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China And The WTO

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China And The WTO
CHINA AND THE W.T.O:
What price membership ?

WHY TALK ABOUT CHINA?
Economy
• 2nd Largest economy of the world after the U.S.
• Largest economy in the world on PPP calculations according to a 2014 estimate from IMF.
• Fastest growing major economy( >10% average in last 30 years)

Trade
• Largest manufacturing economy of the world

• Largest exporter of goods.
• Largest growing consumer market • 2nd Largest importer of goods. • China became the world’s largest trading nation in
2013

A BRIEF OVERVIEW OF CHINA’S
ECONOMIC HISTORY
1978: Mao
Zedong’s
death

• Beginning of China’s economic reforms under leadership of Deng Xiaoping (9.3 average growth rate). Various development programmes

• Household responsibility system
• Township-Village enterprises (TVE’s)
• SOEs (State Owned Enterprises)

1986: China started seeking membership of
GATT.

• Consensus was that state’s role in the economy was far too great. WHY DID CHINA WANT TO JOIN
GAAT/WTO?
• Significant long-term and structural benefits.(1989 sanctions)
• Desire to be an important player on the world stage.
1.
2.

Influence in policy making
Decisions might affect its vital interests without its input.

• External disciplining mechanism to improve efficiency of its industries.

• WTO entry will bring a number of specific economic benefits to China.
1.
2.

Improve market access for Chinese goods to major markets.
To increase FDI.

TERMS CHINA AGREED TO IN ITS WTO
NEGOTIATIONS
• It took almost 15 years of negotiations both multilaterally and bilaterally with each interested WTO member.
• Unprecedented number of changed were made by China ranging from
Foreign Business, Free Trade and improvements in transparency.

REFORMS FACILITATING FOREIGN BUSINESS
 Promised to phase in full trading and distribution rights.
 Abolish dual pricing.
 Foreign companies were to be allowed to hold majority shares in Chinese retailers within two years of accessions and to provide their own retail services within three years of

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