Regional Disparity in Trade in China

4.5 Regional Disparity in Trade in China

Although China’s external sector has been expanding rapidly after its accession to the WTO in 2001, the contribution of various regions of the country to the trade sector has been highly skewed. Several parts of the country have not closely integrated with the global economy, particularly the hinterlands. The trade-affluent regions in China are located in a ‘D’ shaped formation, covering the North, East and the Southern regions of the country. This part of the country has been the hub of all trade-related activities since the beginning of its reforms. This part of the region shared nearly 83-91 per cent of the country’s total trade activities and there was no change in the structure of trade activates within the provinces during the period 2003-12 (see Table 4.8).

Table 4.8 Regional Distribution of Trade in China 2003-2012

(Billion US$)

Share (%) SI No Regions

Trade

7.8 61.7 1.8 3.0 2 Central

1 Central

Export

5.8 44.0 1.4 2.1 3 East

Import

35 50.7 4 East

Export

42.2 35.8 5 North

Import

Export

6 North

17.5 22.1 7 North East

Import

19.7 78.4 4.5 3.8 8 North East

4.9 48.0 1.2 2.3 15 Total Exports

Import

100 16 Total Imports

Source: Report on the Foreign Trade Situation of China, various issues, Ministry of Commerce, China. Note: Share refers to proportion of exports/imports of the region in the total exports/imports of China.

On the other hand, a large area of China has very little exposure to foreign trade. The coverage of the ‘trade poor’ regions has been Central, North-eastern, North-western, and South-western regions of the country. These regions constitute around 7-10 per cent of country’s overall trade activities during the period 2003-12. The disparity among regions is such that trade activities in some provinces of trade affluent-regions are better than the entire ‘trade poor’ region of the country. Some of these provinces which are performing well over a couple of decades are Jiangsu, Shanghai, Beijing and Guangdong among others.

Most of the trade affluent-regions are not in the close vicinity of India. The regions that are close to India are North Western and South-Western which fall under the ‘trade poor’ region of China. In these regions, the trade activities are also skewed (Table 4.9).

Table 4.9: Distribution of Trade Activities in China Regions Close to India: 2003-2012

(US$ Billion )

Growth 199 Region

5- 2003- 2007-

7.0 0.77 0.34 8.9 30.3 1.4 8.0 0.20 0.44 15.4 57.5 1 Inner Mongolia

4.0 0.34 0.19 11.1 26.4 6.1 7.3 0.38 0.40 16.4 30.1 0.3 North East

26.46 40.31 22.3 38.2 -0.1 Shanghai

97.8 5.32 4.77 13.1 24 14.4 58.1 4.95 3.20 10.2 103.9 -4.3 Jiangxi

15.5 1.14 0.75 1.8 26.9 24.8 14.0 1.05 0.77 -1.6 36 1.6 Hainan

11.9 18.2 11.2 1.08 0.62 -0.2 11.1 2.5 South-West

29.9 53.6 14.6 0.92 0.80 -2.2 30.5 1.2 Guizhou

3.4 0.01 0.16 39.1 28 59.4 0.1 0.16 0.00 -19 14.8 -0.1 North-West

Source: Report on the Foreign Trade Situation of China, various issues, Ministry of Commerce, China.

In the North-West region, provinces like Shanxi and Xinjiang are better placed in terms of their trade activities in the region. Similarly, some of the provinces of the South-western region engaged in better trade activities are Chongqing, Sichuan and Yunan. These provinces are located in the hinterland and they have considerable potential for trade activities. Indian businessmen should focus on these provinces that are almost located in the close vicinity of India. The Chinese government has offered preferential treatment to investors in specific regions such as the Western and Southern regions of the country. Since these regions are not considered as global centres for business, Indian investors should explore the possibilities of business opportunities in these regions.