With a yearly foreign trade volume of over US$I.I trillion in zoo4, China has replaced Japan as the third largest trading nation in the world, and stands second only to the United States and Germany. This is an average annual increase of over 30 percent since 1978,when China's trade volume was barely US$20.6 billion, ranking 32nd in the world. It also reflects a changing environment, where the post-WTO Chinais surfing on a more open economic platform. The flow of foreign direct investment (FDI) to the Chinese mainland increased by nearly 13 per cent to US$60.6 billion in 2004,