China’s Preferential Trading Schemes for Developing Countries

Abstract

This literature review collates available evidence on China’s preferential trading schemes for developing countries. It draws on a diverse range of sources from multiple academic disciplines and grey literature. The review focuses explicitly on that literature that discusses preferential trade agreements as a specific form of free trade agreements. The review acknowledges that impacts are multidimensional and multifaceted and will be reflected differently across sectors and countries making conclusions hard to reach. One of the most important elements of many countries trade policy since the turn of the century has been the rapid growth of various forms of Free Trade Agreements (FTAs). There are different definitions of PTAs, some include regional trade agreements as a form of PTA i.e. where a country gives preferential trade to your regional partners - this is not always true and WTO does not define RTAs as PTA. A preferential trade area established via a preferential trade agreement is a trading bloc that gives preferential access to certain products from participating countries. This is accomplished by reducing trade tariffs and is considered a first stage of economic integration.