In recent years, the Tibet Autonomous Region has exploited the preferential treatment given by the Central Government to expand exports of industrial products, mainly handicrafts, and livestock products. The region's import and export volume hit US$130.29 million in 2000. While the State foreign trade companies gain ground in increased imports and exports, there is also development of border trade. At present, the autonomous region has opened 28 ports for border trade, with those on the Sino-Nepalese border enjoying the largest transaction value. Major border trade ports include Zham and Burang. The ports have also helped China's hinterland to expand trade with South Asia.

During the Ninth Five-Year Plan, Tibet achieved remarkable progress in border trade, with the volume of border trade adding up to US$228.73 million or 413 time that of the previous five-year plan (US$44.59 million). In 2000, the imports and exports Tibet made through border trade reached US$110 million, which was 18 time that of 1995 (US$5.79 million). Border trade volume has thus made up 78.44 percent of the total imports and exports Tibet made in the year, and Tibet's trade with Nepal accounted for over 95 percent of the total value of Tibet's border trade.

The government of the Tibet Autonomous Region welcomes foreign businesses to invest in such fields as energy, communications, architecture, light and textile industries, electrical machinery, commerce, food processing, aquatic breeding, processing, agriculture ,animal husbandry and tourism. They are allowed to set up Sino-foreign joint ventures or solely owned enterprises; or to conduct economic and technological cooperation. Foreign businesses are especially welcome to invest in long- or medium-range projects, and also in comprehensive development projects with good potential. The government of the Tibet Autonomous Region even supports individually and/or privately owned businesses to become involved in joint ventures or cooperative enterprises with foreign investors. They can also engage in processing with supplied materials, samples or parts, and compensation trade, while individuals living in the border areas can engage in border trade. Foreign-funded enterprises, set up with the approval of government departments of the Tibet Autonomous Region, are all entitled to the preferential policies developed by the State and the regional government.

Thus far, some 50 foreign-funded enterprises have set up in the region with approval from the government of the Tibet Autonomous Region, including 19 established in 1999. The investment involved amounts to 1.02 billion Yuan and US$20 million. The investors came from the United States, Japan, Germany, Malaysia, Nepal, Macao, Hong Kong and elsewhere.

Some international organizations have started economic cooperation with the Tibet Autonomous Region, and undertaken projects with international aid. For example, the UN Development Program (UNDP) has, since 1981, provided US$4 million in aid to boost construction of the Yangbajain Geothermal Power Station. The UN World Food Program (UNWFP) aided drought-relief and irrigation projects for the comprehensive development of agriculture in the four counties (district) in the Lhasa River Valley in 1989, all of which are now operating smoothly. The UN Children's Fund (UNICEF) provided US$3.215 million to construct 10 projects, including the Health Station for Women and Children. In 1995, the UNDP decided to provide US$822,000 to the four counties of Nyalam, Dinggye, Tingyi and Gyirong in the Qomolangmo Nature Reserve in western Tibet, for construction of agricultural projects, housing, schools, wind power generation, household handicraft and other projects.