CHINA AND THE W.T.O:
What price membership ?
WHY TALK ABOUT CHINA?
• 2nd Largest economy of
the world after the U.S.
• Largest economy in the
world on PPP calculations
according to a 2014
estimate from IMF.
• Fastest growing major
economy( >10% average
in last 30 years)
• Largest manufacturing
economy of the world
• Largest exporter of goods.
• Largest growing consumer
• 2nd Largest importer of
• China became the world’s
largest trading nation in
A BRIEF OVERVIEW OF CHINA’S
• Beginning of China’s economic reforms under
leadership of Deng Xiaoping (9.3 average growth
• Household responsibility system
• Township-Village enterprises (TVE’s)
• SOEs (State Owned Enterprises)
• Consensus was that state’s role
in the economy was far too
WHY DID CHINA WANT TO JOIN
• Significant long-term and structural benefits.(1989 sanctions) • Desire to be an important player on the world stage.
Influence in policy making
Decisions might affect its vital interests without its input.
• External disciplining mechanism to improve efficiency
of its industries.
• WTO entry will bring a number of specific economic benefits to China. 1.
Improve market access for Chinese goods to major markets.
To increase FDI.
TERMS CHINA AGREED TO IN ITS WTO
• It took almost 15 years of negotiations both multilaterally and bilaterally with each interested WTO member.
• Unprecedented number of changed were made by China ranging from Foreign Business, Free Trade and improvements in transparency.
REFORMS FACILITATING FOREIGN BUSINESS
Promised to phase in full trading and distribution rights. Abolish dual pricing.
Foreign companies were to be allowed to hold majority shares in Chinese retailers within two years of accessions and to provide their own retail services within three years of accession.
Foreign insurance suppliers were gradually allowed to expand their scope of activity.
The maximum percentage equity share that foreign telecommunications suppliers were allowed to hold in joint vents was steadily increased to 49%50%. By 2003, foreign banks were permitted to conduct domestic-currency business with Chinese enterprises, and by 2006, with Chinese individuals .
REFORMS PROMOTING FREE TRADE
Implement substantial tariff reduction (immediately upon accession). Eliminate most of its non-tariff measures, such as import quotas. Not to subsidize its exports, to cap subsidies of domestic industries, and to eliminate the state- controlled monopolies for agricultural goods.
Promised that the sanitary and phytosanitary standards by which it judged agricultural imports would be uniform and scientiﬁcally based. China committed to treat the exports of WTO members as it treated domestic Chinese goods
To treating imported goods comparably with domestic goods when making regulatory judgments, levying fees and assessing complaints. To adhere to standard customs valuations procedures, which were designed to ensure that gains from reductions in tariff rate were not undermined by increases in total tariffs from the overvaluation of imports .
SYSTEMATIC REFORMS TO IMPROVE THE
Protection of intellectual property rights
COMPLICATIONS CAUSED BY CHINA’S
• Threat to domestic sector
• Acquisition of overseas Oil.
• Household welfare
• Looming question of
whether China’s trade
boom was hurting the
• Rural-urban inequality
• Environmental damages
Ultimate effects of Chinese accession still unknown. It has brought both good and bad influences with it for both China and the world. Managing China’s global integration would require some...
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