Adjustment of China’s Economic Policies after WTO Accession.pdfVIP

Seminar of Development and Research Center - Organization of Economic Cooperation and Development, 2002 Beijing, 26 March 2002 Adjustment of China’s Economic Polic ies after WTO Accession Bruce Murray Resident Representative Asian Development Bank Mr. Chairman, ladies and gentlemen: It is an honor for me to be speaking in the wrap-up session of the DRC- OECD seminar on China after WTO Accession. We have listened to many excellent discussions related to the implications of China’s accession to WTO and the required policy adjustments. China began the process of opening its economy to the outside world in 1978. Considerable progress had been made before China completed the long and arduous discussions that culminated in accession to WTO. The foreign trade-to-GDP ratio is one measure of the openness of an economy. China’s ratio is an unusually high 40%. This compares to less than 20% in Japan, the United States and India. China was very successful in increasing its exports and attracting FDI before joining WTO. Foreign direct investment accounts for 17 to 18% of China’s total investment, compared to only 6% for the US. As Nicolas Lardy said yesterday, China made significant progress in reducing tariff and non-tariff barriers to trade and reforming the trade regime before joining WTO. China should have no problem meeting its WTO obligations in these areas. Having said this, WTO membership will undoubtedly help to keep liberalization on track as the inevitable resistance arises from entrenched domestic special interests. This point has highlighted by Liu Shijin.