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→Foreign Investment
Opening to the outside remains central to China's development. Foreign-invested enterprises produce about half of China's exports, and China continues to attract large investment inflows. Foreign exchange reserves were $1.1 trillion at the end of 2006, and have now surpassed those of Japan, making China's foreign exchange reserves the largest in the world.
Opening to the outside remains central to China's development. Foreign-invested enterprises produce about half of China's exports, and China continues to attract large investment inflows. Foreign exchange reserves were $1.1 trillion at the end of 2006, and have now surpassed those of Japan, making China's foreign exchange reserves the largest in the world.
===WTO membership===
Despite the CCP's human rights abuses in the Tiananmen massacre, no trade sanctions were ever leveled by Western Powers and globalists. China was rewarded for its human rights abuses in 2001, despite the absence of reforms, by being welcomed into the [[World Trade Organization]] with full membership and a year later granted [[Most Favored Nation]] trade status by the [[U.S. Congress]].
China's merchandise exports totaled $969.3 billion and imports totaled $791.8 billion in 2006. Its global trade surplus surged from $32 billion in 2004 to $177.5 billion in 2006. China's primary trading partners include Japan, the EU, the United States, South Korea, Hong Kong, and Taiwan. According to U.S. statistics, China had a trade surplus with the U.S. of $232.6 billion in 2006.
China has taken important steps to open its foreign trading system and integrate itself into the world trading system. In November 1991, China joined the Asia-Pacific Economic Cooperation (APEC) group, which promotes free trade and cooperation in the economic, trade, investment, and technology spheres. China served as APEC chair in 2001, and Shanghai hosted the annual APEC leaders meeting in October of that year.
China formally joined the WTO in December 2001. As part of this far-reaching trade liberalization agreement, China agreed to lower tariffs and abolish market impediments. Chinese and foreign businessmen, for example, gained the right to import and export on their own, and to sell their products without going through a government middleman. By 2005, average tariff rates on key U.S. agricultural exports dropped from 31% to 14% and on industrial products from 25% to 9%. The agreement also opens up new opportunities for U.S. providers of services like banking, insurance, and telecommunications. China has made significant progress implementing its WTO commitments, but serious concerns remain, particularly in the realm of intellectual property rights protection.
While accession does not guarantee smaller trade deficits, full implementation of all WTO commitments would further open China's markets to—and help level the playing field for—U.S. exports. China is now one of the most important markets for U.S. exports: in 2006, U.S. exports to China totaled $55.2 billion, almost triple the $19 billion when China joined the WTO in 2001 and up 32% over 2005. U.S. agricultural exports have increased dramatically, making China our fourth-largest agricultural export market (after Canada, Japan, and Mexico). Over the same period (2001-2006), U.S. imports from China have risen from $102 billion to $287.8 billion.
Export growth continues to be a major driver of China's rapid economic growth. To increase exports, China has pursued policies such as fostering the rapid development of foreign-invested factories, which assemble imported components into consumer goods for export, and liberalizing trading rights. In its eleventh Five-Year Program, adopted in 2005, China placed greater emphasis on developing a consumer demand-driven economy to sustain economic growth and address global imbalances.
The United States is one of China's primary suppliers of power generating equipment, aircraft and parts, computers and industrial machinery, raw materials, and chemical and agricultural products. However, U.S. exporters continue to have concerns about fair market access due to strict testing and standards requirements for some imported products. In addition, a lack of transparency in the regulatory process makes it difficult for businesses to plan for changes in the domestic market structure. The April 11, 2006 U.S.-China Joint Commission on Commerce and Trade (JCCT) produced agreements on key U.S. trade concerns ranging from market access to U.S. beef, medical devices, and telecommunications; to the enforcement of intellectual property rights, including, significantly, software. The JCCT also produced an agreement to establish a U.S.-China High Technology and Strategic Trade Working Group to review export control cooperation and facilitate high technology trade.
===Regulatory Environment===
===Regulatory Environment===