Sunday marked the 10th anniversary of China’s accession to the World Trade Organization (WTO) to be its 143rd member.
China’s membership of the trade club ushered in the dawn of a new historical stage in its opening up and has yielded rich win-win results for itself as well as the world. But still China will implement a more proactive opening up strategy and open more areas to the outside world, promised Chinese President Hu Jintao.
In 2010, China surpassed Japan to become the world's second-biggest economy and today it is the world's biggest exporter and second-biggest importer.
China's trade in goods surged to nearly 3 trillion U.S. dollars in 2010 from 509.8 billion dollars in 2001, with exports soaring by nearly five times and imports up by 4.7 times.
China's performance after the WTO entry has also tremendously benefited other countries, with its accumulative contribution to the world's GDP growth during the 2000-2009 period exceeding 20 percent.
Commitments fulfilled
China had made a contribution to the system over the past decade by opening its economy, improving the stability, predictability, transparency of a largen number of rules that favor trade and economic activities, and enhancing employment and growth.
Pascal Lamy, director-general of the WTO, said China has acted as a responsible WTO member -- a success story for China and also a success story for the rest of the world as proven by foreign companies and consumers reaping fruits from its growth.
To honor its WTO commitments, China has slashed the average tariff from 15.3 percent to 9.8 percent, imported goods worth 750 billion U.S. dollars annually, which created at least 14 million jobs for other economies, opened up 100 different areas of the service sector, and reviewed over 2,300 domestic laws, regulations and departmental rules to adapt to international norms.
It has also further opened its service markets to the world, manifesting that the country’s determination to embrace common standards and better integrate with the world.
In the past 10 years, nearly 350,000 foreign-funded companies were set up in China, generating profits of 261.7 billion U.S. dollars.
In 2009, global goods imports decreased 12.8 percent, while China's goods imports increased 2.9 percent, making China the only country to maintain import growth among the world's largest economies.
Michael Moore, former Director General of the WTO, said if China hadn't been admitted to the WTO, the world would now have been very "dangerous."
“Never in the history of our species have so many people have been lifted out of extreme poverty -- hundreds of millions of people…… Take it the other way, how dangerous the world would be without China in the trading system. How unstable, how unpredictable, if China is not consuming and buying,” said Moore.
Disputes and frictions increase
With rapid increase of foreign trade, more disputes and frictions have occurred, particularly in the fields of textiles, shoes, tires, auto parts, iron and steel, and chemical products. And China is the primary victim of trade protectionism and remedy probes by some.
Although their economies benefit from China’s growth and lucrative market, they fret about smaller profit margin and unjustifiably attribute it to China's slowing pace of opening up, less transparent governance, weaker law enforcement and more discrimination against foreign investors.
The inexpensive Chinese-made products have been blamed for hastening the decline of manufacturing in Western economies and undercutting their jobs.
According to WTO data, from 1995-2010, 784 out of 3,752 trade remedy cases worldwide were filed against China, accounting for 20.9 percent of the total. However, from 1995 to 2000 when it was not a member of WTO, China accounted for about 10.5 percent to 19 percent. After China joined the WTO, the figure went up from 14.8 percent to 37.6 percent from 2001 to 2010.
Technical barriers have been fast rising, especially in the EU that, during the first half of 2011, announced 1,714 food and feed safety cases, with 255 linked to China.
China remains open and welcomes foreign investment and trade, but in a different way which emphasizes cooperation in the upper reaches of the food chain, other than low-added value ties.
Daniel Ikenson of the CATO Institute, a libertarian think tank headquartered in Washington, D.C., said these disputes are just part of the process and a good reason to have China in the WTO.
"The relationship is maturing. The world’s second largest economy has grown, [and] there are going to be frictions, （there) are going to be complaints," Ikenson said, "We've had many more trade disputes with Europe and Canada than with China. That's the way mature relations settle their differences."
If China implodes, Ikenson added, that will really have an adverse effect on the rest of the global economy.
China’s promise
China believes that an open and market-based economy with esteem for laws and rules is the elixir of future prosperity. It respects the basic elements and rules of a market economy, but it also has the initiatives to map out the details based on its unique conditions.
China will implement a more proactive opening up strategy and open more areas to the outside world, Chinese President Hu Jintao said in a keynote speech at a forum to commemorate the 10th anniversary on Sunday.
The country also pledges to build a fair, stable and transparent investment environment for domestic and overseas businesses, reduce government intervention in micro-economic activities, and enhance protection of intellectual property rights.