China's WTO entry 'changing the world'

Updated: 2006-12-10 11:48

Beijing - China will mark its first five years in the World Trade Organization with 16 hours of live television broadcasts Monday. Given the global impact of Chinese membership, perhaps the whole world should be watching, analysts say.

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China has moved to a position as the world's third-largest trading nation, up from sixth when it entered the WTO in 2001, embedding the nation seemingly irrevocably in the global economic system.

"Because China's economy is more open, and China's economic size is much bigger, the world is more sensitive to what's happening in China," said Long Yongtu, China's former WTO chief negotiator. "I think in that way China is really changing the world."

Long's counterpart during months and years of arduous negotiations, former US trade representative Charlene Barshefsky, agreed.

"China is no longer a bystander in the world economy," she told China's Xinhua news agency in an interview. "It has become an important hub in the global economy."

Much attention has been paid to cheap Chinese shoes and textiles flooding Europe and the United States, and the way underpaid Chinese labor may threaten to wipe out entire industries abroad.

Roughly one third of all anti-dumping cases in the world currently target China.

"There are many products where China is dramatically increasing its market share in major overseas markets, and the industries there are under pressure," said Cliff Stevenson, a British expert on anti-dumping issues.

"For the next four or five years, at least, China will have to be resigned to the fact that other countries are going to use protectionist instruments to ease the transition of the domestic industries," he said.

Chinese researchers acknowledge the growing backlash that the nation's hyper-efficient producers trigger abroad, but many also seem mildly puzzled by the reaction.

"China's growing exports have improved the lives of people abroad, because our products are so cheap," said Hu Xingdou, an economist at the Beijing Institute of Technology.

Others put the motives for the foreign backlash down to a mixture of real anxiety and political calculation.

"Most people who say China in the WTO is a threat come from countries that have industrial structures very similar to China's," said Deng Shurong, a researcher with the Beijing WTO Affairs Center, a government-linked think tank.

"China's labor costs are very low, and that poses a huge challenge to them. But of course, in the United States, politicians also use this for tactical purposes," he said.

But foreigners also tend to underestimate the price China itself has paid for WTO membership, observers said.

Chinese import tariffs on beef are down to 12 percent from 50 percent, on barley from 114 percent to just three. On automobiles, they used to be as high as 100 percent, and now they are 25 percent. The list goes on.

"WTO is less about China's exports and more about China's imports. It's more about China lowering its barriers," said David Zweig, an expert on China's transnational relations at Hong Kong's University of Science and Technology.

Foreign companies also do not sufficiently take into account the beneficial impact of cheaper Chinese products in an increasingly interdependent global economy, some analysts argued.

"Chinese suppliers are fantastic for European and US industry. They provide cheap components, cheap raw materials. They allow European and American industries to be much more competitive themselves," said Stevenson.

"Cheap imports from China are not only a threat. They are also an opportunity."

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