China WT/TPR/S/264/Rev.1 
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  I. ECONOMIC ENVIRONMENT 
(1) MAIN ECONOMIC DEVELOPMENTS  
1. During the period under review (2010-12), China' s economy continued to grow rapidly.  
Supported by a substantial fiscal stimulus amountin g to ¥4 trillion (12.7% of GDP in 2008), China 
emerged from the global financial and economic crisis with strong growth in 2010 and 2011 
(Table I.1).  At the same time, with increasing world prices of primary commodities and domestic food and energy prices, rising property prices in urban areas, and increasing wages, consumer price 
inflation (5.4% in 2011) became a pressing social and economic issue.  At the People's National 
Congress in March 2012, China lowered its prospects fo r annual growth to 7.5%  for 2012;  in 2011, 
growth had been projected officially at 8% and in fact was recorded at 9.2%.  In 2010 and 2011, 
China's nominal GDP per capita (in U.S. dollar term s) increased from around US$4,430 to US$5,417.   
2. China continues to face various economic imbalanc es.  One is its large and persistent surplus 
of national savings over domestic investment, whic h has as its international counterpart China's 
current account surplus in its balance of paym ents.  The second is China's heavy dependence on 
overseas demand for its manufactured exports to sustain economic growth.    
Table I.1 
Selected macroeconomic  indicators, 2007-11 
  2007 2008 2009 2010 2011a 
Nominal GDP (¥ billion) 26,581.0  31,404.5  34,090.3  40,151.3  47,156.4 
Nominal GDP (US$ billion) 3,495.7  4,521.8  4,990.5  5,931.2  7,298.6 
Real GDP (¥ billion, 2005 prices) 23,789. 3  26,081.3  28,484.5  31,460.3  34,354.6 
Real GDP (US$ billion, 2005 prices) 3, 128.5  3,755.4  4,169. 9  4,647.4  5,317.2 
GDP per capita (¥) 20,169.5  23,707.7  25,607.5  30,015.0  34,999.4  
GDP per capita (US$) 2,652.5  3,413.6  3,748.7  4,433.9  5,417.0  
National accounts (%age change) 
Real GDP 14.2 9.6 9.2 10.4 9.2 
   Consumptionb 5.6 4.2 4.4 3.8 .. 
   Investmentb 6.1 4.6 8.4 5.6 .. 
   Net exportsb 2.5 0.8 -3.6 0.9 .. 
Unemployment rate (%)c 4.1 4.4 4.3 4.1 4.1 
Prices and interest rates 
Inflation (CPI, %age change) 4.8 5.9 -0.7 3.3  5.4  
Lending rate  (%, period average) 7.47  5.31  5.31  5.81  6.56 
Deposit rate  (%, period average) 4.14  2.25  2.25  2.75  3.50 
Exchange rate 
Yuan per US$ (period average) 7.604  6.945  6.831  6.770   6.461  
Real effective exchange rate index (%age change)d 4.0  9.2  3.4  -0.5  ..  
Nominal effective exchange rate index (%ag e change) 1.4  6.6  5.0  -1.9   ..  
Fiscal policye  (% of GDP) 
Government balance 0.6 -0.4 -2.3 -1.7  ..  
Total revenue 19.3 19.5 20.1 20.7 22.0 
       Tax revenue 17.2 17.3 17.5 18.2 19.0 
Total expenditure 18.7 19.9 22.4 22.4  ..  
Central government total debt 19.6 17.0 17.7 16.8  ..  
   Domestic debt  19.4 16.8 17.5 16.7  ..  
Table I.1 (cont'd) WT/TPR/S/264/Rev.1 Trade Policy Review 
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    2007 2008 2009 2010 2011a 
Saving and investment 
GDP by expenditure approach (¥ billion) 26,309.4  31,490.1  34,631.7  39,430.8   ..  
     Final consumption expenditure (¥ b illion) 12,879.4  15, 234.7  16,682.0  18,690.5   ..  
     Gross capital formation (¥ billion)  11,091.9  13,832.5  16, 446.3  19,169.1   ..  
     Net export of goods and services (¥ billion) 2,338.1  2,422.9  1,503.3  1,571.2   ..  
