Over the past 75 years, China has transformed from a closed, centrally planned economy into a global economic powerhouse. This remarkable journey has reshaped international trade patterns and significantly impacted the global economic landscape, as per a report by KASB.
WTO Accession and Trade Growth
China’s accession to the World Trade Organization (WTO) in 2001 marked a pivotal moment in its integration into the global economy. Since joining the WTO, China’s trade volume has skyrocketed:
• In 2001, China’s total goods trade amounted to around $510 billion. By 2022, this figure had increased to over $6.3 trillion, a more than 12-fold increase.
• China became the world’s largest exporter in 2009, surpassing Germany. As of 2023, China’s exports reached $3.38 trillion, representing 14.2% of the global market.
Belt and Road Initiative (BRI)
Launched in 2013, the Belt and Road Initiative has become a cornerstone of China’s international economic strategy:
• By 2022, China had signed 200 cooperation agreements with 140 countries and regions. These countries account for around 40% of global GDP and span 65% of the world’s population.
• In 2022, China’s trade with BRI countries surpassed $2.07 trillion, a 20% year-on-year increase.
• Since its launch, China’s cumulative trade with participating countries has grown by 9% annually.
Yuan Internationalization
China has made significant strides in internationalizing its currency, the yuan (RMB):
• In 2016, the IMF added the yuan to its Special Drawing Rights (SDR) basket of currencies.
• As of 2023, approximately 4.5% of global trade was settled in yuan, up from less than 1% in 2010.
• The yuan is now the 5th most used currency for global payments, according to SWIFT.
• By September 2023, the yuan’s share in global trade finance increased to 5.8%, surpassing the euro.
Free Trade Agreements
China has actively pursued free trade agreements to expand its economic partnerships:
• As of 2023, China has signed 20 free trade agreements with 26 countries and regions.
• Notable agreements include RCEP (Regional Comprehensive Economic Partnership), which came into effect in 2022 and is the world’s largest free trade agreement.
• In 2022, China’s trade with RCEP members reached $1.5 trillion, accounting for about 30% of China’s total foreign trade.
Global Investment
China has become a major player in global investment:
• By 2022, China was the second-largest source of foreign direct investment (FDI) outflows globally.
• Chinese outward FDI stock reached $2.7 trillion by the end of 2022.
• The country launched initiatives like the Asian Infrastructure Investment Bank (AIIB) in 2016, which has committed more than $40 billion to various projects as of 2023.
