China's entry into the World Trade Organization in 2001 ushered in a period of rapid growth for the country's foreign trade. The sound momentum was maintained in 2005.

Total value of imports and exports reached $1.4221 trillion, up 23.2 percent over the previous year. Of this total, the value of exports was $762.0 billion, up 28.4 percent; and the value of imports was $660.1 billion, up 17.6 percent. China had a trade surplus of $101.9 billion. Among the total imports and exports of the country, that of foreign-funded enterprises was $831.7 billion, an increase of 25.4 percent over the previous year. Of this total, the value of exports was $444.2 billion, up 31.2 percent; and that of import was $387.5 billion, up 19.4 percent.

The year 2005 witnessed the approval of establishment of 44,001 enterprises with foreign direct investment in China, up 0.8 percent over the previous year; and foreign capital actually utilized was $60.3 billion, down 0.5 percent. Of the total foreign direct investment actually utilized, the share of investment in manufacturing and real estate sectors accounted for 70.4 percent and 9 percent, respectively, down 0.6 percentage points and 0.8 percentage points over that in the pervious year, and the share of investment in leasing and business service and in transportation, warehousing and post service accounted for 6.2 percent and 3 percent, respectively, up 1.6 percentage points and 0.9 percentage points.

In 2005, the overseas direct investment (non-financial investment) by Chinese investors was $6.9 billion, up 25.8 percent over the previous year.

In 2005, the accomplished business revenue through contracted overseas engineering projects was $21.8 billion, up 24.6 percent, and the business revenue through overseas labor contracts was $4.8 billion, up 27.5 percent.

Regional Economic Cooperation In 2005, China energetically developed regional economic cooperation and accelerated creation of free trade areas (FTAs) with some countries and regions. It signed a free trade agreement with Chile and launched FTA negotiation with Pakistan. The country also started FTA talks with Southern Africa, Latin America and South Asia. Negotiation between China and the Gulf Cooperation Council, New Zealand and Australia on trade liberalization was in process. China is now engaged in nine FTA talks, involving 27 countries and regions. Of the proposed FTAs, that between China and the Association of South East Asian Nations leads others in the development level.

In July 2005, the Second Greater Mekong Sub-region (GMS) Economic Cooperation Summit was held in Kunming, which adopted the GMS Strategic Frame of Facilitation on Trade and Investment. The document identifies four priorities for cooperation, namely, the simplification of customs procedures, coordination of inspection and quarantine measures, promotion of trade logistics and facilitation of the mobility of business people.

Supplement II to Closer Economic Partnership Arrangements between the Chinese Mainland and Hong Kong/Macao was signed in October 2005. Under the pact, the mainland agrees to give all products of Hong Kong/Macao origin tariff free treatment beginning January 1, 2006. On trade in services, market access thresholds are further lowered in 10 areas of legal, accounting, audiovisual, construction, distribution, banking, securities, tourism, transport and individually owned stores, to prompt integration of mainland and Hong Kong/Macao economies.

On November 2, 2005, the First Session of the Ministerial Council of the Bangkok Agreement was held in Beijing. At the meeting, representatives from member countries decided to rename the pact to Asia-Pacific Trade Agreement. Beginning July 1, 2006, all member countries will provide tariff reduction on more than 4,000 tariff items.

Source: Show China