Trade Liberalization and Its Role in Chinese Economic Growth

Abstract

In terms of their participation in the international economy it would be difficult to envision two more contrasting cases than China and India. Whether the base line is the time of independence for India (1947) or the founding of the People’s Republic of China (1949), the beginning of Chinese economic reforms in the late 1970s or the initiation of Indian economic reforms in 1991, China’s trade performance has been distinctly superior. Even after a decade of economic reform, India’s share of global trade in 2000 was only 0.7 percent, two-thirds less than in 1948.2 By contrast, as shown in Table 7.1, China’s share of global trade by 2002 more than tripled in the past half century and is currently six times that of India.3 Most of the increase in China’s share of global trade has occurred in the 25 years since reform and opening began in 1978.