China Financial Daily

Benefits of China entering WTO from economic growth, industry structure, employment
China was accepted into the World Trade Organization (WTO) and became a full member in Year 2006. How will China joining the WTO affect China and how will it affect the rest of the world? I am sure many of us are keen to learn and understand how much of an impact WTO and China will have.

With its accession to the World Trade Organization (WTO) on December 11, 2001, China became one of the last major trading nations to join that organization. And the message to the world was clear: China is prepared to become a fully vested player in the global economy. WTO membership will generate tremendous benefits for China — expanding trade, spearheading further economic reform, attracting even higher levels of foreign investment, and fostering the rule of law.

At home, WTO membership will undoubtedly thrust significant responsibilities and challenges on the Chinese leadership and the Chinese people. Abroad, it will fundamentally redefine China’s relations with other countries, especially with the United States, its most significant export market, not to mention its neighbors in the Asian region.

One thing is certain: The changes wrought by China’s WTO accession will reach far beyond just the trade-related aspects of its relations with other countries, engendering many benefits as well as challenges. How best to bolster the benefits and mitigate the risks remains a subject of considerable debate among policy planners, business people, and consumers.

The last ten years since China’s accession into the WTO, was not only the best and rapidest development period for China, but also a period during which China positively integrated with the world and strived to realize the mutual benefits and win-win outcomes as well as shared development with countries from Asia and the rest of the world, making great contributions to Asian and global economic growth.

Since China’s accession into the WTO, China positively integrated with the world economy and shared benefits and advantages with other countries. China has become the emerging market with unprecedented scale and rapid growth which has been the important driving force and source of the economy of Asia and even the whole world. In the last decade, China’s import increased by 5.2 times, ranking second in the world. In 2010, China’s import of goods was close to US$1.4 trillion, taking up one tenth of the world total. China has become the first largest export market for Japan, Australia, Brazil, and South Africa. Besides, China’s accumulated utilization of foreign capital exceeded US$1 trillion, being one of the countries with the most FDI in the world. Both in 2009 and 2010, China’s contribution to the global economic growth was over 50%.

China’s economic growth is closely linked with the economic growth in Asia. Half of China’s foreign trade is made with other Asian countries. In 2010, China’s foreign trade with Asian countries amounted to US$1.5 trillion, up by 4.5 times compared with that a decade ago, the annual growth in average being 21%. Six of China’s top 10 trading partners were from Asia. Meanwhile, China’s is the largest trading partner of Japan, ROK, DPRK, Mongolia, Vietnam, and Malaysia. Moreover, China and ASEAN established free trade area and realized the zero-tariff measures overall. China has now become the first largest export destination of ASEAN. In addition, China collaborated with other Asian countries to take use of own comparative advantages to jointly take part in deepening the global industrial division and share the benefits.

China’s accession into the WTO proved that nothing but opening-up could seize the opportunity of the economic globalization and nothing but opening-up integrating with domestic development reforms could ensure the practical benefits from the globalization. It is clearly proposed in the 12th Five-Year Plan to implement the “open strategy of mutual benefit and open wider to the rest of the world”. In the next decade, especially in the period of the 12th Five-Year Plan, as to foreign trade and economic development, China will attach equal importance to imports and exports by expanding the import while stabilizing the export, and equal importance to foreign investment and outward investment by encouraging China’s enterprises’ outward investment while stabilizing and increasing foreign investment.