ABSTRACT
Since China opened its door to the world in 1978, it has not only been the world’s fastest growing economy, but also an outstanding exporter and a recipient of substantial sums of foreign direct investment (FDI) – it has emerged as a world “workshop.” Its imports and exports have grown at a hefty annual rate of 14.73 percent and 15.72 percent respectively from 1978 to 2003: imports increased from US$10.9 billion to US$412.8 billion, and exports from US$9.8 billion to US$438.4 billion. Its trade balance with the world turned into surplus in 1990 and peaked at US$43.5 billion in 1998. Trade accounts for a fairly large share in its economy and has become an important engine for China’s continuous economic growth. Inflows of FDI have also increased at an impressive annual growth rate of 21 percent from 1983 to 2003, making China the largest FDI recipient among developing countries, with US$53.5 billion in 2003. Table 4.1a highlights China’s trade and its shares in GDP for selected years since 1978 and Table 4.1b presents its FDI inflows and their shares in fixed capital formation and GDP for selected years since 1979.
