What were the difficulties surrounding China’s accession to the World Trade Organisation (WTO)? Why has it taken the People’s Republic of China (PRC) over 15 years to join? What are the expected benefits and disadvantages of joining? What changes is WTO membership likely to bring to China’s economy in the future?
These are the question this paper will address. WTO accession by China is often seen as the most significant event about China in the last decade, even ahead of the Taiwan Independence issue, which continues to penetrate world news periodically. Since the end of the Cultural Revolution in 1978, China has been on a course of economic reform. Today, Chinese are richer than ever before in history, with the country itself having experienced extended periods of extraordinary growth.
Specifically, this report will highlight China’s first attempts to join the WTO more than 15 years ago in chapter two. Chapter three will focus on the main areas of difficulty surrounding WTO accession, while chapter four will comment on the final accession in December 2001. The expected economic advantages and disadvantages for China will be discussed in chapter five; finally, chapter six will offer a brief future outlook for China, again mainly from an economic perspective.
Table of Contents
1 INTRODUCTION
2 CHINA’S FIRST ATTEMPTS TO ENTER THE WTO
3 PROLONGED DIFFICULTIES
4 FINAL WTO ACCESSION
5 BENEFITS AND DISADVANTAGES OF WTO MEMBERSHIP
5.1 EXPECTED BENEFITS FROM WTO MEMBERSHIP
5.2 EXPECTED DISADVANTAGES FROM WTO MEMBERSHIP
6 FUTURE OUTLOOK
7 CONCLUSION
Research Objectives and Themes
This paper examines the complex journey of China's accession to the World Trade Organization (WTO), analyzing the historical difficulties faced over a 15-year period and evaluating the anticipated economic impacts for China in the post-accession era.
- Historical analysis of China's 15-year negotiation process for WTO membership.
- Identification of political, economic, and legal hurdles impeding accession.
- Assessment of the anticipated economic benefits, such as market access and consumer gains.
- Evaluation of potential disadvantages and systemic risks, including structural adjustment pressures.
- Future economic outlook for China within the framework of global multilateral trade rules.
Excerpt from the Book
3 Prolonged Difficulties
The difficulties that surrounded China’s admission to the WTO can be broadly categorised into three areas, namely political, economical, and legal.
Political issues had its root in numerous vested and entrenched interests from people within China, making it difficult to ‘break the political log-jam’ (Yang 2000). In addition, the Tiananmen Square massacre in 1989 shattered China’s image abroad and with it the friendly relations the country had enjoyed with its western trading partners, brought about by China’s ongoing economic reforms at a time when most if not all other socialist countries were still practicing centralised planning. Yang (2001) argues that without the incident at Tiananmen Square, GATT admission would have been granted to China by the West out of political and strategic considerations much earlier.
Economic issues were observed on two fronts, with opposition to accession both coming from within China and from abroad.
In China, interest groups, mainly in strongly protected sectors like heavy industries (such as machinery, automobiles, and chemicals) and service industries (such as domestic distribution, banking, insurance, and telecommunications) have applied considerable pressure onto the government to oppose accession. State-owned enterprises (SOEs), despite over 20 years of reforms, along with agriculture interest groups, were also strongly opposed to any GATT progression. The rational behind this can be found in the fear of more efficient competition from abroad (Fan et al., 1998). These lobby groups thus argued that WTO accession would be detrimental to China’s national interests.
Summary of Chapters
1 INTRODUCTION: Outlines the research scope, highlighting the 15-year accession struggle and the significance of China's integration into the global trading system.
2 CHINA’S FIRST ATTEMPTS TO ENTER THE WTO: Details China's initial negotiations since the 1970s and its formal 1986 application to join the GATT.
3 PROLONGED DIFFICULTIES: Categorizes the multi-dimensional barriers—political, economic, and legal—that delayed China's entry.
4 FINAL WTO ACCESSION: Chronicles the progress of final negotiations leading to China's official membership in December 2001.
5 BENEFITS AND DISADVANTAGES OF WTO MEMBERSHIP: Examines the potential positive outcomes for consumers and industry against the risks of structural constraints.
6 FUTURE OUTLOOK: Provides a forward-looking perspective on China's role in the global market and the necessary reforms for state-owned enterprises.
7 CONCLUSION: Synthesizes the main findings, reiterating that despite initial challenges, WTO membership is viewed as a catalyst for China's long-term economic growth.
Keywords
China, WTO, World Trade Organisation, Accession, Economic Reform, Globalisation, Trade Liberalisation, GATT, Foreign Direct Investment, Marketisation, State-Owned Enterprises, Economic Growth, Trade Barriers, Multilateral Rules, Industrial Competitiveness
Frequently Asked Questions
What is the primary focus of this paper?
This paper investigates the multifaceted challenges China encountered during its long transition toward WTO membership and evaluates the anticipated economic consequences for the country following its accession.
What are the core thematic areas of the research?
The research focuses on the historical context of China's trade negotiations, the specific political, economic, and legal obstacles faced, and the balance between the expected benefits and disadvantages of joining the WTO.
What is the central research question?
The study asks why China's accession process took over 15 years, what the primary political and economic hurdles were, and how WTO membership is likely to reshape China's economy in the future.
Which methodology is employed in this study?
The paper utilizes a qualitative analysis, synthesizing existing economic literature and research to provide a comprehensive overview of the transition from a restricted to a more open, WTO-integrated market.
What topics are discussed in the main body?
The main body covers the history of China's initial attempts to join the GATT, the specific sectors resisting change (such as heavy industry and state-owned enterprises), and the dual nature of impacts—ranging from consumer gains to industrial restructuring.
How would you characterize this work through keywords?
Key terms include China, WTO, accession, economic reform, trade liberalisation, foreign direct investment, and state-owned enterprises.
How did the Tiananmen Square incident affect the accession timeline?
According to the author, the 1989 incident severely damaged China's international image, causing Western partners to distance themselves and significantly delaying the political and strategic support necessary for earlier GATT/WTO admission.
What role do state-owned enterprises play in the transition?
State-owned enterprises (SOEs) are highlighted as a central point of friction; they often resisted reform due to fear of foreign competition, and the paper argues that their future survival depends on shifting toward diluted state ownership and increased partnership with private firms.
- Citation du texte
- Ben Beiske (Auteur), 2003, The difficulties surrounding China's accession to the World Trade Organisation, and the likely impacts on China’s economy in post-WTO China, Munich, GRIN Verlag, https://www.grin.com/document/15451
