China And The WTO

Topics: World Trade Organization, Deng Xiaoping, International trade Pages: 16 (866 words) Published: November 10, 2014
CHINA AND THE W.T.O:
What price membership ?

WHY TALK ABOUT CHINA?
Economy
• 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)

Trade
• Largest manufacturing
economy of the world

• Largest exporter of goods.
• Largest growing consumer
market
• 2nd Largest importer of
goods.
• China became the world’s
largest trading nation in
2013

A BRIEF OVERVIEW OF CHINA’S
ECONOMIC HISTORY
1978: Mao
Zedong’s
death

• Beginning of China’s economic reforms under
leadership of Deng Xiaoping (9.3 average growth
rate).

Various
development
programmes

• Household responsibility system
• Township-Village enterprises (TVE’s)
• SOEs (State Owned Enterprises)

1986: China
started seeking
membership of
GATT.

• Consensus was that state’s role
in the economy was far too
great.

WHY DID CHINA WANT TO JOIN
GAAT/WTO?
• Significant long-term and structural benefits.(1989 sanctions) • Desire to be an important player on the world stage.
1.
2.

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.
2.

Improve market access for Chinese goods to major markets.
To increase FDI.

TERMS CHINA AGREED TO IN ITS WTO
NEGOTIATIONS
• 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
TRANSPARENCY
 Transparency
 Protection of intellectual property rights

COMPLICATIONS CAUSED BY CHINA’S
ACCESSION
Domestic Impacts

International Impacts

• Threat to domestic sector

• Acquisition of overseas Oil.

• Household welfare

• Looming question of
whether China’s trade
boom was hurting the
West.

• Rural-urban inequality
• Environmental damages

CONCLUSION
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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