World Trade Organization and China
Case: China and the WTO: What Price Membership
China’s accession to the World Trade Organization is a significant moment in not only China’s economy but the economy of the world. After 15 years of negotiations China was finally accepted into the WTO but it was not without a price. Drastic changes takes drastic measures and the inclusion of China in the WTO changed everything.
1. Was the WTO a good deal for China?
Entering the WTO would make Chinas local economy accessible to foreign markets and decrease tax tariffs on trade. For China entering into the WTO was a good deal in the long run.
However the inclusion in the WTO was not without its growing pains. With increased competition to foreign business many Cinese people lost their jobs and unemployment skyrocketed from 6.1% in 1995 to 11.1% in 2002. To compete and grow at such a rapid rate there needed to be more production and as an effect of this pollution became critical and suffered a century’s worth of environmental damage in only 30 years.
This was followed by their move of investing a huge sum of $170 billion of the overdue loans into four different companies while at the same time recapitalizing a total of $32 billion to the state banks. The foreign investment filtered more and more into the Chinese market and foreign loans become one of the main sources for the Chinese government in returning the loans
When China entered into the WTO the government was criticized for undervaluing the Yuan at $8.30.As a result the Chinese received unfair advantages to exports. This led to a 15% drop in occupation rates in the US and Europe. With a steady growth of 9% analysts believed the Chinese economy could surpass the US and Europe in GDP and GNP making it the strongest economy in the world.
China has come a long way
1. Was the WTO a good deal for China?
2. If you were advising the U.S. government, would you have recommended voting for or against China’s accession to the WTO? Including China in
China’s accession to the World Trade Organization is a significant moment in not only China’s economy but the economy of the world. After 15 years of negotiations China was finally accepted into the WTO but it was not without a price. Drastic changes takes drastic measures and the inclusion of China in the WTO changed everything.
1. Was the WTO a good deal for China?
Entering the WTO would make Chinas local economy accessible to foreign markets and decrease tax tariffs on trade. For China entering into the WTO was a good deal in the long run.
However the inclusion in the WTO was not without its growing pains. With increased competition to foreign business many Cinese people lost their jobs and unemployment skyrocketed from 6.1% in 1995 to 11.1% in 2002. To compete and grow at such a rapid rate there needed to be more production and as an effect of this pollution became critical and suffered a century’s worth of environmental damage in only 30 years.
This was followed by their move of investing a huge sum of $170 billion of the overdue loans into four different companies while at the same time recapitalizing a total of $32 billion to the state banks. The foreign investment filtered more and more into the Chinese market and foreign loans become one of the main sources for the Chinese government in returning the loans
When China entered into the WTO the government was criticized for undervaluing the Yuan at $8.30.As a result the Chinese received unfair advantages to exports. This led to a 15% drop in occupation rates in the US and Europe. With a steady growth of 9% analysts believed the Chinese economy could surpass the US and Europe in GDP and GNP making it the strongest economy in the world.
China has come a long way
1. Was the WTO a good deal for China?
2. If you were advising the U.S. government, would you have recommended voting for or against China’s accession to the WTO? Including China in