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WTO needs China
In the 50-plus years since the founding of China and, in particular, in the last 20 years
of reform and opening up, the Chinese economy has developed substantially. Its annual
average growth rate is 7.7%, which is much higher than the world average growth rate of
about 3% for the same period. Such fast economic growth has greatly narrowed the gap
between China and other developed nations. According to World Bank estimate, China’s
economy in 1997 rose to 7th in the world. The total output of many important industrial and
agricultural products took up 1st or 2nd place. External trade has now extended to over 200
countries and regions. As for total import and export value, China’s ranking has risen from
32nd in 1978 to 11th place today. China is now a large trading country of great importance
in the world.
China’s population is one-fifth of the world population. Labour cost is low and there
are rich natural resources. These are big attractions to countries with limited labour and
natural resources. China has ample practical skills and rich experiences in the management
of enterprises. These skills and experiences are very much in demand by many developing
countries. China with its 1.2 billion population is seen by foreign businesses as a huge
market with a wealth of opportunities.
With its comparative advantage, China
complements other national economies in world trade. Without the inclusion of China as
the largest of developing nations, the WTO is incomplete.
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1.
Do you agree with the statement “Without the inclusion of China as the largest of
developing nations, the WTO is incomplete”? Give reasons.
On the eve of China’s entry into the WTO, both the general public and
those in the field of economics in Beijing, Shanghai, Guangdong etc. found
themselves in many ways filled with expectation and excitement.
The people of Guangzhou were quite concerned about China’s entry
into the WTO. Some believed that China’s entry would present
unprecedented challenges and at the same time a wealth of opportunities to
Guangzhou.
They were confident about the competitive ability of
Guangzhou’s economy, which was top of the nation in at least 7 areas. The
household electrical appliances industry was undaunted in the face of
challenges. The retail catering business already survived many tides. Local
banks set up many outlets and connections. Demands for
telecommunications would rise sharply. Export of textiles and garment
would multiply. Food and beverages would continue to do well. The
automobile trade would continue to expand. Guangzhou did not seem to
fear competition at all.
The citizens of Beijing seemed quite happy too about entering the
WTO. In large book shops in the districts of Xidan, Wangfujing etc., books
on the WTO became bestsellers. Shop attendants disclosed that during the
holidays dozens were sold each day.
In Shanghai, the public and business did not show too much
excitement or nervousness. China in the WTO would be good for the
competitive consciousness of its financial sector, allow it to catch up with
advanced international standards, and turn Shanghai into an international
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financial centre, and so on. It was thought that China’s entry into the
WTO would mean becoming part of the global economy. Many foreign
trading companies are flocking into China. Some trading companies on the
mainland are excelling in a number of economic constituents. Let us join
in and compete.
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2.
How would you describe the reaction and sentiment of Guangzhou, Beijing,
Shanghai etc. towards China’s entry into the WTO?
3.
Based on the information given above, explain the different sentiments and
behaviour of the general public and members of the economic sector in Beijing,
Shanghai, Guangzhou etc. on the eve of China’s entry into the WTO.
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China’s entry into the WTO
After 15 years of negotiations, China finally became the 143rd member state
of the World Trade Organisation on Tuesday (11 December 2001).
ZHU Rongji said in the official media that it would be necessary for China
to join the WTO in order that the living standards of the people could be further
enhanced. However, he said that the WTO membership would come with a
price. To him, entry into the WTO is an inevitable choice if China is to
maintain high economic growth and healthy development. At the same time,
however, certain industries and commodities would unavoidably be subjected to
blows in the short term. ZHU Rongji also stated that whether the benefits
would outweigh the disadvantages would depend on how well everyone can
perform.
Analysts pointed out that China’s entry into the WTO would allow it to
integrate further with the mainstream world economy and fortify the results of its
reform and opening up since 1978. As a member state, China would be able to
expand its international trade quickly, attract much more foreign investment and
encourage the development of private-run enterprises.
Foreign investors hope that China would operate according to the law and
fulfill its commitments that come with entry into the WTO. In this way,
enterprises from all over the world would find it much easier to enter the
Chinese market with its population of 1.2 billion.
What the Beijing government and the international authorities worry
most is that local officials in China may, out of ignorance of WTO rules or
deliberately protective of local interests, block China from fulfilling its WTO
commitments.
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4.
What are the attitudes of Chinese government officials and western investors
towards China’s successful entry into the WTO? Explain their views.
5.
ZHU Rongji suggested that whether the benefits of China’s entry to the WTO
would outweigh the disadvantages would depend on how well everyone can
perform. How would you interpret his words? Try and explain your view.
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The Chronology of China’s entry into the WTO
For a brief introduction of the WTO, may refer to the following website:
<http://as3.mingpao.com/specials/cfm/rnews_content1.cfm?FileName=Content82_4_1.htm>
From July 1986 when China applied to join the GATT to November
2001 when China was officially accepted at the Ministerial Conference of all
member states at Qatar, it took 15 years. May refer to the following website
for the chronology of China’s entry into the WTO
<http://as3.mingpao.com/specials/dat/wtochina/>