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| December 1999: Director's column: China WTO |
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| Opportunities and challenges ---
On the bilateral agreement of China -WTO membership between China
& USA |
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| Thirteen years after China started the process of negotiation to
re-enter the World Trade Organisation, China and USA signed a bilateral
agreement on 15th November 1999 ending years of disagreement and removing
the biggest block to China’s WTO accession. Many now predict that
China will become a WTO member in the early half of next year. Chinese
President Jiang Zemin remarked: “If there is a will there is a Way.”
USA President Bill Clinton was delighted: “The China - WTO agreement
is good for China, good for USA and good for the economy of the world. |
| Becoming a member of WTO means China will enjoy all the privileges
and bear the responsibilities that other members have. Chinese market
become more and more in line with the international practice, increase
improve its overall invest environment. In all it will prove to be
a milestone in the history of China’s economic reform. To the developed
economies, the concessions China has make in the agreement will create
enormous new opportunities for businesses in the sectors of finance,
IT, communication, retail, agriculture and others. It will also present
new challenge to those western investors already in the Chinese market. |
| The benefits of becoming a member of WTO to China are the increase
of export in certain sectors (such as textile industry), the improvement
of investment conditions, and the enhancement of efficiency. However,
there are many challenges resulted from the consequences of this agreement.
Firstly, many state-own-enterprises that are running at lost will
lose their market and face closure, leading to the increase of unemployment.
Secondly, many industrial and service sectors will face tougher competition;
Thirdly, the current administrative procedures and management schemes
might conflict with the new changing conditions; Fourthly, the rapid
changes of market conditions will present new issues and problems
for social security system and people’s life. All of all, controlling
unemployment will be the biggest challenge. To summarise, the accession
to WTO for China will benefit the Chinese economy in long term. But
in the short term, whether the benefits outweight the disadvantages
will depend on if the increasing employment can be absorbed by the
new development created by increasing investment and improved efficiency.
The next few years will be the key period to decide if Chinese market
economy can leap up to a new higher platform of development. |
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