China and the World Trade Organization

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China became a member of the World Trade Organization (WTO) on 11 December 2001.[1] The admission of China to the WTO was preceded by a lengthy process of negotiations and required significant changes to the Chinese economy. It signified China's deeper integration into the world economy.[2]


Until the 1970s, China’s economy was managed by the communist government and was kept closed from other economies. Together with political reforms, China in the early 1980s began to open its economy and signed a number of regional trade agreements. China gained observer status with GATT and from 1986, began working towards joining that organization. China aimed to be included as a WTO founding member (which would validate it as a world economic power) but this attempt was thwarted because United States, European countries, and Japan requested that China first reform various tariff policies, including tariff reductions, open markets and industrial policies.

United States role[edit]

The United States acted as a dominant power in the international economy and strongly supported an open system. They had a great interest in China because it was one of the fastest growing markets for U.S. goods and services. U.S. imports from China almost doubled within five years from $51.5 billion in 1996 to $102 billion in 2001.[3] The United States imposed additional conditions on China and so there were, from a Chinese perspective, both positive and negative aspects linked with admission.

Chart showing U.S. goods imports from and exports to China. This chart does not include trade in services, which also factors into the overall trade surplus or deficit.


These changes were difficult steps for China and conflicted with its prior economic strategy. Accession meant that China would engage in global competition according to rules that it did not make. China's admission was "an enormous multilateral achievement" that marked a clear commitment towards multilateralism.[4]

When China joined the WTO, it agreed to considerably harsher conditions than other developing countries.[5] After China joined the World Trade Organization (WTO), the service sector was considerably liberalized and foreign investment was allowed; restrictions on retail, wholesale and distribution ended.[6] Banking, financial services, insurance and telecommunications were also opened up to foreign investment.[7] Furthermore, China had to deal with certain concerns linked to transparency and intellectual property that the accession to WTO underlined.[8][9]

Other related WTO members[edit]

See also[edit]


  1. ^ "WTO | Accessions: China". Retrieved 2018-08-06.
  2. ^ Hasmath, Reza; Hsu, Jennifer Y. J. (2007). "Big Business, NGOs and Labour Standards in Developing Nations: A Critical Reflection". Asian Journal of Social Policy. 3: 10. SSRN 1367296.
  3. ^ "Foreign Trade - U.S. Trade with China". Retrieved 2012-07-06.
  4. ^ Schumpeter Business and management (5 December 2011). "Money talks: An enormous multilateral achievement". The Economist. Retrieved 2012-07-06.
  5. ^ Bransetter, Lee (2008), "China's embrace of globalization", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge, UK: Cambridge University Press, p. 655
  6. ^ Branstetter 2008, p. 657
  7. ^ Branstetter 2008, pp. 658–659
  8. ^ Farah, Paolo Davide; Cima, Elena. China's Participation in the World Trade Organization: Trade in Goods, Services, Intellectual Property Rights, and Transparency Issues. SSRN 1527992.
  9. ^ Farah, Paolo Davide; Cima, Elena (Spring 2010). "The Implementation of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) in China". Tsinghua China Law Review. 2: 317–351. SSRN 1679999.