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China’s Business Relations with China’s Business Relations with Australia and PakistanAustralia and Pakistan
Department of International TradeZhejiang Gongshang University, Chinahttp://econet.zjgsu.edu.cn/andrew.wang/MSN:wangguoanhz@hotmail.com Skype:wangguoan2006; QQ:114841804http://econet.zjgsu.edu.cn/andrew.wangE-mail: wangguoan@zjgsu.edu.cn
Prof. Andrew (Guo-An) Wang Prof. Andrew (Guo-An) Wang 王国安王国安
Contents China’s economic growth China’s trade relations with its partners China’s trade relations with Australia and Pakistan Sources of trade frictions with its partnersSources of trade frictions with its partners References/Useful websites
I. China’s economic growth Fastest growing economy, annual growth rate of
about 10% since1978. GDP:US$7.5trillion in 2011, No.2 economic power
since 2010. It is expected to surpass USA in 2019. But its GDP per capita is $4,283 (in 2010), only 12% of Japan’s and 10% of USA’s, ranking 95th in the world.
I. China’s economic growth
No. 2 largest trading nation in the world, its trade volume amounted to US$3.6 trillion in 2011.
Largest exporter and second largest importer. Largest foreign exchange reserves: US$ 3.18 trillion
in 2011.
I. China’s economic growth
Largest consumer of natural resources, increasing at the rate of 8.9% in the last 10 years.
Second largest financial revenue in the world, but China’s medical expenditure accounts for only 1.2% of its GDP. Most of the farming population have no medical or social insurance.
Biggest FDI recipient among developing countries in the last two decades.
I. China’s economic growth
China’s outbound FDI increased to over US$ 60 billion in 2011, the fifth outbound Foreign Direct Investor in the world.
Increasing focus on company acquisition in developed countries.
I. China’s economic growth
Largest manufacturer in the world after USA was the largest for 110 years, but most of the foreign companies’ R & D and marketing centers are in developed countries, such in USA, EU and Japan. Chinese workers are paid only a very low salary and are exploited and its environment polluted and natural resources exhausted.
I. China’s economic growth
The economic miracle in China in the last 33 years, but it is made by the world. China is only a small shareholder in the economic miracle, most of the profits have gone to the transnational companies from developed countries. Foreign companies in China have contributed a lot to China’s GDP. Many products have been made in China, but few have been designed or created or invented in China.
II. China’s trade relations with its partners
FTA with Chile, ASEAN, Pakistan, New Zealand, Singapore, Peru and Costa Rica.
CEPA (Closer Economic Partnership Arrangement) with Hong Kong and Macau; ECFA ( Economic Cooperation Framework Agreement) with Taiwan.
II. China’s trade relations with its partners
Biggest trading partner of most of Asian countries and most of the economic powers.
Ten major trade partners in 2008: EU,USA, Japan, Hong Kong, S. Korea, Taiwan, Australia, Russia and India. Its trade volume with them amounted to US$1944.5 billion, accounting for 75.9% of its total trade.
China's top trade partners 2009 (US$ billion) Source: PRC General Administration of Customs, China's Customs Statistics
Rank Country/region Volume
1 United States 298.3
2 Japan 228.9
3 Hong Kong 174.9
4 South Korea 156.2
5 Taiwan 106.2
6 Germany 105.7
7 Australia 60.1
8 Malaysia 52.0
9 Singapore 47.9
10 India 43.4
China's top trade partners 2010 (US$ billion) Source: PRC General Administration of Customs, China's Customs Statistics
Taiwan Brazil Hong Kong South Korea USA Japan Australia EU Russia India
III. Sino-Australia trade relations
Established formal diplomatic relations in1972 when bilateral trade volume amounted to only US$72 million, increased to US$6.3 billion in 1999.
Since China joined the World Trade Organization (WTO), Sino-Australian trade volume has shot up.
China has become Australia’s largest trading partner since 2009.
2008-2009 bilateral trade volume reached nearly US$60 billion, 36.27% higher than the previous year.
Over 66% of Australia’s total exports to China originate from Western Australia.
