17.2 China's role in globalization and international trade

China's economic reforms since 1978 transformed it into a global powerhouse. Opening up to foreign investment, joining the WTO, and becoming the world's largest exporter reshaped international trade patterns and supply chains.

China's rise impacts global governance and challenges existing economic structures. While offering opportunities for foreign businesses, market access and intellectual property concerns persist. China's growing influence in international institutions reflects its economic clout.

China's Integration into the Global Economy

China's global economic integration

Top images from around the web for China's global economic integration

• 

  Reading: The World Trade Organization (WTO) | Introduction to Business View original

  Is this image relevant?

• 

  File:1 AD to 2003 AD Historical Trends in global distribution of GDP China India Western Europe ... View original

  Is this image relevant?

• 

  China, Economic Growth, Economic Reforms, Sri Lanka View original

  Is this image relevant?

• 

  Reading: The World Trade Organization (WTO) | Introduction to Business View original

  Is this image relevant?

• 

  File:1 AD to 2003 AD Historical Trends in global distribution of GDP China India Western Europe ... View original

  Is this image relevant?

1 of 3

Top images from around the web for China's global economic integration

• 

  Reading: The World Trade Organization (WTO) | Introduction to Business View original

  Is this image relevant?

• 

  File:1 AD to 2003 AD Historical Trends in global distribution of GDP China India Western Europe ... View original

  Is this image relevant?

• 

  China, Economic Growth, Economic Reforms, Sri Lanka View original

  Is this image relevant?

• 

  Reading: The World Trade Organization (WTO) | Introduction to Business View original

  Is this image relevant?

• 

  File:1 AD to 2003 AD Historical Trends in global distribution of GDP China India Western Europe ... View original

  Is this image relevant?

1 of 3

• Economic reforms and opening-up policy initiated in 1978
  • Shifted from centrally planned economy to market-oriented economy allowing for greater private enterprise and foreign investment
  • Gradually liberalized trade and investment policies to encourage exports and attract foreign capital (Special Economic Zones)
• Accession to the World Trade Organization (WTO) in 2001
  • Committed to further opening its markets and adhering to international trade rules set by the WTO
  • Increased access to global markets for Chinese goods and services by reducing tariffs and trade barriers
• Rapid growth in international trade propelled China's economic rise
  • Became the world's largest exporter in 2009 surpassing Germany and the US
  • Surpassed the United States as the world's largest trading nation in 2013 in terms of total trade volume
• Significantly impacted global trade patterns
  • Increased competition in labor-intensive manufacturing sectors like textiles and electronics
  • Shifted production networks and supply chains to China as multinational corporations sought lower costs
  • Contributed to the decline of manufacturing in developed countries as jobs moved to China

China's major trade partnerships

• United States is China's largest trading partner
  • China has a significant trade surplus with the US leading to tensions
  • Disputes over trade practices, intellectual property rights, and accusations of currency manipulation strain the relationship
• European Union is China's second-largest trading partner
  • Growing trade and investment ties between China and the EU
  • Concerns over market access, Chinese government subsidies, and human rights issues complicate the partnership
• Other major partners in Asia
  • Japan, South Korea, and ASEAN (Association of Southeast Asian Nations) countries have increasing trade and investment flows with China
  • China's Belt and Road Initiative aimed at strengthening regional connectivity through infrastructure projects (ports, railways, highways)

China's Economic Power and Global Governance

China's influence on economic governance

• Increased representation in international financial institutions gives China more clout
  • Gained larger voting shares in the International Monetary Fund (IMF) and World Bank recognizing its economic size
  • Established the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB) as alternatives to Western-led institutions
• Seeks to influence the global economic agenda
  • Advocates for a more multipolar world order not dominated by the US
  • Promotes South-South cooperation and alternative development models emphasizing state involvement
• Challenges the existing international economic order
  • Concerns over China's state-led economic model and its compatibility with market-based systems
  • Debates over the role of the state in the economy and the need for a level playing field between state-owned and private firms

Foreign business in China

• Market access remains a challenge
  • Restrictions on foreign ownership in certain sectors like finance and telecommunications
  • Complex regulatory environment and bureaucratic hurdles make doing business difficult
• Intellectual property protection is a major concern
  • Inadequate enforcement of intellectual property rights leads to widespread counterfeiting
  • Some foreign firms forced to transfer technology as a condition for market access
• Local competition from Chinese firms is intensifying
  • Rise of domestic Chinese firms in various industries from tech to auto manufacturing
  • Government support and preferential treatment for local companies disadvantage foreign rivals
• Significant opportunities still exist
  • Large and growing consumer market with a rising middle class
  • Increasing purchasing power of Chinese consumers attracts foreign brands
  • Potential for collaboration and partnerships with Chinese firms to access the market