Introduction: A Framework for Analysis

China’s burgeoning presence in the global economy over the last two decades has been drawing attention from the world economic and political community. Indeed, according to almost every major indicator, China’s economy has expanded considerably since the initial reforms in 1978. The country’s real GNP growth rate is nearly 10 per cent annually. The overall standard of living has been on the rise, as demonstrated in the improvements in diets, clothing, housing, transportation and telecommunications, as well as in the greater access to modern consumer goods among both urban and rural residents. However, what impresses the world more is the rapid advance in China’s foreign trade. Since 1978, the level of foreign trade has climbed more quickly than has GNP. This has led to a jump by a factor of three in China’s share in international merchandise trade. China appears to have become an important player in the world market.