The Impact of WTO membership in China

1、The Impact of WTO membership in China 1. Introduction 1.1 International Trade Trading is the transfer of ownership of goods and services from one person to another. International trade is the exchange of goods services across national borders, that is, exports and imports. The most important princip

2、le of international trade and which can control others is comparative advantage, which suggests that every country, no matter developed countries, developing countries and less developed countries, can look for something that it can produce cheaper than another country. (Economic Glossary, 2007) 1.2

3、 World Trade OrganizationThe World Trade Organization (WTO) began its life on 1 January 1995. It was started to deal with the rules of trade between nations and to help producers of goods and services, exporters, and importers conduct their business. The General Agreement on Tariffs and Trade (GATT)

4、 had provided the rules for WTOs system and the last and largest GATT round led to the WTOs creation. (World Trade Organization, 2011)There were 153 members on 23 July 2008 (with dates of membership) such as Japan, Singapore, India, Indonesia, and Korea. There are a number of ways of looking at the

5、WTO. Its an organization for liberalizing trade. Its a forum for governments to negotiate trade agreements and a place for them to settle trade disputes. It also operates a system of trade rules. (World Trade Organization, 2011)WTO has three important functions. First, it is the conference organizat

6、ion for all multilateral trade issues. Second, it is the depositary of a large number of international trade conventions that are binding to all members. And third, the WTO has a chemical for conflict resolution with an arbitration court and penalties which are universally recognized. (World Trade O

7、rganization, 2011) 1.3 China trading system Beginning around 1978, China began to use economic reform which more and more relaxed limitations of farming, agricultural, urban enterprises and labor. The more market-oriented approach reduced inefficiencies and stimulated private investment, particularl

8、y by farmers, that led to increased productivity and output. (Ramesh Adhikari and Prema-chandra Athukorala, 2002)Table 1: Chinese GDP and related Data, official Figures, 1998-2001 (Percentage change)Cumulative growth19981999200020011998-2001Real GDPOfficial 7.934.5Energy Use-6.4--5

9、.5Urban Formal employment 1.20.8Consumer Price Index-0.8-1.40.4-0.5-2.3Notes: Figures for 2001 cover only the first two quarters. The cumulative growth calculations assume no change for the second half of 2001. Endpoints of cumulative growth range based on low and high annual growth figures

10、. (Source: Chinese Government Data, 2000)These statistics measures for 1998-2001 years imply that Chinas economy has entered an unprecedented interlude that combines high-speed growth with declining energy use, falling prices, and minimal employment growth. 1.4 China popular trading products There a

11、re many China popular trading products such as zinc, nickel, lumber, mining & oil equipment, household goods, footwear, and toys & sporting goods. (Daniel Workman, 2007) 2. China became a 143rd member of WTO in 2001 2.1 Reasons China joined WTO First, China wanted to find more countries in t

12、he rest of the world for its exports. With joining WTO, China can export products to other 100 countries with most-favored-nation clause, which may increase Chinese exporting rapidly.Second, China wanted to reduce domestic distortions and increase domestic competition in order to achieve efficiency

13、gains. With joining WTO, there will be more foreign companies entry into China economy which will stimulate Chinese enterprises awareness of competition in order to win in the competition. Third, China wanted to attract more foreign countries investment. With joining WTO, China will open more indust

14、ries to attract foreign investment. Foreigners can invest in Chinese enterprise, and they also can set up their own factories. (Peter Drysdale and Ligang Song, 2002) 2.2 The impact of Chinas WTO memberChinas accession to the World Trade Organization has an important meaning both for China and WTO. F

15、or WTO, Chinas accession makes it truly become a complete global world trade organization in order to better play its role. However being a member of WTO does not mean that China just play positive impact of international trading. There is also negative impact the country faced. In the following, th

16、e positive and negative impacts of China after becoming a member of WTO will be discussed.2.2.1 The Positive Impact For China, WTO membership has positive significance of the following areas:1) Faster and better integrate into the international economic World economic integration, globalization is t

17、he main trend of world economic development. Joining this trend, China can fully share the benefits of the international division of labor, economic and technological at the same time with the world advanced forward. Accession to the WTO can help the Chinese economy into the international economy an

18、d society better, and better use of international resources and international market, optimize resource allocation, development of China's socialist market economy. (Global Info, 2006) 2) Absorb more foreign investmentAfter Chinas accession to WTO, government opens many promising industries to f

