News / Asia

China WTO Anniversary Marked by Progress, Challenges

Forklift arranges shipping containers near Shanghai port, China, March 2, 2011 (file photo).
Forklift arranges shipping containers near Shanghai port, China, March 2, 2011 (file photo).
William Ide

It was 10 years ago this Sunday, Dec. 11th, when China joined the World Trade Organization.

Since then, the country has grown to become the world's second largest economy and millions of Chinese have been lifted out of extreme poverty. But while China made dramatic reforms after joining the global trade club, analysts say the process of moving away from being a state-planned to a more open economy has not been a definitive success, and many challenges remain.

The view from Beijing

From China’s perspective, the past decade has been a period of historic change.

According to a recent opinion piece in the state-run China Daily, since becoming a WTO member, China has become the world’s number one investment destination, with outbound investment nearly doubling every two years since 2002. Chinese companies, the article adds, are increasingly making their mark, with 54 now listed among the world's Fortune 500 companies, compared to 12 when it joined in 2001.

Such rapid growth has had a dramatic impact on the global economy and surprised Chinese officials.

"I have to say that exceeds far more what we expected at that time, especially the size of China's economy, the size of China's exports and imports, and the market expansion of some of the industries, like cars, from two million to 18 million within ten years," says Long Yongtu, chief negotiator of China’s accession to the WTO.

Lingering U.S. trade deficit

But China's economic rise comes at a cost to the United States and other traditional manufacturing nations. The country's massive production of inexpensive exports means other nations' goods are undercut, causing their industries to suffer.

U.S. exports to China are growing, but the trade deficit with China has boomed. There is also concern among WTO member nations that while Chinese companies are gaining more access to the global economy, foreign companies in China are having a different experience.

Michael Punke, U.S. ambassador to the World Trade Organization, says that over the past five years other members of the WTO have seen a troubling trend of intensified state intervention in the Chinese economy.

Many of the trade disputes with China can be traced, he says, to Chinese policies that promote or protect state-owned and domestic enterprises.

Patrick Mulloy, a member of the U.S.-China Economic and Security Review Commission, says the issue of forced technology transfers - the contract-based acquisition rather than domestic development of new technologies - is of particular concern.

"The government will say, you want to be a friend of China, put more manufacturing here, put more research and development here, be a friend of China, help us grow our economy," he says. "And the companies will say, 'Well, I might be able to afford to give them this type of technology because I am really holding this part back,' but then you have 100 companies transferring technology and helping China move up the food chain. It’s good for China and if I were them I would be doing the same thing, but it’s not good for us and it’s contrary to China’s WTO commitments."

Investor complaints

Foreign companies operating in China frequently raise concerns about the myriad licenses that businesses are required to apply for, and the problems faced receiving them in a fair and timely manner.

Undervaluation of Chinese currency has also long been considered an obstacle to free trade, and U.S. lawmakers are working to pass legislation that seeks to punish Beijing for keeping its currency artificially low, which makes the cost of its exports cheaper.

China's industrial subsidies also remain a contentious issue, which, competitors say, make its products cheaper and more attractive to buyers.

And despite Beijing’s 2006 pledge to allow foreign credit card companies access to its market, they have yet to deliver on the promise.

Mulloy says such barriers to trade demand action.

"These are things this country really has to get to grips with and understand," says Mulloy. "China is not our enemy, but they have a strategy and they are moving their people up a food chain of economic growth as quickly as they can and we have no counter strategy and that’s our problem."

A topic of debate

With U.S. unemployment high and the economy waffling, trade with China has become an increasingly prevalent subject of debate in U.S. campaign politics -- a topic that's likely to persist as the 2012 presidential election draws near.

Mitt Romney, one candidate for the Republican Party nomination, has repeatedly criticized China’s trade practices and says the U.S. is already in a trade war with the world’s second largest economy.

But Daniel Ikenson of the CATO Institute, a libertarian think tank headquartered in Washington, D.C., says these disputes are just part of the process and a good reason to have China in the WTO.

"The relationship is maturing. The world's second largest and largest economy has grown, [and] there are going to be frictions, they are going to be complaints," he says. "We've had many more trade disputes with Europe and Canada than with China. That's the way mature relations settle their differences."

He cites growing social unease in China and the government's ability to maintain control as a greater concern. While China continues to see rapid economic growth, there is also growing public discontent with corruption, environmental pollution and property policies and real estate properties.

If China implodes, Ikenson says, that will really have an adverse effect on the rest of the global economy.

You May Like

HRW: Egypt's Trial of Morsi ‘Badly Flawed’

Human Rights Watch says former Egypt leader's detention without charge for more than three weeks after his removal from office violated Egyptian law; government rejects criticism More

Photogallery Lancet Report Calls for Major Investment in Surgery

In its report published by The Lancet, panel of experts says people are dying from conditions easily treated in the operating room such as hernia, appendicitis, obstructed labor, and serious fractures More

Music Industry Under Sway of Digital Revolution

Millions of people in every corner of the Earth now can enjoy a vast variety and quantity of music in a way that has never before been possible More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Study: Insecticide Damaging Wild Bee Populationsi
X
April 24, 2015 10:13 PM
A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Study: Insecticide Damaging Wild Bee Populations

A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Data Servers Could Heat Private Homes

As every computer owner knows, when their machines run a complex program they get pretty hot. In fact, cooling the processors can be expensive, especially when you're dealing with huge banks of computer servers. But what if that energy could heat private homes? VOA’s George Putic reports that a Dutch energy firm aims to do just that.
Video

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.
Video

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.
Video

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.
Video

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.
Video

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.
Video

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.
Video

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.
Video

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.
Video

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.
Video

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.
Video

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.
Video

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.

VOA Blogs