Introduction

Since economic reform began in 1978 China has emerged as a major trading nation and foreign trade has begun to exert a greater influence on the domestic economy than at any other period in China's history. Its enhanced role in the world economy is evident both in China's participation in international economic organizations and its volume and pattern of trade. In the early 1980s China joined both the World Bank and the International Monetary Fund. In the mid-1980s China became a member of the Asian Development Bank and initiated the process of becoming what is called a contracting party of the General Agreement on Tariffs and Trade.

Over the same years China's trade volume expanded dramatically. In 1978, on the eve of reform, China was the world's thirty-second ranked exporting country. By 1989 it was the world's thirteenth largest trading nation. In the process its share of world trade almost doubled. Moreover, more than 90 percent of China's trade was with market economies. In both its rapid trade growth and its orientation toward market economies, China poses a sharp contrast with the Soviet Union and the states of Eastern Europe. Despite their reforms, some of which significantly predate those of China, none of these states have become more important participants in the world economy. The foreign trade of the Soviet Union and the countries of Eastern Europe remains heavily skewed toward trade with one another and none of these states increased its hard currency exports substantially in the 1980s.