China’s foreign trade is composed of three parts, namely technological trade, service trade and commodity trade.

Section I:  Technological Trade

China signed 9,902 contracts to import technology in 2005, resulting in an increase of 15.1% over the previous year, with contractual funds amounting to 19.05 billion US dollars, up 3.01%. Of this, 11.83 billion US dollars comprised technology fees, accounting for 62.1% of the total contractual funds. Both contract volume and contract values hit a record high.

As follows are the features of imported technology in 2005:

1. Importation of technology maintained a rapidly growing trend. Both contract volume and contract values increased sharply over the previous year. Contract volume registered a surge of 15.1% year on year, while contract values increased 37.5%.

2. Importation of technology was conducted mainly in the form of proprietary technology, which accounted for 28.0% of the total. Complete sets of equipment, key equipment and production lines made up 26.7% of the total. Technical consulting and technical services accounted for 24.9% of the total. All the three aspects above accounted for a combined 79.6% of the total.

 

Statistics on technology import in 2005 by import forms

(Unit: 1,000 US dollars)

3. Sources of technological imports became more diversified. China imported technology from 68 countries and regions in 2005. The EU, Japan, and US remained the major sources of China’s technological imports.

EU was the top source of China’s technological imports in 2005. China signed contracts to import technology valued at a total 9.07 billion US dollars in 2005, an increase of 64.5% over the previous year, accounting for 47.6% of the total contractual funds. Technological imports from the EU exceeded the value of contracts China signed with Japan and the US. Of this, 5 billion US dollars of imports were made from Germany, up 127.8% over 2004, accounting for 55.1% of the total contract value from the EU. Germany replaced Japan and the US for the second time as the top source of China’s technological imports. China imported technology valued at 3.85 billion US dollars from Japan, up 31.4%, ranking Japan as China's second largest trading partner. From the US, China imported technology valued at 3.4 billion US dollars, up 16%, ranking the US as China's third largest trading partner.

 

Top ten sources (EU, ASEAN) participating in China’s technological imports in 2005

(Unit: 1,000 US dollars)

Most EU countries exported technology to China. If EU member countries were separately listed in the table above, there would be five EU member countries among the top ten countries and regions. Among EU member countries, Germany, France, and Italy held the top three ranks in terms of total value of technological imports made by China from EU, accounting for 55.1%, 14.9%, and 6.1% respectively.

 

Top ten countries and regions participating in China’s technological imports in 2005

(Unit: 1,000 US dollars)