China and the WTO: Perspectives on a Changing Environment
Three years after China's accession to the WTO, what are the main issues that are determining the pace of liberalization of the economy? And how do the WTO commitments interact with the economic challenges facing China?
Date:
February 2005
Keywords (click to search): [WTO] [WTO compliance] [liberalization] [open market economy] [WTO obligations] [market access] [investment opportunities] [Baker McKenzie] [business development]
By Arjun Subrahmanyan
China's joining of the World Trade Organization (WTO) in 2001 was seen as a landmark event that confirmed China's growing importance in international commerce. At the time, many commentators saw WTO membership as ushering in a new era of openness and transparency in both business arrangements and the legal and regulatory frameworks that govern the Chinese economy.
Three years on, although some of the lustre has worn off China's WTO membership, the central government in Beijing remains as committed as ever to meeting its WTO obligations. At the same time, the country faces the daunting task of making structural changes to the economy and giving broader scope to reformers in the bureaucracies that seek to institute more sweeping changes in state-owned enterprise reform and the banking system, among other areas.
Perhaps the biggest obstacles are in enforcing central government directives and national laws at the local level. In some ways, WTO commitments make no economic sense for local governments to implement, as they are keen on protecting their revenue streams, and see market liberalization as a distinct threat to their existing businesses.
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