     Savings (¥ billion) 13,430. 0  16,255.5  17,949.7  20,740.2   ..  
     Savings to expenditure approach GDP (%) 51.0  51.6  51.8  52.6   ..  
     Investment to expenditure approach GDP (%) 42.2  43.9  47.5  48.6   ..  
     Savings-Investment gap (% of  GDP) 8.9  7.7  4.3  4.0   ..  
External sector (% of GDP, unless otherwise indicated) 
Current account balance  10.1  9.1  5.2  5.2  2.8 
Net merchandise trade  9.0  8.0  5.0  4.3  3.3 
   Value of exports 34.9  31.7  24.1  26.7  26.1 
   Value of imports 25.9  23.7  19.1  22.4  22.7 
Services balance -0.2  -0.3  -0.6  -0.4  -0.8 
Capital account 0.1  0.1  0.1  0.1  0.1 
Financial account 2.6  1.0  3.5  3.7  3.0 
     Direct investment 4.1  2.7  1.4  2.1  2.3 
Balance-of-payments  13.2  10.6  8.0  8.0  5.3 
Merchandise exportsf (%age change) 25.8  17.6  -16.1  31.4  20.4 
Merchandise importsf (%age change) 20.3  18.7  -11.1  39.1  25.1 
Service exportsf (%age change) 32.8  20.4  -11.9  32.2  6.8 
Service importsf (%age change) 29.0  22.1  0.0  21.6  23.2 
Gross official reservesg (US$ billion;  end period) 1,530.3  1,949.3  2,416.0  2,866.1   ..  
    Foreign exchangeh (US$ billion;  end period) 1,528.2  1,946.0  2,399.2  284.7   ..  
Total external debt (US$ billion;  en d period) 389.2  390.2  428.7  548.9  .. 
Debt service ratioi 2.0  1.8  2.9  1.6  .. 
.. Not available. 
a Estimates. 
b Contribution to annual growth in per cent.  Figures are taken from the National Bureau of Statistics of China, Statistical 
Yearbook 2011 , Table 2-20. 
c Registered unemployment in urban areas. 
d A positive increase in the real effective exchange rate means an appreciation of the renminbi relative to the other major 
currencies in the index. 
e Including central and local governments.    
f Growth rates on merchandise and service trade are based on US$. 
g Excluding gold, including SDRs a nd Reserve Position in the Fund. 
h Excluding gold, SDRs and Reserve Position in the Fund.   
i Debt service ratio refers to the ratio of  the payment of principal and interest of foreign debts to the foreign exchange rece ipts 
from foreign trade and non-trade services of the current year. 
Source:  National Bureau of Statistics of China, Statistical Yearbook (various issues);   I M F ,  International Financial 
Statistics database ;  and data provided by the Chinese authorities.  
3. During the period under review, China adopted few measures to liberalize its international 
trade and investment;  its simple average applied MF N tariff rate (9.5%) as well as the main measures 
related to trade and investment re mained unchanged.  Like most other WTO Members, China resisted 
a trade-restrictive response overall to the effects of the global economic crisis.  However, in a number 
of instances, China introduced measures that r estrict or may restrict trade, notably exports.1  China's 
export regime remains complex, and measures contin ue to be used to manage certain exports.   
                                                      
1 See WTO documents WT/TPR/OV/13, 24 November 2010 and WT/TPR/OV/14, 21 November 2011. China WT/TPR/S/264/Rev.1 
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  4. China considers its participation in regional and bilateral agreem ents to be complementary to 
its membership in the multilateral trading system and to offer it additional ways of expanding and 
diversifying its trade.  
