China, post-Mao, is dramatically engaged with the world economy. Export growth has exploded by a massive 500 percent since 1980. China now trusts in exports as the engine of growth and the safety net for a domestic restructuring which has created high levels of urban unemployment. China has suffered intense international criticism for failing to liberalise trade. Prices of land, labour and key industrial inputs such as energy and steel are still largely set by the state.
Import tariffs remain among the highest in the world.
China has played off foreign companies and forced them to sign agreements to export a fixed proportion of production - 70 percent in the case of Sony. The regional implications of China s economic strategy are profound. By copying their policies, China has undermined the economies of its Asian neighbours. In many ways the 1997 East Asian economic meltdown represented a belated response to the 1994 currency devaluation which made Chinese exports more competitive. Hopes that Chinese suppliers would supply foreign companies have been dashed.