ABSTRACT
For China, unquestionably, the US and Japan are the most important trading partners besides Hong Kong, and their importance is increasing especially for the recent years. Before China started liberalizing its economy, Hong Kong played the important role as a middleman between China and the rest of the world (see Fung and Iizaka, 1998); in 1992, Hong Kong was China’s biggest trading partner in both exports and imports (in terms of traded values; see Table 1). In recent years, with its economic liberalization efforts, China started trading more directly with the rest of the world while Hong Kong’s role as a middleman has dwindled. Nonetheless, if we assume the indirect trade that flows via Hong Kong to China is proportional to the direct trade flows to China, we could say that the US and Japan have been the two largest trading partners in both exports and imports during the last decade. Between 1992 and 2000, China’s imports from Japan tripled from $13.7 billion to $41.5 billion while the imports from the US more than doubled from $8.9 billion to $22.4 billion (Table 1). During the same period, China’s exports to Japan increased almost four-fold from $11.7 billion to $41.6 billion, and its exports to the US rose more than six-fold from $8.6 billion to $52.1 billion.