19、oreign investment, and provides national treatment to foreign-invested enterprises which will make a lot of foreign capitals flow into China. These foreign capitals can not only make up for the lack of construction funds, but also bring a lot of advanced management experience and increase employment

20、 opportunities in order to promote the health and rapid development of China's economic. (Global Info, 2006) 3) Expand exporting Chinas accession to WTO can help to improve China's international trade environment, and promote the development of international trade. After China's joining

21、WTO, it can get the multilateral Most Favored Nation treatment. The multilateral trading system is conducive to the export market diversification. After joining WTO, China can enjoy the preferential treatment of developing countries Parties, which can provide a good opportunity to Chinas foreign eco

22、nomic and trade development. (Global Info, 2006) 4) Arouse Chinese companies sense of competitionAfter joining WTO, there will be more foreign multinational companies enter the China market, which will enhance domestic economy industrys competition. Chinese enterprises and domestic firms should be m

23、ore aware of competitive and focus on research and development and the cultivation of the brand, increase the technological input, trying to improve the quality of staff and enterprise management level. Competitive pressures will lead to state-owned enterprises to speed up the economic structure and

24、 product structure adjustment, accelerated restructuring, reorganization, combination, merger process. (Global Info, 2006) 5) Participate the process of economic globalizationChinas accession to WTO can help Chinas participation in the process of economic globalization. Economic globalization is the

25、 inevitable tide of history, and for developing countries, it takes both opportunities and challenges. Joining WTO, China and the other members shall be in strict accordance with international rules, open markets to each. This will help China to participate fully in international competition and int

26、ernational cooperation and give full play to China's comparative advantage. At the same time, WTO is also beneficial to China and the multinational companies to conduct extensive cooperation, the introduction of multinational capital, technology and management experience, and the use of sales ch

27、annels and networks of multinational companies to expand exports. WTO accession is also conducive to the establishment of China own multinational companies to go abroad, to set up factories in other countries to do business, to improve the international competitiveness of the Chinese economy. (Globa

28、l Info, 2006) There are some statistics in the following: Table 2: Chinas Average Annual Real GDP Growth Rate (1999-2006) YearAverage Annual Real GDP Growth Rate19997.620008.420018.320029.1200310.0200410.0120059.9200610.02 Source: Official Chinese Government Data, 2010 2.2.2 The Negative Impact Join

29、ing WTO, China will not only enjoy the due rights but also undertake corresponding obligations, which will inevitably bring China some pressure and challenges. Challenge 1: Unemployment loss of job China has a large number of populations and there are many unemployed labors almost 700 million. This

30、is clear that very large group of people will be seeking jobs within the next few years. Someone ever made a conservative estimate: the Chinese economy will need to create about twice as many jobs as it has been creating annually over the last few years. During creating more jobs, the workers also m

31、ust be well trained in order to make the productivity growth, use the technology to improve quality and serve better service. (Cheong Ching and Yee Hung Ching, 2003)Challenges 2: Regional and social inequalitiesIn recent years the Chinese economy has become increasingly polarized. The difference bet

32、ween city and rural areas and between littoral, central and western is growing. During 1987-98, the coastal provinces grew three percentage points more than the central regions and almost four percentage points more than the western regions. In addition, whereas in the eastern regions urban incomes

33、are twice as high as rural incomes, in the western ones they are more than three times as high. Although the government has done some efforts to relieve the pressure, there are more remains should be done. During solving this problem the most important is the decentralization of incentives and produ

34、ctive activities, and the development of agricultural and rural infrastructure. (Dahlman and Aubert, 2001) Challenge 3: Facing more competitionOpening more market will make a number of products, businesses and industries face more intense competition. After joining WTO, China must comply with WTO pr

35、ovisions on market opening, which will give China a certain pressure on the speed of open market and steps. With the expansion of market access, tariff reduction and elimination of non-tariff measures, foreign products, services and investment are likely to have greater access to China market; domes

36、tic enterprises will face more intense competition, especially those of high cost, low technical level and backward management business, extent by the WTO rules. (Cheong Ching and Yee Hung Ching, 2003) Challenge 4: Different senses and systemsChinas existing foreign-related economic laws, regulation

37、s and policies do not fully comply with WTO rules. Although this is also Chinas important task of innovating the management of foreign trade, in the senses and systems there are many places China cannot adapt to, and there is also a big gap between the government agencies and corporate management st

