China does impose trade barriers, including tariffs, quotas, and other measures designed to restrict free trade. To get a sense of how China has trade barriers, let’s look specifically at the film industry. For years, Hollywood film producers have tried to get China to open its market for free trade regarding movies. As an expanding middle class enjoys the entertainment benefits of seeing movies in theaters, China has become the second biggest market in the world for movies after the US, with total box office grosses above $8.5 billion.
However, China imposes a quota system on US films and permits only thirty-four imported movies entry into its market annually. Moreover, even after Chinese regulators approve a US film for distribution, there is often little advance time given to the studio for marketing.
Marketing is a key part of any film release because it allows studios to let people know what the film is about and try to build awareness and interest. One example is of Deadpool 2, which had only a two-week slot between gaining authorization and debuting in China. As a result, there was little time to promote the film, and it under-performed in China.
Chinese regulators also impose restrictions on when a US film can open in China, making it difficult for Hollywood fare to play during peak holiday periods. For instance, the Chinese New Year is generally marked by frequent movie going among China’s population, but Hollywood producers generally cannot get opening slots for their films during this time.
China also places restrictions on the economic revenue share that Hollywood producers receive from theatrical release of Hollywood movies. This is estimated at about twenty-five percent, which is significantly below what studios receive in other international markets and domestically.
Trade barriers are defined as restrictions on trade that are imposed by governments, as opposed to naturally-occurring obstacles such as geography, culture, and free market conditions. However, in assessing trade barriers, one major issue is trying to determine what conditions arise naturally and what conditions are the result of specific government interventions. While most economists agree that China does have trade barriers, the question is still a complex one.
One issue in the ongoing debate about trade between the United States and China has been the valuation of the yuan. The United States has argued that China is a currency manipulator that has intervened to hold the yuan exchange rate artificially low with respect to the dollar—something that gives Chinese exports to the United States a competitive advantage and makes United States goods expensive when sold in China. Economists note that while the value of the yuan is subject to strong central government control, that is not the only factor affecting the two currencies.
It is difficult for foreign companies to do business in China on a level footing with domestic ones. Regulations and treatment of intellectual property both act as de facto trade barriers, creating difficult environments for foreign companies and often forcing them to partner with local businesses or share intellectual property. On the other hand, the conditions of the Chinese market make it difficult for some international companies to compete, and it is sometimes hard to separate failures due to poor understanding of the Chinese markets and robust local competition from the effects of trade barriers.
The presence of state-owned enterprises and government subsidies are also major issues in giving unfair competitive advantage to Chinese companies.
Historically, China has often been more protectionist than other major trading nations. Moreover, as the Sino-American trade war intensified in 2018–2020, the number of Chinese trade barriers has increased. The trade conflict between the world's two largest economies has impaired global economic growth.
President Donald Trump's approach to the trade deficit with China has not worked. His policy has been both unilateral and confrontational. In fact, the best way to address the inequities of Chinese trading practices is to work in harmony with other nations. A multilateral approach—perhaps through the World Trade Organization—is much more likely to be effective. The Trump administration has not tried this approach, though. In fact, Trump has accused almost all of America's trading partners of unfair trade while focusing on China.
America's farmers have been especially hard hit by China's new trade barriers. The US government has spent billions aiding American farmers. However, even if the trade war with China ends, Chinese markets are not likely to open up again. China has found other nations to supply its need for agricultural products.
China has lowered its trade barriers with other nations amid the trade dispute with Washington. Because of this, consumers in other nations are able to buy cheaper, Chinese-made products. American consumers, on the other hand, have to pay quite a bit more for goods made in China. In fact, American consumers are the biggest losers in the trade war with China.
China makes use of non-tariff trade barriers to restrict the number of imports coming into the country. As China is a part of the World Trade Organization, it would be difficult for it to use only blatant tax-based trade barriers. As such, China uses more indirect trade barriers to protect its domestic market. China used absolute quota restrictions on some of the products that it imports in which it assigns a numerical restriction of the imported product per year. If the imported product reaches this set number before the year is over, China will still not allow for continued importing of that product. China also uses tariff-rate quotas in which imported products have higher tariffs placed upon them once they reach a certain number imported.
China is a member of the World Trade Organization. As such, it is supposed to be doing away with trade barriers. China became a member of the WTO in 2001 and has been reducing its trade barriers. However, many people continue to complain that China continues to restrict trade.
For the most part, China does not have tariffs or quotas or really overt trade barriers like that. However, it does continue to engage in practices that have the effect of limiting imports from other countries. China's government imposes policies that are not exactly trade barriers, but which make it difficult for companies from other countries to compete in China. Go here for a US government report on such policies.