5. China is moving back gradually toward fiscal tightening after the expansive ¥4 trillion fiscal 
stimulus package introduced in 2008-10.2  According to the 2011 Budget, the central government 
budget and local government budgets combined for 2011  will produce collectively a fiscal deficit of 
2.0% of GDP, down from 2.2% in 2010;  central gove rnment gross debt is estimated at around 16.8% 
of GDP for 2011, down from 17.7% in 2009.3  
6. Against the background of the global financia l crisis in 2008, the People's Bank of China 
(PBC) employed accommodative monetary policy to help stimulate domestic demand.4  In 2010 and 
2011, as recovery of economic growth set in and do mestic price inflation began accelerating, the PBC 
raised its benchmark interest rates on both deposits and loans five times and raised the deposit reserve 
ratio 12 times.  The rate of increase in money supply declined in 2011 and new bank lending also 
declined.5  Subsequently, the PBC lowered the deposit reserve ratio by 0.5 percentage point on 
5 December 2011.   
7. Between July 2005 (when China's exchange ra te reform started) and December 2011, the 
renminbi appreciated in nominal terms by about 31 % against the U.S. dollar.  The renminbi's annual 
average nominal exchange rate was ¥6.77 per US$ for 2010 and 6.46 for 2011.  
8. In their most recent public evaluation of China's exchange rate, IMF directors welcomed the 
authorities' commitment to move gradually to more price-based tools of monetary policy and continue 
to improve the monetary policy framework and the inter est rate structure;  they saw room for a further 
tightening of monetary conditions through greater re liance on interest rates and nominal exchange rate 
appreciation, while taking care to safeguard financia l system stability.  They generally agreed that, 
over the medium-term, a stronger RMB would be an important component in rebalancing the 
economy toward domestic demand, and a number of the directors saw this as a prerequisite for 
reforms to strengthen the macroe conomic policy framework and prom ote financial liberalization.  
IMF directors stressed that the appreciation of th e exchange rate would need to be supported by 
wide-ranging reforms to bring about a transf ormation of China's economic growth model.6  
                                                      
2 In the ¥4 trillion stimulus package, the authorities state that the Government substantially increased 
its input to, inter alia, livelihood projects, infrastructure, and reconstruction efforts after disasters;  its pool of 
public investment resources came from, inter alia, budgetary allocations from the public finance, governmental funds' revenue, and earnings from business operations of  state-owned assets.  Meanwh ile, a series of measures, 
like structural tax reductions, and the cancelation or term ination of multiple administrative fees, were taken to 
substantially reduce the burden on businesses and ordinary people. 
3 IMF (2011a).  The central government debt is estimated to be around 60% of GDP when off-budget 
government debt is included, such as debt owed by policy banks, local governments, asset management 
companies, pension, and banks' non-performing loans.   
4 This involved, inter alia,  cuts in interest rates and reserve requirements, reduction in foreign exchange 
sterilization operations, and "windo ws guidance", which, according to the authorities, involves the PBC 
convening meetings with financial institutions, or holding talks with them, to, inter alia,  obtain information on 
their credit loans, provide information on the macro-economy and industrial development, prompt industry risks 
so that financial institutions will take the initiative to adjust the direction of credit loans. 
5 In 2011 (January-May), M2 rose by 15.1% year-on-year, down 4.6 percentage points compared with 
the same period in the previous year. 
6 IMF online information.  Viewed at:  http:// www.imf.org/external/np/sec/pn/2011/pn1194.htm 
[01/09/11]. WT/TPR/S/264/Rev.1 Trade Policy Review 
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  9. The PBC maintains that under Ch ina's "managed floating" exchange rate regime, the RMB 
rate is based on market supply and demand and is adjusted with refere nce to a basket of currencies.  
The authorities consider that against the bac kground of the global econom ic recession, when, 
according to the PBC, many governments allowed th eir currencies to depreciate in order to mitigate 
the negative impact of the crisis on their exports, China maintained a stable  RMB exchange rate.  
