Foreign Trade Policy and Apparatus of the People's Republic of China

Abstract

As an aftermath of the Opium War of 1840-1842 and the subsequent military and diplomatic setbacks at the hand of foreign powers, China was forced to open its doors to foreign traders on terms calculated to give every possible advantage to those traders at the expense of China's domestic economy and industry. Under treaties imposed upon China, foreign traders were permitted to navigate Chinese inland waters without restriction and to operate factories, banks, insurance companies, and other commercial enterprises in China. These treaties allowed foreign powers to control such governmental functions as customs and postal services, and granted foreign nationals in China immunity from local jurisdiction. As a result of these treaties, all of China was open to foreign exploitation, making the development of domestic industry extremely difficult. For almost a century, China remained in this semi-colonial status, and its economy gradually but steadily deteriorated to the point of total collapse before the communist take-over in 1949. It was against this background that the foreign trade policy of the new regime was formulated. It is small wonder that the People's Republic of China has adopted a very stringent protective trade policy, and that it emphasizes the need for domestic industrialization and strict control of import and export activities. It is also easy to understand why contemporary China has not welcomed with open arms foreign traders who desire to operate within its territory.