China has a steadily developing relationship with the American and Oceanian area in the 30 years of reform and opening up
The economic and trade relations between China and the American and Oceanian area have been developing most soundly and rapidly during the 30 years of reform and opening up. In this period of time, senior leaders of China and the major countries in the American and Oceanian area had frequent contacts, political mutual trust has been intensifying, pragmatic cooperation in the fields of economic and trade has been expanding, bilateral trade has been growing rapidly, and cross investment has been increasing on a large scale.
At the initial stages of reform and opening up, the economic and trade cooperation between China and the American and Oceanian area was restricted to general trade exchange with limited scale. As China’s policy of reform and opening up continues to deepen, foreign trade policies and systems keep reforming and improving, especially China’s socialist market economy has been established, the economic and trade cooperation between various forms of economics of China and the American and Oceanian area has been fully developed on the basis of “equality, mutual benefit and common development”, and plays an increasingly important role in China’s foreign trade relations. According to the statistics of China Customs, in 2007, the volume of trade between China and the countries of the American and Oceanian area reached US $484.2 billion, accounting for 22.3% of China’s total trade volume. Of these US $484.2 billion, US $324.6 billion came from China’s export to the countries of the American and Oceanian area, accounting for 26.7% of the country’s total export amount; US $159.4 billion came from China’s import from the countries of the American and Oceanian area, accounting for 16.7% of the country’s total import amount. From January to October of this year, the trade amount between China and the American and Oceanian area totaled US $490.79 billion, which has exceeded that of the year 2007 and accounted for 25% of China’s total foreign trade amount in the same period last year.
The economic and trade cooperation with the United States is of great significance to China’s entire foreign economic and trade relations. Since 1979, when China and the United States established formal diplomatic relations, Sino-American bilateral economic and trade relations have been developing rapidly. In 2007, the bilateral trade between the two countries amounted to US $302.1 billion, an increase of 305 fold over 1978 (US $990 million), with an average annual increase of 21%. Since the entry into WTO in 2001, China has become the fastest growing major export market of the United States, rising from the ninth largest export market to the currently third largest export market of the United States, and the fourth largest trade partner to the second largest trade partner of the United States. Meanwhile, the United States is China’s second largest trade partner and second largest export market (second only to the European Union).
While the bilateral trades were developing rapidly, the bilateral investments of the USA and China were also developing rapidly. The USA is one of the regions that have invested most capitals in China. A lot of multinational corporations of the USA take their investments in China as an important part of their global strategies. Four hundred of the 500 most powerful US multinational corporations have invested in China or have carried out cooperation in China. By the end of October of 2008, the number of the enterprises invested and established by US corporations has exceeded 56,000, and the total amount of the actual investments by US corporations has exceeded US $ 59 billion. Meanwhile, more and more Chinese enterprises have started to invest in the USA too. The amount of the investments by Chinese enterprises in the USA is not large, but is increasing rapidly. By the end of September of 2008, Chinese enterprises had established over 1,200 enterprises in the USA and had invested about US $ 3 billion. In the case that the Lenovo purchased the PC Department of the IBM, which was approved in the beginning of 2005, the total investment by China was as high as US $ 1.2 billion. China also obtained great achievements in contracting for the projects of the USA. By the end of September of 2008, the total value of the project contracts signed by Chinese enterprises in the USA had reached US $ 8.35 billion, and the total completed turnover had reached US $ 7.02 billion.
Besides the USA, the trades between China and other developed countries of the region including Canada, Australia and New Zealand, are also developing steadily. In 2007, the volumes of trade between China and Canada, Australia and New Zealand had increased 46 times, 52 times and 77 times compared to 1978, and were US $ 30.38 billion, 43.8 billion and 3.7 billion. The bilateral investments, project contracts, labor service cooperation and design consultancy business between China and those countries were also increasing.
Latin America and the Caribbean region is an important region of China’s market diversification strategies. Over the 30 years of reform and opening-up, China’s economic and trade cooperation with the region started from bilateral trade, and its scale continued to increase; with the development of bilateral trade, the economic and trade ties started to expand to a comprehensive cooperation of multiple layers in multiple areas including two-way investment, projects contracting and high-tech cooperation. According to China Customs statistics, trade volume between China and the Latin American and Caribbean region in 2007 was over US $102.5 billion, increased nearly 80 times over the US $1.29 billion in 1979, and it reached the goal of surpassing US $100 billion mark three years ahead of schedule. The goal which was originally scheduled for 2010 was proposed by President Hu Jintao on a state visit to Latin America in 2004. From January to October, 2008, trade volume between China and the Latin American and Caribbean region totaled US $124.112 billion, an increase of 51.2% year-on-year, much higher than the 24.8% growth rate of China’s overall foreign trade at the same period. Of which, China’s export to Latin American and Caribbean region was US $61.131 billion, while import stood at US $62.981 billion, an increase of 47.79% and 54.67% year-on-year respectively, the import and export were almost balanced.
Latin American and Caribbean region is also an important area where China’s “making way into the world market” strategies are implemented. By the end of 2007, China’s total direct foreign investment in the non-financial sectors have reached US $21.58 billion, covering areas including trade, projects contracting, manufacturing, oil and natural gas, and development and investment in mineral resources.
Over the past 30 years of reform and opening-up, China’s economic and trade cooperation between the developed and developing countries in the Americas and Oceania have made huge progress, in addition, its economic and trade ties with some small and underdeveloped economies in the South Pacific island countries are becoming increasingly close. In 2007, the trade volume between China and the South Pacific island countries was US $1.53 billion, 77 times over 1978. Of which, China’s export totaled US $870 million, while import stood at US $660 million, an increase of 9-fold and 57-fold over 1978. In addition, the economic and technical cooperation between China and the South Pacific island countries has also resulted in plentiful accomplishments.
During its 30 years of opening-up to the outside world, China has gradually established a series of bilateral and multilateral economic and trade dialogue mechanisms with the American and Oceanian area. These mechanisms have become an important platform for China to discuss and find solutions to issues of trade and economic cooperation that emerge between China and various nations on the two continents. They also play an important role in the healthy and stable development of economic and trade ties. The following bilateral intergovernmental trade and economic dialogue mechanisms have been established between China and major nations: China has established joint bilateral commissions with the US, Canada, Australia, and New Zealand; bilateral mixed committee mechanisms with 13 Latin American and Caribbean countries. There has also been the establishment of the high-level Coordination and Cooperation Committee with Brazil; the Sino-Mexican bilateral high-level working group that China has set up with the Mexican Ministry of Economic Affairs; the bilateral economic and trade negotiations committee established by China with the Costa Rica Foreign Trade Ministry; and a Joint Commission on economic and trade mechanisms set up with the South Pacific island nation of Fiji. In addition, there are two mechanisms for multilateral dialogue: the China – Caribbean Economic and Trade Cooperation Forum and the China – Pacific Island Countries Economic Development Cooperation Forum.
The free trade agreements and ongoing negotiations that China has established with some of the regions have greatly promoted economic and trade relations between the countries. In April 2008, a free trade agreement was reached and signed by China and New Zealand. This was the first free trade agreement between China and a developed nation. It was also the first comprehensive free trade agreement to be signed by China with another country that covers trade in goods, services investment and many other areas. In November 2005, China and Chile signed a free trade agreement, making the South American country the first developing nation to sign a free trade agreement with China. In addition, China and Peru have concluded free trade negotiations, and will sign an agreement; Costa Rica has completed its feasibility study into a free trade agreement, and is about to start formal free trade negotiations.
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