Since 1978, when the country began opening up, reforming policy, and experimenting with capitalism and market forces, the country's economy has boomed.

Overview

China’s growth has been driven by exports and heavy investment in infrastructure and manufacturing. In recent years, China has racked up a huge trade surplus with the rest of the world, particularly the United States and Europe, and has also accumulated over $1 trillion in foreign currency reserves.

Yet, China is one of the most important markets for U.S. exports. In 2009, U.S. exports to China totaled $69.6 billion. U.S. agricultural exports continue to play a major role in bilateral trade, totaling $12.2 billion in 2009 and thus making China the United States' fourth-largest agricultural export market.

Foreign Investment

China's investment climate has changed dramatically. Since the early 1990s, China has allowed foreign investors to manufacture and sell a wide range of goods on the domestic market, and authorized the establishment of wholly foreign-owned enterprises, now the preferred form of foreign direct investment (FDI).

However, the Chinese Government's emphasis on guiding FDI into manufacturing has led to market saturation in some industries, while leaving China's services sectors underdeveloped. China is now one of the leading FDI recipients in the world, receiving over $108 billion in 2008 according to the Chinese Ministry of Commerce.

Did you know?

• The U.S. trade deficit with China fell 15.4% in 2009 to $227 billion (primarily because Chinese imports were down 12%, to $296 billion).
• The United States is one of China's primary suppliers of power-generating equipment, aircraft and parts, computers and industrial machinery, raw materials, and chemical and agricultural products.
• Foreign-invested enterprises produce about half of China's exports.
• China's outbound foreign direct investment has surged in recent years, reaching $52 billion in 2008.

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