According to the authorities, on 19 June 2010, China began a reform of the renminbi exchange rate 
mechanism with a view to gaining more flexibility in renminbi exchange rates.  Emphasis was laid on 
the law of supply and demand and adjustments base d on a basket of currencies within a specified 
floating range on the foreign exchange market.  The authorities state that efforts should be made to 
promote a proper balance between international inco me and expenditure and ma intain the stability of 
the macro-economy as well as that of the financial ma rket;  they consider that RMB is converging 
towards its equilibrium and expect this process to continue over the medium term.  According to the 
Government Report submitted to the National Peopl e's Congress in March 2012, China intends to:  
improve the exchange rate determination mechan ism for renminbi and maintain the stability of 
renminbi exchange rates around its equilibrium leve l;  push forward the convertibility of renminbi 
under the capital account gradually and enlarge the scope of renminbi usage in cross-border trade 
settlement and investment.7   
(2) STRUCTURAL POLICIES   
10. As stated in the Secretariat's report for th e previous Review, despite China's important 
economic achievements against the background of its transition from a centrally planned to a 
market-based economy, it continues to face various economic imbalances, including a large surplus of 
national savings over domestic investment an d overcapacity in several core industries 
(Chapter IV(4)(ii)).  Managing and correcting thes e imbalances represents a challenge for China's 
policymakers, both for domestic purposes and from an international perspective, because of China's 
size and the depth of its integration into the global economy.    
11. China continues to maintain a large surplus of national sav ings over domestic investment, 
which produces its international counterpart in Ch ina's current account surplus in its balance of 
payments.  This continues to frustrate the authoritie s' efforts to reduce China's reliance on exports as a 
source of growth.  The national saving rate was esti mated at 54.0% of GDP in 2011, compared with 
the domestic investment rate of 48.5% of GDP.8  The high national savings ra te is attributable to both 
high household savings, including precautionary saving for education, health and old age, and high 
enterprise saving, partly due to high retained inco me (so as not to rely on the underdeveloped capital 
market), lack of competition for state-owned enterp rises (SOEs), and a lack of incentives for SOEs to 
pay dividends.9   
12. Reform of China's capital market has continue d with a view to creating more efficient 
allocation of savings in the economy and reducing the need for discretionary saving by private 
enterprise.  One indication of this is a gradual sh ift from non-tradeable to tradeable equities.  In the 
past, China's stock market had a split-share structur e, with large volumes of non-tradeable shares for 
listed enterprises (including SOEs);  only around one third of the shares were tradeable.  China began 
converting non-tradeable shares into tradeable shar es from 2005;  according to the authorities, 99% of 
listed companies had undergone the split-share stru cture reform by the end of 2011, on both the 
Shanghai and Shenzhen stock exchan ges.  Once the reforms are completed, original non-tradeable 
                                                      
7 Xinhua net online information (in Chinese).  Viewed at:  http://news.xinhuanet.com/politics/ 
2012lh/2012-03/15/c_111660147.htm. 
8 IMF (2011a). 
9 IMF (2011b). China WT/TPR/S/264/Rev.1 
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  shares become tradeable after a specified period;  no  data on the percentage of total shares already 
floated were made available to the Secretariat.   China's corporate bond mark et remains small;  
outstanding bonds issued as a form of debt were valued at only 9.8% of GDP in 2011.10  
13. The 12th Five-Year Plan aims to reform China's economy into one that is more driven by 
growth of domestic demand.  It is anticipated that this will have the effect of increasing the 
consumption of imported goods and services (Chapter II(2 )(ii)).  Further steps to liberalize trade in 
various sectors can assist in this process, includi ng services which accounted for 43% of GDP in 2010 
(Table I.2).   
Table I.2 
GDP by sector, 2007-10 
    2007 2008 2009 2010 
GDP by industry at 1978 indices (annual %age change)   
Agriculture, forestry and fishing 3.7  5.4  4.2  4.3  
Industrya 14.9  9.9  8.7  12.2  
Construction 16.2  9.5  18.6  13.7  
Services 16.0  10.4  9.6  9.6  
Transport, storage and communication 11.8  7.3  4.2  8.9  
Wholesale and retail trade 20.2  15.8  12.1  14.3  
Restaurants and hotels 9.6  9.6  5.5  10.0  
Financial intermediation 27.6  13.3  18.2  10.0  
Real estate 24.4  1.0  11.3  5.8  
Other 11.3  11.0  7.8  8.0  
Share of main sectors in GDP (%) 
Agriculture, forestry and fishing 10.8  10.7  10.3  10.1  
Industrya 41.6  41.5  39.7  40.1  
Construction 5.8  6.0  6.6  6.7  
Services 41.9  41.8  43.4  43.1  
Transport, storage and communication 5.5  5.2  4.9  4.7  
Wholesale and retail trade 7.9  8.3  8.5  8.9  
Restaurants and hotels 2.1  2.1  2.1  2.0  
Financial intermediation 4.6  4.7  5.2  5.2  
Real estate 5.2  4.7  5.5  5.6  
Other 16.6  16.7  17.2  16.7  
a Including mining and quarrying, manufacturi ng, production and supply of electricity. 