38、aff. (Peter Drysdale and Ligang Song, 2002)Challenge 5: Environment pollution After joining WTO, China will have a rapid economic growth which needs more and more factories to manufacture products for exporting. The more production of goods, the more pollution will be. Those factories discharge indu

39、strial waste water into river which can cause fish to die. Due to the specific features of production process, some factories also cause noisy pollution. Some factories also discharge of pollutants to air. These pollutions have an adverse effect on biological system and they will affect humanity its

40、elf sooner or later. (Brooks, I., 2004)2.3 Some resources about the future trading of China Referring to China daily (global newspaper), 2001, analysts in Changchun say that Chinas futures market has “embarked on a new road of steady growth” after years of recession and overhaul. Mr. Liu, manager of

41、 a future broker in Changchun, the capital of northwest Chinas Jilin Province, said Chinas futures market is “very promising”. He said his company has hit a record high during the first half of this year, with a total transaction of 9.7 billion yuan (US$ 1.17 billion).Experts attending a recent symp

42、osium in the coastal city of Dalian also believe the futures market is recovering significantly. “While business operation is better regulated, transactions have increased and the market is becoming more rational,” said one of the experts. Meanwhile, experts pointed out that Chinas futures market st

43、ill has great potential for future development, as more products can be placed on the market. Mr. Han, who works at a futures broker in Jilin City, told Xinhua that Chinas upcoming accession to the World Trade Organization will probably lead to the phasing out of some old rules that do not conform t

44、o international practices. “As regional protective measures and administrative interventions decrease in number, the futures market will be able to operate more effectively and in line with the laws of the market,” said Han, “In the long run, Chinas futures industry will report further growth.” 3. C

45、ountries not a member of WTO Here are three selected countries that can be examined of their reasons behind for not being a member of WTO. 3.1 RussiaRussia has been hard to join WTO, but there are lot of things must be thought about. Membership in the WTO and the need to comply with its entry requir

46、ements will eventually act as a strong framework for advancing Russias economic reforms. For Russia, there is a danger that pushing for membership at too early a stage, and particularly entry under the wrong conditions, could pose risks for support of the fledgling reform process. (Aven Peter, 2003)

47、 3.2 KazakhstanSince 1996 Kazakhstan has started negotiations to join the WTO. One of the important reasons that hinder its entry into WTO is that its economies are in transition. If a country cannot guarantee economic liberalization, while its domestic economy in the large proportion of the nationa

48、l economy, and then the difficulty of its application to join WTO would be even greater. (Kazakhstan Government, 2011) 3.3 Iran. Other countries opposed to Iran developing nukes. If Iran can stop nuclear program permanently, it may easy join to WTO. (New York Times Company, 2011) 朗读显示对应的拉丁字符的拼音 

49、;字典1. 连词 1. if2. in case4. Conclusion I think we should use the comprehensive, developmental and dialectical attitude to look upon this question. We should stand in the reform and opening up, economic development, modernization and strategic perspective to analyze the pros and cons of Chinas accessi

50、on to WTO. In the short-term, China economy will face large shocks form foreign countries; some Chinese enterprises may not be able to compete with foreigner companies which will cause large number of people lose their jobs and increase the unemployment rate. But for the long-term, Chinas accession

51、to the WTO has deep influence on the long-term economic development and peoples living standards. It may improve Chinas economic system; establish better industrial structure; enhance Chinas international competitiveness and international standing. If China increases imports of foreign cultural prod

52、ucts, ordinary people will have access to more world cultures, broaden their horizons and improve the level of art appreciation. Ordinary people also can purchase more and more foreign products even some luxury goods. Chinas accession to the WTO is a historical milestone. China joins as a developing

53、 country and its absolute economic size will help similar developing countries in their dealings with the developed countries. Chinas accession to WTO is both an opportunity and a challenge, China must prepare for seizing the opportunity and rising to the occasion. In the future, China will be the m

54、ost influential country in the world no matter in the political or economic. How China performs from will determine the nature of the future WTO as an international organization. References: Aven Peter Russian WTO membership: to join or not to join, that is the question(Updated 2003) Accessed 28 May

55、 2011 BROOKS, I. et al. 2004. The International Business Environment. London: Prentice Hall Cheong Ching and Yee Hung Ching, 2003. Handbook on Chinas WTO Accession and Its impacts World Scientific Publishing Co. Pte. Ltd. Daniel Workman Top Chinese Exports & Imports (Updated June 28 2007) most popular products traded between China and America Accessed 5 June 2011Economi