China and the WTO: Giant — or Panda?

What can the world expect from China’s WTO membership?

November 13, 2001

What can the world expect from China's WTO membership?

After years of negotiations, Beijing is finally a full-fledged member of the World Trade Organization and able to send ambassadors to WTO meetings and to the organization’s headquarters in Geneva, Switzerland. Our new Globalist Factsheet takes a closer look at China. What can the world’s trading nations expect from the country — and what will the WTO mean for China?

How long has China been trying to become a member of the World Trade Organization?

It has been 25 years since China first applied to join the multilateral trading system called GATT — now known as the World Trade Organization.
(The Economist)

What is involved in the admission process?

The treaty which regulates China’s entry into the World Trade Organization is more than 1,000 pages long.
(Washington Post)

What does the WTO mean for China’s economic potential?

It is projected that if China sticks to its WTO commitments, China’s economy by 2020 would grow to $10 trillion (in 2000 dollars) — making it the size of the U.S. economy today.
(The Economist)

How reliable are such predictions?

Back in 1992, the World Bank predicted that by 2004 China’s GDP would be larger than that of the United States.
(New Yorker)

What Chinese industry can expect the biggest changes from China’s entry into the WTO?

With China’s accession to the WTO, tariffs on imported vehicles are set to decline from a June 2000 range of 80% to 100% to 25% by July 1, 2006.
(Wall Street Journal)

Who are China’s biggest trading partners?

As of 2001, at $74 billion the United States is China’s second-largest trading partner, after Japan at $83 billion.
(IMF)

How does Europe figure in that equation?

In 2001, China’s trade with Europe is worth $69 billion.
(IMF)

How important is China to the United States?

As of 2001, at $109 billion U.S. exports to Mexico are worth more than the $81 billion worth of exports to Japan and China combined.
(IMF)

Are China’s state-owned firms participating in the restructuring?

Between 1996 and June 2001, China’s state-owned companies laid off 45 million workers.
(Zurich Financial Services)

What is China’s unemployment rate?

As of mid-2001, urban unemployment in China is estimated to be at least 8%, while rural underemployment stands at around 30%.
(The Economist)

How educated is China’s labor force?

In 2001, China’s labor force contains more engineers than the rest of Asia combined.
(Asiaweek)

What is a major demographic challenge for China?

70% of China’s population still lives in the countryside.
(The Economist)

What role does China’s private sector play in the economy?

In 2000, China’s private companies created 4.6 million jobs.
(Washington Post)

How important are foreign companies for China’s economy?

As of 2001, foreign companies in China produce almost half of the country’s exports.
(Zurich Financial Services)

What role does the renegade province Formosa — better known as Taiwan — play?

In 2000, Taiwanese manufacturers in the southern Guandong province alone produced almost 4% of China’s total exports.
(Asiaweek)

Has business been profitable for foreign companies in China?

As of 1999, only 40% of multinational corporations doing business in China had turned a profit.
(A.T. Kearney)

How sound is the local banking system?

As of 2001, the Bank of China — the country’s largest foreign currency deposit-taking banks — retains a non-performing loan ratio of 28.8%. The average among the other three banks is 55%.
(Asiaweek)

And what about property in communist China?

As of 2001, only 5% of households in China’s capital Beijing own their own homes, compared to 10% in Shanghai.
(Asiaweek)

Are the Chinese still big bicycle riders?

China, with 43 million units, manufactured almost half of the world’s bicycles in 1999.
(Worldwatch Institute)

And finally, where is China already playing with the big boys — economically speaking?

As of 2001, only seven economies in the word produce more than $1 trillion in output every year: France, Italy, Germany, the United Kingdom, China, Japan — and the United States.
(Greater Dallas Chamber of Commerce)