CHINA'S FOREIGN ECONOMIC RELATIONS

Rapid growth was registered in foreign trade. Total value of imports and exports in 2002 reached US$620.8 billion, up 21.8% over the previous year. The value of exports was US$325.6 billion, up 22.3%, and that of imports was US$295.2 billion, up 7.8%; to EU countries US$48.2 billion, up 17.9%; to ASEAN members US$23.6 billion, up 28.3%; to the Republic of Korea US$ 15.5 billion, up 23.8%; to Taiwan Province US$6.6 billion, up 13%; and to Russia US$3.5 billion, up 29.9%.

Foreign direct investment increased steadily. In 2002, the contracted foreign capital through foreign direct investment stood at US$82.8 billion, up 19.6%. By the end of 2002, China had approved 424, 196 foreign-funded enterprises, with foreign contracted investment reaching US$828.06 billion and foreign capital actually utilised totaling US$447.97 billion.

Foreign economic and technical cooperation maintained good momentum. In 2002, the accomplished business revenue through contracted projects and labour contracts was US$14.4 billion, up 18.2%. the value involved in the new contracts signed was US$17.9 billion, up 8.7%.

Customs tariff were reduced but revenue increased in 2002. Revenue from tariffs has always been an important source of China's central finance, accounting for about one-third of the central finance. The year 2002 was the first year after China's WTO entry and to fulfill its commitment for tariff concessions pledged for the year 2002, the Chinese Government adjusted tariff rates beginning from January 1. The rates for 5,332 taxable items commodities were reduced at varying degrees and as a result, China's general tariff level dropped from 15.3% to 12%. However, thanks to the favourable situation in foreign trade, the state treasury took in a total of 259 billion yuan in tariffs and import-related duties, a new high.

Strenuous efforts were made to crack down on smuggling. From 1998 to 2002, customs offices throughout the country seized 55, 755 smuggling cases with smuggled goods valued at 43.04 billion yuan. Large-scale smuggling, which had once been rampant in the country, was brought under effective control. After a customs anti-smuggling task force was initiated in 1999, 14,955 suspected smugglers were held for coercive measures and 7,791 of them were transferred to procurator organs.

China continued to manage 52 categories of bulk and sensitive goods by means of export licensing in 2003, including export quota license, export quota tender, paid use of export quota, free tender for export quota and export permit.

Table 1:      Imports and Exports in China in 2002

Table 2:      Imports and Exports by Major Categories