china’s accession to the wto - brandeis university.docVIP

China’s Accession to the WTO -by Stuart KOTTLE In terms of economics, The People’s Republic of China has had a turbulent relationship with the outside world throughout its history. In the 20th century, despite having seen what isolation had done to his country over the centuries, Mao Tse-tung and his Communist party decided to shun other nations during the twentieth century and instead relied on a homegrown agricultural revolution to promote economic strength. This policy ended in disaster, leading to famine and economic decay throughout the entire country. It was not until the next generation of Communist leadership realized that China should embrace the rest of world – albeit on Chinese terms – that the country began to flourish. The path toward opening China’s borders to trade began with steps Deng Xiaoping took in the late 1970s. On July 1, 1979, China’s Communist government passed the “Chinese-Foreign Joint Venture Law,” which created conditions for firms to build joint ventures inside of China. The significance of joint ventures is that they are both a vehicle to attract foreign investment and a means to allow domestic Chinese companies to acquire technology from their foreign partners. Since 1979, the implementation of this law has created 360,000 additional foreign invested enterprises, which have resulted in more than 348 billion dollars of direct investment into the Chinese economy. The reforms of the 1970s helped to persuade the rest of the world that China could be a trusted trade partner and ultimately set the stage for China’s most dramatic feat in its economic progression – accession to the World Trade Organization (WTO). Given the poor state of the Chinese economy before the reforms of Deng Xiaoping, how did China accomplish this, and what will China’s acceptance in the WTO mean for China’s economic relationship with the US? Even before China’s accession to the WTO became debated on the international stage, the country had been making substan