China’s new government adopted the Common Program as a provisional constitutional framework. It endorsed a state-led approach to building the economy, which shaped how the state would control key sectors, including external trade. This set the starting conditions for centralized trade administration in the early PRC.
The PRC began creating national, state-owned foreign trade companies to manage imports and exports under centralized planning. This helped the government control scarce foreign exchange and channel trade toward industrial priorities. It marked an early institutional foundation for state-directed trade.
At the Third Plenum of the 11th CCP Central Committee, China formally shifted toward “reform and opening up.” The new direction supported greater engagement with the world economy and experimentation with market mechanisms. This created the political basis for later changes to trade controls and industrial policy tools.
China approved the first Special Economic Zones (SEZs), including Shenzhen, Zhuhai, Shantou, and Xiamen. SEZs offered more flexible rules and incentives to attract foreign investment and expand exports. They became testing grounds for opening policies while the wider economy remained more controlled.
China expanded its opening strategy by designating 14 coastal “open cities” to attract foreign capital, technology, and trade. This broadened the geography of export-oriented development beyond the original SEZs. It also reinforced the use of targeted, location-based incentives as a state industrial strategy.
China formally submitted an application to resume its status in the General Agreement on Tariffs and Trade (GATT), the WTO’s predecessor. The move signaled a long-term goal of joining global trade rules while negotiating how much domestic protection and state control to keep. The application began a multi-decade accession process.
China unified its dual exchange-rate system, aligning the official rate with the prevailing market-oriented swap rate. This reform simplified foreign-exchange management and strengthened incentives for export growth and foreign investment. It also increased the state’s ability to manage competitiveness through macroeconomic policy rather than quotas alone.
China adopted the Foreign Trade Law, providing a national legal framework for foreign trade operations. Over time, the law supported reforms that expanded who could engage in trading activities, while still allowing the state to use trade measures for policy goals. This helped shift trade governance from purely administrative control toward more rules-based management.
China issued guiding rules and a catalog that classified foreign investment into categories such as encouraged, restricted, and prohibited. This became a key industrial policy tool: it could steer foreign capital toward favored sectors while limiting entry in sensitive or protected industries. The catalog approach institutionalized “selective opening.”
China became a WTO member after years of negotiations, committing to reduce many trade barriers and open parts of its market. WTO entry increased external pressure for transparency and rule-based trade, but did not end China’s use of industrial policy tools. The new framework reshaped how protection could be pursued—more through standards, investment rules, and state support than simple border restrictions.
China announced a renminbi revaluation and an exchange-rate reform, moving away from a strict U.S. dollar peg toward a managed system referencing a basket of currencies. This change aimed to improve monetary flexibility amid global pressure and rapid trade growth. Exchange-rate management remained an important tool affecting import and export conditions.
China issued a national medium- and long-term science and technology plan (2006–2020) that prioritized strengthening domestic innovation capacity and reducing dependence on foreign technology. The plan supported more active state coordination of R&D funding and industrial upgrading. It signaled a stronger link between technology policy and trade/industrial competitiveness goals.
China’s State Council issued Made in China 2025, a national strategy to upgrade manufacturing capabilities in prioritized sectors. The strategy reflected an industrial-policy approach focused on building stronger domestic supply chains, raising technology levels, and improving global competitiveness. It became a clear marker of contemporary state industrial protection and promotion leading into the post-2015 period.
China's Trade Controls and Industrial Protection since 1949 (1949–2015)