* Entry of China into WTO
* Hong Kong – It is used to be the trading port of China * If Beijing enter WTO? What will happen to Hong Kong?
ANSWER ONE FILE
For China, which is already the world’s ninth largest trading entity, it will mean more external trade, and external trade of a better quality. There will be substantial tariff reductions among China’s existing trading partners and there will be access to more trading partners for China. At the same time, China will be cutting its tariffs on a broad range of products, from agricultural to industrial. Tariff reductions allow comparative advantage greater play. They will help eliminate trade distortions and facilitate a more efficient allocation of resources among the trading partners, thus further promoting economic growth globally. The World Bank’s estimates give an indication of the potential impact China’s accession to the WTO will have on the growth of China’s external trade. The Bank expects China’s share in world exports to double by 2005, from 3.7 percent to around 7.3 percent, and expects China’s share in world imports to rise even faster, from 3.4 percent to 7.2 percent. This doubling of China’s share of world trade will be complemented by opening large sectors of the Chinese economy to global competition. Foreign investors will be able to enter the telecommunications, financial services, and distribution industries, and be allowed to offer a variety of technical and professional services. These are all areas with enormous potential in China. They have already, over the past decade, seen dramatic change and expansion through the—still raging—revolution in information technology. WTO will give them a further boost by breaking down restrictive barriers and opening the channels for direct investment and technology transfer from outside. Increased foreign competition in these areas will force Chinese enterprises to speed up their reforms to meet the challenges. From a larger and longer perspective, further economic liberalization and integration into the global economy will undoubtedly be a stimulus to regulatory, institutional, and cultural change within China.
The Implications for Hong Kong
The view on the implications for Hong Kong is, on the other hand, somewhat divided. At the extreme end of the spectrum, there are those who believe that China’s WTO entry will be one more nail in the coffin, one more noose around the neck, for Hong Kong. The assumption is that the diversion of business that will result from the now well-advanced infrastructural development in China’s coastal cities and the direct access provided through WTO membership will bring about the demise of Hong Kong’s historical role as intermediary between China and the rest of the world. Proponents of this argument point to the impressive physical developments in Shanghai, the readiness—and the skill—with which our colleagues on the Mainland are embracing the English language and the Internet, and the important regulatory reforms, as if it will only be a matter of a couple of years or so for all the business now going on in Hong Kong to be lifted up and poured into the millions of square feet of gleaming new office space now waiting in Pudong. The actual outlook is, I think, somewhat more complicated, and a great deal more positive, than this scenario suggests. And it is worth adding that we have seen so many nails hammered into Hong Kong’s coffin that the coffin is now more metal than wood. According to some, in the past few years alone Hong Kong has been diagnosed with a whole collection of terminal diseases brought by the handover in 1997, the recent regional financial crisis, the “threat” not just from Shanghai but also from Seoul, Singapore, and Sydney, the high cost of doing business, declining educational standards, worsening pollution, and, believe it or not, too stable a currency as well, and a whole host of other...