China and the World Trade Organization

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China became a member of the World Trade Organization (WTO) on 11 December 2001,[1] after the agreement of the Ministerial Conference.[2] The admission was preceded by a lengthy process of negotiations and required significant changes to the Chinese economy. Its membership has been contentious, with substantial economic and political effects on other countries (some times referred to as the China shock) and controversies over the mismatch between the WTO framework and China's economic model.[3][4] Assessing and enforcing compliance has become issues in China-US trade relations,[5] including how China's noncompliance creates benefits for its own economy.[6]

Background

Until the 1970s, China’s economy was

GATT and from 1986, began to work toward joining that organisation. China aimed to be included as a WTO founding member (which would validate it as a world economic power) but this attempt was thwarted because the United States, European countries, and Japan requested that China first reform various tariff policies, including tariff
reductions, open markets and industrial policies.

Preparations

After the

chambers of commerce.[7]

The World Trade Organization Ministerial Conference of 1999 and related 1999 Seattle WTO protests were the penultimate step before Chinese accession.[8]

United States' role

Formal diplomatic relations between the United States and the People's Republic of China were not

most favored nation status in 1980. Chinese-American trade was still hindered by the Jackson–Vanik amendment of 1974, which made trade with the United States contingent on certain human rights metrics.[9]

By 1984, the United States had become China's third-largest trading partner, and China became America's 14th largest. The annual renewal of China's MFN status was constantly challenged by anti-Chinese

1989 Tiananmen Square protests' suppression, the Bush I administration and Congress imposed administrative and legal constraints on investment, exports, and other trade relations with China.[9]

The

War on Terror.[11]

Conditions

These changes were difficult steps for China and conflicted with its prior economic strategy. Accession meant that China would engage in global competition according to rules that it did not make. China's admission was "an enormous multilateral achievement" that marked a clear commitment toward multilateralism.[12]

When China joined the WTO, it agreed to considerably harsher conditions than other developing countries.[13][14] After China joined the World Trade Organization (WTO), its service sector was considerably liberalized and foreign investment was allowed; its restrictions on retail, wholesale and distribution ended.[15] Banking, financial services, insurance and telecommunications in China were also opened up to foreign investment.[16] Furthermore, China had to deal with certain concerns linked to transparency and intellectual property that the accession to WTO underlined.[17][18]

Non-market economy

Under Article 15 of the protocol by which China joined the WTO, China was recognized as a Non-market economy (NME). This status allows special treatment within the WTO. The status was set for 15 years and has been disputed after 2016, the year when the 15 years had passed.[19]

See also

  • Chinese economic reform
  • China shock
  • Gao, H.; Raess, D.; Zeng, K.(Eds.). (2023). China and the WTO: A Twenty-Year Assessment. Cambridge UK: Cambridge University Press (open access).
    doi:10.1017/9781009291804
    .

References

  1. ^ "WTO | Accessions: China". www.wto.org. Retrieved 2018-08-06.
  2. ^ "Accession of the People's Republic of China - Decision of 10 November 2001". World Trade Organization. 23 November 2001.
  3. ISBN 978-0-691-20660-8
    .
  4. JSTOR 10.7591/j.ctv1bxh5p1
    .
  5. ^ "Hearing: China and the WTO: Assessing and Enforcing Compliance". www.uscc.gov. Retrieved 2023-07-06.
  6. ^ "False Hope & Broken Promises: Chinese Compliance With the WTO". Retrieved 2023-07-06.
  7. S2CID 154509255
    .
  8. ^ Smith, Noah (6 January 2014). "The Dark Side of Globalization: Why Seattle's 1999 Protesters Were Right". The Atlantic Monthly Group.
  9. ^
    S2CID 144657047
    .
  10. ^ "Foreign Trade - U.S. Trade with China". Census.gov. Retrieved 2012-07-06.
  11. doi:10.1177/186810261003900307
    .
  12. ^ "Money talks: An enormous multilateral achievement". The Economist. 5 December 2011. Retrieved 2012-07-06.
  13. ^ Branstetter, Lee (2008), "China's embrace of globalization", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Economic Transformation, Cambridge, UK: Cambridge University Press, p. 655
  14. S2CID 154847791
    .
  15. ^ Branstetter 2008, p. 657
  16. ^ Branstetter 2008, pp. 658–659
  17. SSRN 1527992
    .
  18. SSRN 1679999
    .
  19. ^ "Is China a Non-Market Economy, and Why Does It Matter?". Econofact | Key facts and incisive analysis to the national debate on economic and social policies. 2017-04-13. Retrieved 2021-04-15.
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