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CHINA’S WTO MEMBERSHIP:SIGNIFICANCE AND IMPLICATIONS.doc
CHINA’S WTO MEMBERSHIP:SIGNIFICANCE AND IMPLICATIONS
No. E2000007 2000-9
CHINA’S WTO MEMBERSHIP:
SIGNIFICANCE AND IMPLICATIONS
Wen Hai
China Center for Economic Research (CCER)
Peking University, Beijing 100871, China
NO. E2000007 September 9, 2000
After more than 20 years of reform and 13 years of negotiations, China finally signed the agreement on WTO accession with the United States (on November 715, 1999) and with the European Union (on May 19, 2000). Although China still needs to conclude the negotiations with a few more countries, it is clear that China has successfully completed the most important and difficult steps to enter the world trade organization. China’s WTO membership is just a matter of time.
Needless to say, China’s accession to the WTO will have significant impacts for both China and the world economy. There are at least three important reasons for economists, as well as policy-makers, to study and understand the significance of and implications of China’s WTO accession. First, China is a big economy. Any changes in such a huge economy will most likely affect the equilibrium of the world market, even the world economic system. It is obviously that China’s WTO membership will bring big changes in China’s economic performance and structure. These changes, in turn, will affect the world economic performance and business structure. This is one of the reasons why the WTO negotiations with the United States and the EU took so long. Secondly, China is a developing country. China’s decisions and actions regarding WTO will affect the decisions and actions of other developing countries. If China opens up its markets more than most developing countries, it will bring pressure on other developing countries to do likewise. On the other hand, if China maintains more protection for its domestic markets, it may increase the bargaining power of developing countries in the world trading system. Thirdly, China is a transitional economy. How t
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