China Joins the WTO
China joined the World Trade Organization on 11 December 2001, after fifteen years of negotiation that had begun with an application to rejoin the GATT in 1986. The terms were unusually demanding. China cut average tariffs from around 15 per cent to under 10, opened banking, insurance, telecommunications and distribution to foreign firms on a timetable, abolished most import quotas, and accepted transitional provisions no other member had faced — a special safeguard permitting members to restrict surging Chinese imports, and a non-market economy clause making anti-dumping cases easier to bring against it for fifteen years. Zhu Rongji drove the accession partly to force domestic reform. Membership was the external commitment that made restructuring the state enterprises and the banks politically possible. The consequences exceeded almost every forecast. Chinese exports rose roughly sevenfold in the following decade; its share of world manufacturing went from about seven per cent to nearly thirty; and it became the largest trading nation by 2013. The effect on employment in importing countries proved larger and more concentrated than trade economists had predicted, and the finding that displaced workers did not move to new industries or regions — the China shock literature — reshaped the politics of trade in the United States and Europe. The expectation that economic opening would bring political liberalisation did not hold. Disputes since have centred on subsidies, state enterprises, forced technology transfer and the rules the WTO does not cover, and the appellate body has been paralysed since 2019. Whether China's undertakings were honoured, and whether the terms were the right ones, is now the central dispute of the trading system. Almost nobody in 2001 forecast either the scale or the political reaction.
- Year: 2001 CE
- Category: Diplomatic
