China‘s trade ascendancy and presence are not a distant phenomenon. In manufacturing trade, China is now a large supplier to all the major markets, and its presence has grown significantly over the course of the Doha Round negotiations. We identify the world‘s ten largest traders and for each of them also identify the largest sources of supply in the manufacturing sector. Figure 1 presents the results. China‘s share in the major import markets has doubled between 2001 and 2009, and in some of the most important world markets, China now accounts for more than a fifth of total manufacturing imports. China‘s share of manufacturing imports in Japan is 35 percent, in the European Union about 30 percent, and in the United States slightly over 25 percent.
Furthermore, China looms especially large in the markets of major trading partners in sectors where protection is greatest.
To illustrate this, we identify for each of the top ten trading partners, the ten most protected sectors (defined at the Harmonized Schedule (HS) 2-digit level of aggregation in 2009 in terms of the MFN tariff alone). Figure 2 depicts China‘s share in these sectors in the largest ten traders for 2001 and 2009.
Two points are worth highlighting. First, in the most protected sectors, China‘s share of imports in 2009 is substantially greater than for overall imports (shown in Figure 1) and dwarfs that of any other supplier in each of these markets.3 For example, China‘s share in these sectors in Japan is over 70 percent, in Korea over 60 percent, in Brazil about 55 percent, in the United States, Canada, and the European Union about 50 percent each. Second, even in these protected sectors, China‘s share has increased dramatically over the course of the Doha Round. In many of the importing countries (e.g., Brazil, the European Union, and the United States), China‘s share has more than doubled.
Also striking is how much market share China has gained even in countries such as Canada, Mexico, and Turkey that have free trade agreements with close and large neighbors. Thus, liberalization under the Doha agenda today, especially in the politically charged, high-tariff sectors, is increasingly about other countries opening their markets to Chinese exports. In short, with some exaggeration one might say that the MFN tariff of countries is really a China tariff, or the China tariff is really the ―least-favored-nation‖ tariff.
World Bank.Author Mattoo, Aaditya; Subramanian, Arvind;Document Date.2011/12/01 Document Type.Policy Research Working Paper.Report Number WPS5897.Volume No 1 of 1