III. Sino-Australia Trade Volume
0
10
20
30
40
50
60
70
2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
Trade Volume(US $ Billion)
Total Export Import
III. Sino-Australia trade relations
Trade deficit with Australia: $18.8 billion in 2009 Main imports from Australia: minerals, base metals and
related products, textile materials Main exports to Australia: mechanical and electronic
products, textiles, furniture and toys Australia is China’s eighth biggest trade partner. The Sino-Australian free trade talks began in April 2005
and 13 rounds of talks have been conducted. In April 2008, Australian former Prime Minister Kevin Rudd visited China and agreed to restart free trade talks.
Western Australia is BIG
TexasTexas
JapanJapan
United KingdomUnited Kingdom
TexasTexas
JapanJapan
United KingdomUnited KingdomWA’s population of 2.2 million people live
across an area three times as big as Texas
Perth is the western gateway to Australia
Perth Statistics
Perth, Western Australia is Australia’s strongest economy.
10 % of Australia’s population 22% of Australia’s jobs 35% of Australia’s GDP 40% of Australia’s Exports
Perth Statistics
Perth, Western Australia is Australia’s strongest economy.
WA exports to China in 2010 reached A$41billion, accounting for 40% of WA exports and 70% of Australian exports to China.
WA exports to China grew from A$4 billion in 2002 to A$41 billion in 2010.
IV. Sino-Pakistan trade relations
China and Pakistan established their diplomatic relations on May 21, 1951.
The stable relationship has set a good model in the world diplomatic history over the past 60 years.
Friends in need are friends indeed
Pakistan’s all reserved tents and emergency assistance to China after 8.0-magnitude Wenchuan earthquake in Sichuan Province in 2008, and all its transport planes and all its reserved tents to China’s southern parts during its fight against the severe floods in 2009
Pakistan’s generous immediate aid to the earthquake-struck Yushu country in Qinghai, China.
Friends in need are friends indeed
China’s aid to Pakistan has created many records in the history of China’s aid to and relief work in other countries, such as the largest-ever humanitarian aid (US$250 million), first medical relief team abroad, first use of military helicopters, first fleet of 101 trucks loaded with daily necessities to travel by land during Pakistan’s battle against its flood in 2010.
Friends in need are friends indeed
China’s full recognition of and support to Pakistan’s effort in combating terrorism.
Pakistan’s strong support to China on issues of Taiwan, Tibet, Xinjiang (East Turkistan) and human rights and in China’s battle against terrorism, separatism and extremism on the international stage.
In brief, we are all-weather strategic partners, good neighbors, good friends and good brothers.
IV. Sino-Pakistan trade relations
The bilateral trade volume amounted to only US$ 580 million in 1990 and the number stayed around US$ 1 billion in the 1990s.
Since China joined the World Trade Organization (WTO), Sino-Pakistan trade volume has shot up.
China is the fourth trade partner, the second import original place and the seventh export market of Pakistan.
The bilateral trade volume amounted to US$6.98 billion in 2008. Affected by the global financial crisis, the bilateral trade volume of 2009 dropped a little, but still amounted to US$ 6.67 billion.
IV. Sino-Pakistan trade relations
Trade deficit of Pakistan with China: $4.389 billion in 2009
China’s main exports to Pakistan include high-tech products, chemical products, plastic products and home appliances, etc.
Pakistan’s main exports to China are cotton, textiles, leather and aquatic products, etc.
IV. Sino-Pakistan trade relations China-Pakistan Free Trade Agreement (CPFTA)
was signed on 24th November 2006 and took effect on July 1, 2007. China-Pakistan Agreement on Trade in Services was signed and took effect on 21st February 2009 and took effect on October 10, 2009.
The bilateral trade volume with Pakistan would soar to US$15 billion by 2015.
1. The unstable and risk zones in Pakistan have undoubtedly made some of the Chinese managers reluctant to invest in Pakistan. Suicide attacks and bombing have killed 4,000 people across Pakistan in recent years according to AFP.
2. Pakistan’s infrastructure in transportation, communication, energy supply, education has much room for improvement.
Barriers to Sino-Pakistan economic cooperation
3. Compared with the wide range of imports from China, the number of products from Pakistan for exportation to China is limited. Therefore Pakistan maintains a growing trade deficit with China, which is a concern for both sides.