Source :  Data provided by the Chinese authorities.  
14. High household and enterprise savings in China ha ve kept capital costs low.  Input prices 
(such as energy, water, and land) have also been  regulated and kept low as the Government has 
emphasized the development of manufacturing, especially heavy industry.  Thus, China's 
manufacturing, including steel, aluminium, and cement, has continued to tend towards over-investment and overcapacity (Chapter IV(4)(ii)).   The privileged position of SOEs (e.g. in their 
access to bank lending) has also contributed to ove r-investment and overcapacity in the economy.   
                                                      
10 Data provided by the Chinese authorities. WT/TPR/S/264/Rev.1 Trade Policy Review 
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  (3) DEVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  
15. China has become the world's second largest exporter and third largest importer of goods 
(excluding intra-EU trade) (Chart I.1).11  Its merchandise exports contracted more sharply than its 
imports in 2009, and exports recovered less quickly  than imports in 2010 and 2011, with the result 
that China's net trade surplus h as continued its declining trend and stood at 3.3% of GDP in 2011 
(based on China's balance of payments statistics).   
EU27
14.9
Japan
5.7Hong Kong, China
3.2China
13.3
Korea, Rep. of
3.9United States
10.3Chart I.1
World merchandise trade, 2011
Source:   WTO press release,  PRESS /658, 12 April 2012.Importers
Total:  US$14,320 billion Total:  US $14,485 b illionPer cent
Other
39.0
Hong Kong, China
3.5Other
36.9
Korea, Rep. of
3.6United States
15.6Japan
5.9China
12.0EU27
16.2Exporters
Singapore  2.9
Canada   3.2
Russian Federation  
3.6Canada   3.2India   3.1
Note :       Figures exclude intra-EU27 trade.
 
 
16. In 2011, manufactured products remained the dominant component of China's exports 
(Table AI.1).  Of manufactured products, offi ce machines and telecommunication equipment and 
textiles and clothing were its main exports (Chart  I.2).  Exports under "processing trade" (under which 
enterprises import inputs, assemble them in bond ed areas, and export the assembled products) 
accounted for about 44% of total trade.  Processi ng trade recovered in 2010 after a fall in 2009, 
reflecting the difficulties of foreign invested enterpri ses (FIEs) after the outbreak of the global crisis 
in 2008.    
17. In 2011, imports under processing trade accounted  for 26.9% of China's total merchandise 
imports (down from 32.1% in 2009) (Table AI.2).  China's main merchandise imports include office 
machines and telecommunication equipment, fuels, and chemicals (Table AI.3).   
                                                      
11 China was also the world's second  largest exporter and third largest importer of goods and services 
(excluding intra-EU trade) in 2011. China WT/TPR/S/264/Rev.1 
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  Chart I.2
Product composition of merchandise trade, 2009 and 2011
2009 2011
(a)    Exports (f.o.b.)
Other consumer 
goods
15.9
Manufactures
93.6
Total:   US$1,201.6 billion Total:  US$1,898.6 billion  
(b)    Imports (c.i.f.)
Chemicals
11.1Manufactures
67.1Other mining
12.6Fuels
12.3Other
2.8
Other 
semi-manufactures
4.3Chemicals
10.4Manufactures
59.2
Total:   US$1,005.6 billion Total:   US$1,743.5 billion Per cent
Manufactures
93.3
Office machines & 
telecommunication equipment
26.2
Other consumer goods  
8..4Other
0.3Mining
3.1
Office machines & 
telecommunication equipment
28.8Textiles 
5.0Other
0.1
Other semi-
manuf. 
