CHINA.ACTION.MONEY.
The Past Shaping
Today’s Intercontinental
Trade with China
PACIFIC TYCOON
The Past Shaping Today’s Intercontinental
Trade with China
China is the most densely populated country on the
planet and boasts the second largest economy in the
world. Since the economic and political reforms in 1978,
the country’s industry has gone from strength to strength,
positioning China as an internationally recognised global
powerhouse of trade and infrastructure. The country is
home to one of the oldest and most advanced civilisations
on earth and has been at the epicentre of international
trade for thousands of years.
In 2014, the Dragon Economy poses stiff competition to
the world’s most dominant economic force, the USA, as
the nation continues to progress and expand its historical
trade routes throughout Asia and around the globe. Two
economies to have recently enhanced trade with China
are the EU and India. In this edition of China. Action.
Money., we will take a retrospective look at the historical
origins of trade, both within Asia and throughout Europe,
and explore how the genesis of those routes formed
the foundations of China’s continuing intercontinental
expansion.
Internal Asian Trade - India
One of the earliest trade routes in the world originated in
Chang’an, China (now Xian). From the second century
BC to the fourteenth century AD, the route stretched from
the East and linked to the Mediterranean in the west,
transporting goods to the Roman Empire. As silk was
the predominant product to be transported along the
path, this route was named the Silk Road by German
geographer, Ferdinand von Richthofen, in 1877. The
route was not only responsible for physical trade but
also served as an avenue for China to share culture and
traditions with the nations that lined the Silk Road. One of
the countries linked to China via the Silk Road was India,
and from 25 to 220 AD, the transportation of paper and
porcelain between the two countries also supplemented
religious influence from northwest India as Buddhism
became more widespread.
From trade partners of the past to the present day,
India and China have continued to cement their
trading relationship throughout the centuries, with 2014
marking the year that China became India’s leading
trading partner – overtaking the UAE in March. A study
conducted by PHD Chamber of Commerce reported
that trade between the two economies reached $49.5
billion in 2014, accounting for an 8.7% share of India’s
total trade. This demonstrates a significant improvement
when compared to a decade earlier. In 2004, India-China
exports and imports totalled only $7 billion.
In September 2014, as part of the Chinese commitment
to ensuring continent-wide prosperity throughout Asia,
the nation’s president Xi Jinping announced that the
Dragon Economy is to invest billions of dollars into
Indian infrastructure throughout the next five years.
The announcement, which came amid a visit to Delhi,
earmarked railways, industrial parks and, potentially,
nuclear power as the industries and sectors to receive
the financing. By committing $20 billion into Indian
infrastructure, China intends to bring the nation’s railways
up to date and improve the efficiency of trade between
the two.
External Asian Trade – Europe
As September drew to a close, it was revealed in The
Parliament Magazine that EU-China trade now amounts
to over €1 billion a day. Chinese-European trade also
dated back centuries, with the spice industry transforming
the transportation of goods between Asia and Europe
in the 15th century. This channel successfully boosted
commercial and cultural exchanges, and in doing so
helped to lift the global economy from the middle ages
into the beginnings of modern civilisation as we know it.
The ancient Silk Road avenues helped to shape modern
trade and has now influenced a new contemporary
version of the channel which is intended to operate
across land and sea and interconnect Asia and central
Europe more effectively, positioning China at the helm of
the continued trade expansion.
Although Chinese investment into the EU amounts to
around 6% of the country’s cross-border investment levels
and China only receives around 2.1% of foreign direct
investment (FDI) from the union, it has become one of
the continent’s largest sources of imports. Furthermore,
the EU and China’s goals are significantly aligning, as
trade flows increase and China continues its pursuit
of new commercial paths and international investment
opportunities.
Conclusion
These phenomena have underlined China’s deeprooted dominance in international trade and highlight
the country’s ever-growing presence as a leading global
economy. The continued investment into international
infrastructure will not only improve trade and import
and export traffic between China and its international
partners, but will also expand the Dragon Economy’s
already rich trading history.
For China, its history of building trade routes and cooperating with distant countries around the world is
paying dividends today. China is perhaps the most
important economy for guaranteeing world trade and
driving forward global prosperity.
In the past, present and future, China is the leading light
in world trade.
Pacific Tycoon’s head office is based in Hong Kong, at the heart of the booming
East Asian economy. Benefiting from our proximity to the industrial and businessled projects transforming China, we endeavour to monitor and understand each
one closely. For further details on the trillion dollar projects shown on this map, visit
our website: www.pacifictycoon.com
Beijing South Railway Station
Jiuquan Wind Farm
Ningdong Energy and
Chemical Industrial
Base
South to North Water
Diversion Project
Shanghai-Hangzhou
Maglev Project
Hangzhou Bay
Bridge
Beijing-Shanghai High Speed Railway
Kumming New International Airport
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