Export Promotion Policies and Economic Development of China

The government of China has tried to promote exports by various means including the establishment of Special Economic Zones, tax and financial benefits, duty drawback, export insurances, and exchange rate management. Of particular interest is that exports by foreign invested enterprises have increased substantially since the 1990s and have significantly contributed to the rapid economic growth. As China became a Member of the WTO, China has recently tried to make its export promotion policies consistent with the WTO regulations. The export promotion measures permitted in the WTO system such as the duty drawback and export insurance schemes may show resource allocational inefficiencies. It would be necessary for the Chinese government to maintain efficiently run export-promoting systems.