China & Trade: A Brief Overview

China is the world’s largest exporter and the second largest importer. The leading component of Chinese trade is manufactured products, comprising 94% of the total exports in 2015 and 64.4% of imports. The top Chinese export is computers (6.63% of total exports), and the top destinations for Chinese exports are the USA and the EU.

Total Chinese exports and imports have both been declining over the past 5 years. China has several bilateral trade agreements, including with Australia, South Korea and Pakistan. It is also a member of the ASEAN free trade area.

In 2015, the UK had a positive £2.2bn balance of trade in services, but this was greatly outweighed by a £23.9bn trade deficit in goods, leading to an overall negative balance of payments with China of £21.7bn.

The greatest UK imports of goods from China in 2016 were in the Machinery and Transport Equipment sector (mainly office machinery, telecoms equipment, and electrical machinery), and the Miscellaneous Manufactured Articles sector (with £4.1bn in imports of articles of apparel and clothing accessories). The greatest value of exports of UK goods destined for China in 2016 was road vehicles (£3.7bn).

The average MFN applied tariff on all goods in China is 9.9%, where agricultural goods have a much higher average tariff (15.5%) than non-agricultural (9%). The highest average tariff by product group within agricultural products is sugars and confectionary at 28.7%, and within non-agricultural products is clothing at 16%.