pros-and-cons-after-china-entering-WTO.docx

AfterenteringWTOandsomeeconomicIntegrationorganizations,whatadvantagesanddisadvantageswillChinaconfrontwith?After15yearsofnegotiation,andmakingmaximumconcessionstoWTOmembers.ChinaeventualtygainedaccessiontotheWTOin11thDecember2001.TheChineseeconomyisnowsubjecttotherues-basedsystemoftheWTO1enhancingeconomiccompetitionandcreatingamoreopenenvironmentfortradeandforeigninvestment.NowwewilltalkabouttheadvantagesanddisadvantagesthatChinawillconfrontwithafterenteringWTO.Advantages:1. China'sbroadmmitmentsinstreamliningsubsidies,liftingpricecontrols,providingeffectivejuridicalprocedures,makingtransparentthedecisionmakingprocess,allowinggreaterparticipationoftheprivatesectorineconomicactivities,willassistgreatlyChina'stransitionfromastillheavilyregulatedeconomytoarues-basedmarketeconomy.AlltherulesandregulationoftheintegrationorganizationlikeWTOwhicharenegativetoregulatedeconomycountrywillalsourgeChinatoreformandchangetomarketeconomytogainmorebenefitthroughworldtrade.2. China'saccessiontotheWTOandotherintegrationorganizationmeansapplicationofclearandcrediblerulesinChina'scommercialrelationshipwithotherWTOmembers,itwillmeanmoreexternaltrade,andexternaltradeofabetterquality.Therewillbesubstantialta11ffreductionsamongChina'sexistingtradingpartnersandtherewillbeaccesstomoretradingpartnersforChina.ThismeansmorepredictableandstablecommercialrelationshipwithChinastradingpartners.3. Chinawillbecuttingitstariffsonabroadrangeofproducts,fromagriculturaltoindustrial.Tariffreductionsallowcomparativeadvantagegreaterplay.Thetaskwasnotalwayseasybutthroughoutthispe11odwehaveseenChina,inimplementingthetermsofitsaccessiontotheWTO.progressivelyloweritstariffs,phase-outnon-tariffmeasuresandreducerestrictionsontradeinservices.Intradeingoods.China'ssimpleaveragetariffratedroppedfrom42.9percentin1992to10.4percentatthebeginningof2004.ThecuttingofIarrtfsandthecancelingofkindsofrestrictionofimportwillbringmorebothindustrialandagriculturalproductstoChinawithmuchlowerprice,throughwhichincreasethewelfareofChineseconsumers.4. IncreasedforeigncompetitionintheareasabovewillforceChineseenterprisestospeeduptheirreformstomeetthechallenges.Fromalargerandlongerperspective,furthereconomicliberalizationandintegrationintotheglobaleconomywillundoubtedlybeastimulustoregulatory,institutionalandculturalchangewithinChineseenterprises.Withoutparticipatinginintegrationorganization,thespeedofreformandimprovementofChineseenterpriseswillbemuchslower.Especially,itwillhelpthedevelopmentandimprovingtheCompetivenessofChineseserviceindustry.Theboundarybetv/eenthemanufactureandserviceindustriesisbecomeincreasinglyvague,asmanufacturers,especiallyindevelopedcountries,combinemoreserviceswiththeirproducts.ChinaisnowataCritiCalphaseamjeconomicglobalization,agreatopportunitytodevelopitsownserviceindustryandtransferservicesandproductsfromhighquantitytohighvalue.5. MoreforeigncompaniesstreamingintoChina,whichnotonlyhelpingsimulateChineseeconomyandtechnology,butalsoprovidingahugesumofjobopportunities,which,inasense,willreleasetheunemploymentproblemofChina.AndalsoconnectingtotheWOridwillbringChinamoreinternationaltalents,theyincludestudentsstudyoverseaandforeignprofessorswhoarejustneededintoday'sChina.6. ItimprovestheoverallenvironmentinwhichChina'seconomyoperatesandInwhichChina'sforeigntradeisconducted.Someanalystsexpectcertainsector-specificbenefits,e.g.,possibleincreaseoftextilesandapparelexportsduetotheapplicationofquotaeliminationandincreasedquotagrowthforChinabyrestrainingcountries;apossiblerushofforeigninvestmentsintoChina,thusboostingemploymentandeconomicgrowth.7. HongKong.Macao,MainlandChinaandTaiwanhaveenteredWorldTradeOrganization(WTO)oneafteranotherinaccordancewiththeWTOprovisionsonmembership.Asituationof"onecountry,fourseats'inWTOhasemerged.Therelationsamongthe-fourseatsinonecountry"arenotonlycharacterizedbyequalmembershipwithinWTO.butalsobydifferentcustomsregionswithinasovereignState.Itisarguedthatthe,onecountry.fourseats”situationreflectsthelatestdevelopmentofinternationallaw,enhancestheawarenessofthe,0neChina,PrinapleininternationalCommunrty.andprovidesnewopportunitiesforMainlandChina,HongKong.MacaoandTaiwantoestablishclosereconomicandtraderelationsamongthemselves.Thegeneralview,nevertheless,isthatWTOentrywillmeangrowth,integrationandglobalizationforthemainland'seconomy.Disadvantages:Ofcourse,injoiningtheWTO,Chinawillbothenjoyitsduerightsandundertakecorrespondingduties,thiswillunavoidablybringcertainpressureandchallengetous.1. Furtheropeningthemarketwillcausesomedomesticproducts,enterprisesandindustriestofacemoreintensecompetition.AfteritsprojectedentryintotheWTO.ChinamustobserveWTOstipulationsonopeningthemarket,thiswillformcertainpressureonthespeedandstepsofouropeningthemarket.Alongwiththeexpansioninmarketaccess,thereductionoftariffsandtheabolitionof11on-tariffmeasures,moreforeignproducts,servicesandinvestmentswillpossiblyenterChinesemarkets,domesticenterpriseswillfacefiercercompetition.2. China'sforeigneconomicandtrademanagementwill,toacertainextent,besubjecttotherestrictionofWTOrules.China'scurrentforeign-relatedeconomiclaws,regulationsandpoliciesstilldonotcompletelynformwiththestipulationsofWTOregulations,althoughthisisalsoanimportanttaskinChina'sefforttodeepenitseconomicandtrademanagement,therestillexistmanyareasofnceptualandinstitutionalinadaptability.Thereisstillabigdisparityintheworkingmethodsofgovernmentofficesandmanagerialpersonnel.3. Theadjudicationonthesolutionofmultilateraldisputesmaypossiblyproduceresultsunfavorabletous.ChinalacksexperiencesindealingwiththemultilateraldisputesandahvaysfailstoprotectitslegitimaterightsandinterestsbyusingtheregulationsandlawsofWTOproperty.Forexample,ChinahassufferedfrombeingwronglyaccusedofdumpingitsproductstoothercountriesbyIheantidumpingorganizations,resultinginalargelosstotheexportenterprisesinChina.4. AfterenteringWTO.theturmoiloftheworldeconomyandmarketwillexertsamoredirectanddeeperimpactonChina,makingitmoredifficultforChinatoregulateandcontrolthemacroeconomicsandtopreventthefinancialrisks.BeingamemberofWTO,Chineseenomicwillbepartoftheworldenomicsandbemoredependentoftheforeigntrade.Meanwhile,theChinesefixedassertinvestmentwillbemoredependentofIheinternationalassertmarket.Especiallytheserviceindustrywillbeinfluencedtoadeeperdegree.Themonopolystatuswillbebrokenupandthemarketwillbeseparatedandmanyserviceenterpriseswillcollapseinthisprocess.Therefore,theshockintheinternationalcommoditymarketandtheinternationalassertmarketwillinfluencetheChineseeconomicstoalargerdegree.5. Chinamakesapromisethatitwillcarryoutamoresubstantialreductionofthetari«afterenteringtheWTO.whichmakestheimportincreaserapidly.In2005,theaveragetariffofindustrialproductsdecreasedto9.4%whilethatoffarmproducefellto17%.ThequotaonimportproductsandIhelicensesystemwillbecancelledinthefuture.WithmoreforeignproductsenteringintotheChinesemarket,someindustrialsectorsmaybeshocked,especiallythemonopolyindustriesthathavebeenprotectedbythegovernmentandlackofcompetitiveness.Someserviceenterprisesmayevenfacetheriskofbankruptcy.Forexample,asignificantincreasentheimportsoffarmproducewillhavenegativeimpactonChina,alargeagriculturecountrywhoseagriculturehasnotmodernized.Whafsmore,therapidgrowthofimportswillleadtoatradedeficitthatimpactsthebalanceofourpayments.6. EnteringWTOwillalsoexertacomplicatedinfluenceontheemploymentinChinatherebypittingaburdenonourcountrywhichisabundantofIaborforce.Intheemploymentstructureaspect,theagricultureandthesecondaryindustrywillemploymuchlesspeoplewhitetheserviceindustrywillneedmore.However,inthelongrun,theemploymentwilldecrease.ItremainsabigproblemthatatleastIOmiIlionlaborforceintheagricultureindustryaresupposedtochangeintotheserviceindustry.7. Thestate-ownedenterpriseswillfacestiffchallenge.Owingtothehistoricalandinstitutionalreasons.Chinahasnotestablishedthemodernenterprisesystem.Comparedwiththemultinationalcompanies,mostofourstate-ownedenterprisesarelesscompetitiveintheareasofeconomicofscales,developmentoftechniquesandmodernmanagement.Thosestate-ownedenterprisesthatlackfunding,technologicalinnovation,scientificmanagementandeconomicsofscaleareboundtocollapse.Asaresult,thestate-ownedenterprisesarehardtosurviveInthefierceinternationalcompetition.Inaconclusion,enteringWTOisatwo-edgedswordtoChina.ChinashouldtaketheinitiativetoworkoutcountermeasurestomeetthechallengesandtakeadvantageoftheOppoHunitiesintheWTO.