China Unbalanced Essay

Decent Essays
Abigail Brown China Unbalanced Write-up International Trade and Development 12/7/12 In 2001 China became a member of the World Trade Organization. China’s accession into this organization had many advantages and disadvantages for the country. Some of the advantages of being a member of the WTO for China was the strong increase in GDP growth rate which the country experienced as a result of the facilitation of trade and the increase in imports/exports. Some of the disadvantages of the membership to the WTO were the negative effects in health care, inequalities in income distribution, and inefficient pension funds. Prior to 2001 China had a robust economy which was growing at an astonishing rate. When China ascended into the…show more content…
The WTO required that China tighten up their legal frameworks and design their legal system to be more transparent for foreign firms which would improve foreign relations. The consequences of the reformed trade agreements were that exports grew by 27% annually and China’s economy grew substantially in subsequent years. The real GDP growth rate increased from 10%- 11% annually. China’s economy had steadily been growing since the late 1970’s as a result of the government’s economic strategies. The strategy which the government subscribed to was an export-led growth strategy. China strengthened its domestic markets and improved its relationships with countries to foster this export-led growth which attributed to the strong GDP growth rate in consecutive years since 1970. Productivity drastically increased in China as a result of the reallocation of capital and labor to more productive uses. There was also a migration of people from rural to coastal regions where there were more resources and opportunities for growth. The labor productivity in China outpaced every other country in the world and the country averaged a 9.5% annual productivity rate between 1997 and 2010. The export-led growth strategy and the increased labor productivity rate were some of the key elements which impacted the strong GDP growth rate. There were some domestic problems which China experienced as a result of the rapid growth in China.
Get Access