The PRC is now a member of the WTO and very much part of the globalization process - Discuss the implication of this for maniland China, the regions and world trade.

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The PRC is now a member of the WTO and very much part of the globalization process.  Discuss the implication of this for maniland China, the regions and world trade.

After 15 years of negotiations, trade ministers from across the world have officially approved China's entry into the World Trade Organization (WTO) in December 11 2001.1  China's formal membership comes exactly one month after the 142 members of the WTO ratified its application at the world trade talks in Doha in the Gulf state of Qatar, and the Chinese government formally approved the deal.2  However, adapting to the negotiated WTO package will be only part of the major changes.   China was too advanced in some sectors for WTO member countries to be comfortable giving developing country status that brings with it loose timetables and “differential and more favorable treatment” for meeting WTO obligations.3  But China was also not a developed economy by most measures, as its delegation endlessly pointed out.   Hence every aspect of China’s entry has been carefully negotiated, adding to the time it has taken for China’s application to be completed.  In the end, the full protocol was thousands of lines of tariffs and specific agreements covering approximately 1500 pages. 4

China’s leaders’ push towards joining WTO over a decade and a half is remarkable in the light of difficult transition challenges and serious opposition at home. We still do not have a full understanding of the internal bargaining that allowed for such a serious renewed push to join WTO.  It may be due to factors of both economic and political, which probably played a role in

tipping the scales back toward membership. 5

Under China's WTO accession agreement, China made substantial market access commitments covering the agricultural, industrial and services sectors:

(1)Phase-out of non-tariff barriers on imports - Import license requirements will be eliminated within five years of accession, and all quotas will be phased out within five years of accession. 6

(2)Tariff cuts - average import tariffs for industrial products will be lowered from currently 14.8% to 8.9% by 2005, and average tariff for agricultural products will be cut to 15% by 2004. 7

(3)Conditions on foreign investment - The WTO Agreement on Trade-related Investment Measures (TRIMs) will be implemented, requirements on trade and foreign-exchange balance, local content, and export performance will be ceased or eliminated.8 

(4)Trading rights - China agrees to provide trading rights to foreign companies, to be progressively phased in over three years.9  Majority ownership in wholesale joint ventures will be allowed within 2 years of accession with no geographic or quantitative restriction by then. 10  There will be no geographic, quantitative, equity/form of establishment restriction in retailing within 3 years of accession.11 

(5)Open-up of other services - China has also agreed to relax foreign investment restrictions on many important services industries, including distribution services, telecommunications, financial services, professional services.  Foreign firms can also provide accounting, management consulting, architecture and engineering services.  In return, quota on China’s textile and clothing exports will be removed by 2005.12  For value-added services in telecommunications, foreign partners will be able to own up to 50% with no geographic restriction within 2 years after accession. 13  For mobile voice and data services, foreign operators can own 25% upon accession, and rise to 35% one year after accession and further to 49% after 3 years. 14  Foreign banks will be able to conduct local currency business with Chinese enterprises 2 years after joining the WTO, and all geographic and client restrictions will be removed within 5 years after accession. 15  For non-life insurance, branch or JVs with 51% foreign ownership will be allowed upon accession. Wholly-owned subsidiaries will be allowed in 2 years. 16  For life insurance, JVs with 50% foreign ownership will be allowed upon accession. 17 

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In my essay, I will intend to describe the following perspectives in term of China’s role in the globalisation process :-

(1) Why China’s party desire to push towards joining WTO?

(2) How doe it affect China’s economy itself?

(3) How does it affect the political system in China?

(4) Highlights the most significant relationship with regions

(5) Conclusion

(1) Why China’s leaders desire to push towards joining WTO?

Since mid-1980s, there was only minor progress has been made and only few plans have been initiated to restructure and revitalize state-owned enterprises . It may ...

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