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

Conflicts Engulf Christians in the Middle East

Research finds an increase in faith-based hostilities, and Christians are facing persecution in a growing number of countries in the region More

Chinese Americans: Don’t Call Us 'Model Minority'

Label points to collective achievement, but some say it triggers resentment, unrealistic expectations More

Iran Bolsters Surveillance of Phones, Internet

Does increased monitoring suggest the government is nervous? 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.
Survivors Commemorate 70th Anniversary of Nazi Liquidation of Polish Ghettoi
X
Kane Farabaugh
August 30, 2014 1:20 AM
When the Nazi army moved into the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Polish Ghetto

When the Nazi army moved into the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.

AppleAndroid