10.6Agriculture
3.4
Source :  UNSD, Comtrade database (SITC Rev.3), an d General Administration of Customs (2011), China's 
Customs Statistics: Monthly Exports & Imports, 12, Series No. 268.Other consumer goods
9.9
Mining
29.6Other consumer goods
16.0
Clothing   
8.1Other semi-manuf.
9.4
Other semi-manufactures
5.5Mining
2.9Agriculture
3.4
Agriculture
8.3Agriculture
7.6
Mining
24.9Clothing
8.9
Textiles
5.0Chemicals 
5.2Chemicals
6.0Other 
0.1
Other mining
13.8Fuels
15.8Transport 
equipment
5.4
Other electrical 
machines
7.7Non-electrical 
machinery
7.5Non-electrical 
machinery
7.3
Non-electrical 
machinery
8.1Non-electrical 
machinery
7.9Office machines & 
telecommunication 
equipment
21.3Office machines & 
telecommunication 
equipment
17.5Other electrical 
machines
6.1Other electrical 
machines
5.1Other electrical 
machines
7.7
Transport 
equipment
5.6Transport 
equipment
5.2Transport 
equipment
6.3
 WT/TPR/S/264/Rev.1 Trade Policy Review 
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  Chart I.3
Direction of merchandise trade, 2009 and 2011
2009 2011
(a)    Exports (f.o.b.)
Other Asia  
14.0Asia
43.0
Total:   US$1,201.6 billion Total:  US$1,898.6 billion
(b)    Imports (c.i.f.)
Free Zones
8.6Other Asia  
10.3EU27
12.7CIS 3.1
United States
7.7EU27
12.1CIS 3.8Africa
5.3
Australia
4.7
United States
7.0
Total:   US$1,005.6 billion Total:   US$1,743.5 billionPer cent
Asia
43.5
Other Asia  
14.5Middle East
4.2Japan
8.1
Middle East
7.7Korea, Rep. of
9.3Korea, Rep. of
10.2United States
18.4Other Europe 
1.4
Other Asia  
10.6United States
17.1
Japan
11.2EU27
18.8Middle East
4.3
Asia
46.6Asia
49.2Japan
13.0
Free Zones
7.0Hong Kong, China
14.1
EU27
19.7Hong Kong, China
13.8Japan
7.8
Other America
7.8
Malaysia
3.6Chinese Taipei
7.2Chinese Taipei
8.5
America
15.3Other America
6.2Korea, Rep. of
4.4 Korea, Rep. of   
4.5
Other America
4.8Other America
5.1Middle East
5.6
Australia
3.9CIS  3.2
Other Europe
1.3Africa  
4.0
CIS  3.5Africa 
3.9
Other Europe
1.2Other Europe
2.0Africa
4.3
Malaysia 
3.2India
2.5India
2.7
Source :  UNSD, Comtrade database (SITC Rev.3), a nd General Administration of Customs (2011), China's
Customs Statistics: Monthly Exports & Imports, 12, Series No. 268.Brazil
2.8Europe
13.9Europe
20.1
America
24.9Europe
21.0
America
24.6
Brazil
3.0America
15.2Europe
14.1
Other   
0.3
 China WT/TPR/S/264/Rev.1 
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  18. In 2011, the main destinations for China' s merchandise exports remained the EU, the 
United States, Hong Kong SAR, and Japan (uncha nged since 2009) (Chart I.3), as well as ASEAN 
countries (Table AI.4).  The main sources of its imports were Japan, the EU, the Republic of Korea, Chinese Taipei, and the United States, as well as ASEAN countries (unchanged since 2009) 
(Table AI.5).   
19. Over the past five years, China's net merc handise trade surplus (exports minus imports) has 
fallen significantly as a share of GDP;  it fell from 9% in 2007 to 3.3% in 2011 (Table I.1). 
20. Nevertheless, frictions remain with some of Ch ina's main trading partners over the levels of 
their bilateral trade balances with  China.  When measured by traditional trade statistics, which 
attribute the entire commercial value of an exported good to the last country of origin in the global 
supply chain, China continues to have particularly  large bilateral trade deficits with some Asian 
economies, notably Chinese Taipei, Korea, and Japan, from which it imports components for its 
export processing activities, and large bilateral trad e surpluses with the United States and the EU, to 
which it exports final products.   
