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China Briefings

Reports on China issued by Samsung Economic Research Institute

China's Trade Structure Upgrade and Its Impact on Korea

China's Trade Structure Upgrade and Its Impact on Korea

Samsung Economic Research Institute Beijing Office

Mar. 16, 2007

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China's trade volume has grown dramatically since its 2001 accession into the World Trade Organization (WTO). Since then, China's annual exports have increased 3.63 times, from US$266.7 billion in 2001 to US$969.3 billion in 2006 for 30% annual growth. China's exports are expected to maintain 30% growth in 2007 with a total trade surplus roughly around US$200 billion for the year.

China's annual imports increased from US$243.6 billion in 2001 to US$791.8 billion in 2006, growing 27% annually since China's WTO accession. Given that growth in exports is likely to outstrip imports in 2007, China's trade surplus will not likely fall.

As China's trade volume has grown, the economy's dependence on trade (total amount of trade as a share of GDP) has also increased. The nation's trade dependence increased from 38% in 2001 to 64% in 2005.

"High-technology products" have accounted for an increasingly large portion of China's total exports. The share of high-tech products in the nation's total exports grew 12.6 percentage points from 44.6% in 2000 to 57.2% in 2005 while the share of low-tech products decreased 12.8 percentage points from 42.7% in 2000 to 29.9% in 2005. China's export structure has improved as evidenced by the fact that exports of high-tech products grew 32% annually between 2000 and 2005 while those of low-tech products increased a relatively low 17% annually over the same period.

In the nation's exports, the share of office equipment grew rapidly from 7.9% in 2000 to 15.1% in 2005. The share of audiovisual & communications equipment also increased sharply from 11.6% in 2000 to 16.7% in 2005. On the other hand, the share of labor-intensive industries has fallen dramatically. For example, the share of clothing tumbled from 21.1% to 7.7%; that of leather products fell from 6.2% to 3.9%; and that of textile fell from 9.8% to 7.6% over the same period. A brief look at China's export growth rate in January 2007 shows that electrical equipment export grew a whopping 40.1% year-on-year and electronic appliance export increased a good 30.5% year-on-year for the month. But, the in the same month, footwear exports grew 17.2% and textile exports increased 11.6%.

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