Why China is Still a Trading Nation

Trading Nation

Why China is Still a Trading Nation

A trading nation is simply a nation in which foreign trade constitutes a significant portion of its gross domestic product. In other words, a nation that heavily relies on foreign trade to provide its economy with the raw materials it needs to grow and maintain its high levels of development and prosperity. As such, the nations which specialize in foreign trade are usually quite wealthy and politically stable, as well. These nations have a stable money supply, interest rate policy, free trade zone, and a stable and realistic political system. They are also usually in good economic relations with all nations of their kind, as well as with the rest of the world.

However, not all trading nations are like this. There are nations like India, which export large amounts of goods to the United States but receive little in return, if any at all. Similarly, there are nations like Pakistan and China, which are not very reliable sources of global trade revenue, despite exporting huge amounts to the United States. It is for this reason that it is important for a nation to develop its own trading network, with which it can competently compete with the largest exporter in the world – the United States of America.

A large part of the Chinese exports consist of machinery and technology, much of which is highly outdated. For this reason, China has a serious problem with its over-production of certain types of goods – for example, China regularly sells nuclear weapons components to the United States without first having them tested or approved by the UN. For this reason, for the most part, the Chinese appreciate having the same relationship with other major exporters of goods, but must develop a system to ensure that the relationships do not damage their own trading system.