21. Those bilateral surpluses are significantly smaller when measured net of the imported 
components used in China's exports.  This gives a better measure of the le vel of domestic economic 
activity in China that is actually supported by its  much vaunted success as an exporting nation.  One 
study has estimated that, for 2008, the average import content of China's total production was 37% (Table I.3).  The implication of this is that, afte r adjusting to net out this import content, China's 
bilateral trade surplus with the United States w ould have been recorded in 2008 at US$225 billion 
rather than the US$285 billion shown in traditional trade statistics, a reduction of 21%.  When 
additional adjustments were made to the data to capture the very high import content of output from 
China's export processing zones (56%), thereby attr ibuting to China only th e domestic value added 
incorporated in its exports, the bilateral trade surp lus recorded with the Unite d States would have been 
reduced even further, by 40%, to US$165 billion (Table I.4).   
Table I.3 
Import content of Chinese exports, 2008 
(US$ billion and %) 
 Exports Imports 
Total  1,429 1,133 
Processing and assembling 111 90 
Processing with imported materials 565 288 
Total processing trade 676 378 
Total non-processing trade 753 755 
Import content of Chinese exports: 
1. From processing zones = 56% 
2. From non-processing zones = 19.7% 
3. Weighted average of processi ng and non-processing zones = 37% 
 
Source : Degain, C. and A. Maurer, (2010), Globalization and trade flows: what you see is not what you get! , 
WTO Working Papers, ERSD-2010-12. 
22. In other words, in 2008, exports from China to the United States were valued by traditional 
trade statistics at US$356 billion.  However, only US $224 billion of that total represented value added 
generated within the Chinese economy – the remain ing US$132 billion originated in other countries 
that were supplying imported components to China, which ended up in final goods sold in the U.S. 
market. WT/TPR/S/264/Rev.1 Trade Policy Review 
Page 10 
  
  23. In 2011, services comprised 8.8% of China's total exports (merchandise and services) and 
12.5% of its imports.12  China's exports of travel increased by 5.9% and transportation by 4.1% in 
2011.  Imports of transportation increase d by 27.0% and travel by 32.2%. 
Table I.4 
US-China trade balance, 2008 - adjust ed for China's processing trade 
(US$ billion and %) 
 Not adjusted Adjusteda 
 2008b 2008b 
U.S. exports to China (traditional statistics) 71 71 
U.S. share of domestic content in exports (%) 84 84 
U.S. exports to China (in value-added terms) 60 60 
U.S. imports from China (tra ditional statistics) 356 356 
China's share of domestic content in exports (%) 80 63 
U.S. imports from China (in value-added terms) 285 224 
Trade balance (traditional statistics) -285 -285 
Trade balance (in value-added terms) -225 -165 
Ratio trade balance (value added/traditional) (%) 79 58 
a To reflect high import intensity of  exports from processing zones. 
b Excluding the "construction" sector. 
 
Source : Degain, C. and A. Maurer (2010), Globalization and trade flows: what you see is not what you get! , WTO 
Working Papers, ERSD-2010-12. 
24. China remains one of the largest recipients of FDI in the world.  In 2010, it attracted 
US$105.7 billion of FDI, up 11.3% from 2009.  In 2009, FDI inflows fell by 12.3%.13   
25. China has become an important source of FDI.  In 2010, it ranked fifth in the world, with 
outward FDI of US$68 billion, up 20% from 2009.  The Government continu es to encourage Chinese 
companies to invest abroad, in energy, raw ma terials, agriculture, manufacturing, services, and 
infrastructure.14 
 
                                                      
12 WTO Secretariat calculation, based on SAFE onlin e information on balance of payments.  Viewed 
at:  http://www.safe.gov.cn/model_sa fe_en/tjsj_en/tjsj_list_en.jsp?ID= 30304000000 000000&id=4 (in Chinese) 
[05/12/11]. 
13 UNCTAD (2011). 
14 Xinhua net online information (in Chinese).  Viewed at:  http://news.xinhuanet.com/politics/ 
2012lh/2012-03/15/c_111660147.htm.