Part Four: International Trade

1. international Trade

a. Federal Direct Investment by other countries was a heavy influence on the growth of China. The country experience a gradual increase in exports around 1993. Foreign investments played a crucial role in China's legendary expansion. For example in 1998 China was the largest exporter in the world, however if FDI was taken out China's rank would drop to 15th largest. Another factor that contributed to China is its comparative advantage in labor. It is much cheaper to produce labor intensive goods in China than to produce in the United States. Therefore China mainly imports raw materials and assembles them to produce larger parts for export. Today China is arguably the largest exporter in the world. Its top 3 trading partners are the United States, Japan and Hong Kong.   The country's top exports consist of power generation equipment, electrical machinery and oil seeds and oleaginous fruits.

b. China's imports were significantly higher than its exports in the early 1990s. The reason for the unbalance was due to the country's heavy dependence on importing a majority of their goods. However as the country began to grow rapidly, the economy grew and as a result China was able to focus on its domestic production. By the late 1990's the rate of imports were similar to the rate of exports. Today China is a significant importer and contributes to world trade. Its top 3 imports consist of toys, games, electrical equipment and power generator equipment. The countries top 3 imports are from South Korea, Japan and Taiwan.

2. The official currency in China is the Yuan Renminbi. One U.S dollar is equivalent to 6.22 Yuan Renminbi. The country has a history of multiple series consisting of changes to the Yuan and bank notes. The printing of Yuan is managed by the China Banknote and Minting.

3. China has had a history of restricting anyone in the country or outside of the country from immigrating and emigrating. Due to these restrictions, there has not been a significant source of immigration from the country. However during the mid 1990's the country started to allow groups of people immigrate from the country through excuses. For example in 1960 China allowed approximately 100,000 people to migrate to Hong Kong. The most significant source of emigration and immigration is done through over sea countries near China.

4. China had the latest entry to the World trade Organization. For years there has been conflicts regarding numerous negotiations to allow China to become a member of the WTO. In order to gain membership, the country had to go through many policy changes to allow a more open economy. One significant policy change led to the government's pursuit to combine communism with capitalism. This combination resulted in the birth of the country's socialist market, which drastically opened the economy for trade. Some of China's allies include North Korea, Pakistan and Myanmar.