4. In the Chinese market, the enterprises from Pakistan are not as aggressive and active as their counterparts from other Asian countries.
Barriers to Sino-Pakistan economic cooperation
5. Pakistan focuses its attention to bringing in technology and attracting the investment from China and reduction of the trade deficit while Chinese enterprises tend to focus on the expansion of their market and the exploitation of the natural resources in Pakistan. The difference of both sides’ objectives can lead to the slow pace of cooperation, unreasonable economic structures, the constrained cooperation scale.
Barriers to Sino-Pakistan economic cooperation
6. The Sino-Pakistan cultural differences have made it difficult for both sides to deepen economic cooperation. We have to enhance communication between the young generation of the two countries.
Barriers to Sino-Pakistan economic cooperation
1. Increasingly strengthened political ties and all weather strategic partnership.
2. Complementary economic structures
China’s strong relationship with Pakistan is conducive to its food and energy security, maintenance of its economic and trade relationship with the countries in the Gulf region and consolidation of its economic presence in Asia.
Favorable conditions for widening Sino-Pakistan economic cooperation
Favorable conditions for widening Sino-Pakistan economic cooperation
3. Both sides need each other in its economic development. Pakistan needs FDI to rebuild its infrastructure severely damaged by its natural disasters and terrorist attacks.
4. Need to keep power balance in regional peace and development in South Asia.
5. Geographical proximity/closeness
6. Institutional guarantee by FTA
The establishment of the China-Pakistan free
trade area can boost both sides’ productivity and
deepen the cooperation level and broaden
cooperation scale. The China-Pakistan Business
Summit offers a good opportunity to the two sides
to deepen our collaboration in all sectors.7. Pakistan’s very attractive FDI policies
Favorable conditions for widening Sino-Pakistan economic cooperation
Promising Sino-Pakistan economic cooperation
Agreements and trade deals formalized by business leaders and cabinet ministers during Chinese Premier Wen’s amounted to $35 billion (AFP). On 19th December 2010, Tariq Puri, the chief executive officer from Pakistan Trade Development Authority Of Pakistan (TDAP) announced that the bilateral trade volume between China and Pakistan would soar to US$10 billion in the next two years and would amount to US$15 billion by 2015.
Promising Sino-Pakistan economic cooperation
China’s Ministry of Commerce has vowed to increase the bilateral trade volume to US$15 billion by 2015,too. Mr. Masood Khan, Pakistani ambassador to China said that Sino-Pakistan trade volume is likely to increase to US$18 billion in less five years.
V. Sources of trade frictionsV. Sources of trade frictions
Foreign trade surplus value USA: USD101.9 billion 2005, USD177.47 billion in
2006, $256 billion in 2007, $227 billion in 2009, US$183.1 billion in 2010.
Since 1997, the trade between China and USA has grown 12.5% per year and more than one quarter of Chinese exports are sold to USA. But 60% of Chinese-made products are made by US companies in China.
V. Sources of trade frictionV. Sources of trade friction
Antidumping duties against Chinese products Exchange rate between the Chinese currency RMB
yuan and other major currencies, such as US$ and Japanese yen
Technical barriers to Chinese products: health and sanitary regulation, packaging and labeling regulation
Technical standards (e.g. ISO9000-9004/GB/T19000; ISO14000: environment; ISO18000,safety.)
V. Sources of trade frictionV. Sources of trade friction Special Safeguard (export quantity) measures Intellectual Property Rights violations and
protection During the 11th Five-Year Plan period (2006-2010), a total of 265,000 cases concerning trademark violations had been investigated, an annual average of 53,000 cases. China investigated 56,000 trademark rights infringement cases in 2010, an increase of 9.78 percent year on year
Human rights Competition for natural resources
VI. References / Useful websites
For more information about China’s foreign trade, please visit
http://www.stats.gov.cn/english/statisticaldata http://english.mofcom.gov.cn/ http://english.customs.gov.cn/ http://www.cantonfair.org.cn/en/ http://en.expo2010.cn/ www.alibaba.com
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