Trade plays a much smaller role in China's economy than it did a few decades ago

Global trade has never been a bigger slice of the world economy. However, China, the country that most people think of as the export giant, has seen a decline in its trade-to-GDP ratio in the last 15 years.

The chart shows China’s trade in goods and services as a share of its Gross Domestic Product (GDP). In 1970, it was just 5%. Following Deng Xiaoping's economic reforms, which opened China to market forces and international trade, this figure soared to 64% in 2006. But since then, it has fallen considerably, reaching 37% in 2023. China's exports have grown in dollar terms, but its economy has expanded even faster, making trade a shrinking share of the whole.

While the 2008 financial crisis disrupted global trade, China’s trajectory also reflects the increase in domestic demand for its production. For years, Chinese officials have advocated rebalancing the economy away from export dependence and toward one driven by domestic consumption. A rising middle class now buys more of what China produces, reducing its reliance on international markets.