of trade friction
 Special Safeguard (export quantity) measures
 Intellectual Property Rights violations and
protection During the 11th Five-Year Plan
period (2006-2010), a total of 265,000 cases
concerning trademark violations had been
investigated, an annual average of 53,000 cases.
China investigated 56,000 trademark rights
infringement cases in 2010, an increase of 9.78
percent year on year
 Human rights
 Competition for natural resources
VI. References / Useful websites
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For more information about China’s foreign trade,
please visit
http://www.stats.gov.cn/english/statisticaldata
http://english.mofcom.gov.cn/
http://english.customs.gov.cn/
http://www.cantonfair.org.cn/en/
http://en.expo2010.cn/
www.alibaba.com
Any questions?
Thank you for your attention.
Professor Guo An (Andrew) Wang
Dept. of International Trade
Zhejiang Gongshang University, China
E-mail：[email protected]
Mobile:86-136-0051-6079