682 { China’s Quest
overseas demands for agricultural exports contributed to the acceler-
ation of a trend toward commercial farming that predated the [1842
opening] ... The penetration of foreign goods created opportunities
for introducing new products, materials, and processes into China’s
economy. Innovations in money and finance and in transport and com-
munication magnified the impact of external trade on domestic eco-
nomic life. Measures initially intended to smooth the path of foreign
trade gradually came to affect large segments of China’s economy. The
impact of reduced transport costs, improved access to credit, popular-
ization of banknotes, and expanded information flows was not limited
to localities with long histories of active involvement in long-distance
trade, but extended to communities that had formerly remained outside
the ambit of regional and national markets.^13
Mao and the CCP’s Marxist-Leninist ideology viewed China’s trade with
the West as a form of exploitation and imperialist domination. During the
Mao decades, China’s foreign trade withered. As noted in the earlier chapter
on China’s opening, trade began to revive and then grew rapidly in tandem
with the opening and marketization of China’s economy. Perhaps the best
measure of China’s growing prowess as a global exporter is the value of China’s
exports as a percentage of global merchandise trade compared to those of
other major exporters. In 1978, the PRC accounted for considerably less than
1 percent of global trade. The United States then accounted for 12.5 percent
and Japan 6.7 percent of global trade. Within thirty years, China’s share had
risen to 8.9 percent compared to the United States’ 11.6 percent and Japan’s
4.6 percent. If Hong Kong’s trade is added to China’s (Beijing is sovereign
over Hong Kong in spite of the fact that Hong Kong is a separate customs ter-
ritory), China’s share rises to 11.56, virtually identical with the United States.
China’s rise as a leading trade power has been very impressive. Figure 25-3
shows the total value of exports of China and other leading export powers.
In terms of China’s export growth, there have been two inflection points
since 1978, illustrated in Figure 25-3: the “second opening” launched by Deng
Xiaoping in 1992, and entry into the WTO in late 2001. China has emerged
within a period of twenty years as a leading exporter, second only to the
United States in 2011, according to World Bank statistics. In 2004, China sur-
passed Japan as an exporter and in 2010 it surpassed Germany. By 2011, the
United States still ranked as the world’s leading exporter, according to World
Bank data bank indicators, but China was closing rapidly and will almost
certainly soon surpass it.
The PRC’s discovery of the efficacious role of export promotion took place
in a distinctive East Asian context and cannot be adequately understood out-
side that context. As far back as the 1870s, Japan, a small, resource-poor coun-
try, pioneered a model of state encouragement of exports as a way of paying