Why China Intervenes in the World Trade Organization

Unlike previous years of solely trading goods, the WTO allowed for trade to consist of property and services among different countries. Countries could now be globalized in all goods their country didn’t have through the use of free trade. The process of trading was revolutionized by new developments in technology as more and more countries began to trade.

They proposed that having cheap imports available to buy would not help the Americans who no longer could find work because their industries had moved overseas. By the 1990s, this debate between supporters of free trade and those who wanted to limit trade had become an important part of American politics. China joined the World Trade Organization in 2001. People feared that their trade policies and greater involvement in the global economy will create more poverty and put China’s population at a

Economically globalisation began in 1978 following Deng Xiaoping’s Open Door policy. This opened up China to foreign investment and the international markets. This lead to an influx of transnational corporations, which was advantageous to Chinese companies who benefitted from technology transfer. However, the TNC’s moved to China for its cheap labour and manufacture, which presented an ethical dilemma for China. Leaders had to decide whether to compromise on a lack of investment and poor

With a gross domestic product (GDP) calculated at the equivalent of $11.06 trillion and an average growth rate of 1.84 percent, China has the potential to surpass the United States' economy by the year 2030 (citation 1). China's rapid GDP growth is caused mainly by state investment, high exportation, and successes with e-commerce (citation 2). However, China was not always a country eager to open its doors to economic opportunity. Instead, the government strove to maintain self-dependency and to limit influence from other countries. Through the decades of isolation, many countries attempted to gain trade relations with China. These attempts usually were unsuccessful. It wasn't until the late twentieth century until China began forming the economic

For example, the economic and trade development between the United States and ASEAN will first boost the economic development of ASEAN. With the continuous strengthening of economic and trade cooperation between China and ASEAN, China's economy will also develop continuously. Chinese enterprises are now actively participating in the process of economic globalization through outward FDI. In these countries that have signed free trade agreements with the United States, Chinese enterprises can make good use of favorable local resources and other factors of production to make investments and continuously upgrade their businesses. Own capital and competitiveness, and improve the position of Chinese enterprises in the world.

China has memberships in many international organizations. For instance, China became a member of the World Trade Organization (WTO) on December 11, 2001. Secondly, the World Economic Forum (WeForum)

Globalization is a process that refers to the increased integration between different countries and economies as well as the increased impact of international influences on all aspects of life and economic activity. Over the last 50 years, globalization has had a tremendous impact on the Chinese economy. The impacts brought forth by globalization can be both positive and negative and effect both economic performance, economic growth and the development of China’s economy. Globalization is the main factor responsible for China’s significant growth that has taken place over the last two decades. However, globalization itself is not entirely responsible. The Chinese economy has also implemented strategies which have been very effective in promoting economic growth and development. These strategies include the implantation of“Open door policy”, “Reformation” of China’s agricultural system and joining the World Trade Organisation.

3.4 Political Factors: Politian’s in China are attempting to avoid any acceptance on a leadership role in the world economy. They claim that China is still behind other countries in technology and has much lower power per capita GDP compared the world’s leaders; US. (Leo, 2010). Due to these 2 factors, lack of technology and economic developments, this presents more opportunities for international businesses. The reason being why China maintains to be an eye-catching destination for international markets.

WTO rules and regulations will help smooth out the effect of different policy shifts in various governments; mainly in dealing with the nuisance of the U.S.’s yearly criticism of their human rights record while China attempts to regain MFN status. This greater stability will attract foreign investors in China’s exports and Domestic enterprises. These investors will bring with them new capital, new management, access to global production and distribution, and most importantly new information and technology. These new investors will also help reform China’s economy. Companies will now be punished or rewarded with bankruptcy or new trade depending on their management and profitability. This will motivate companies to stream line production and become more aggressive in their sales.

China is on its way to attaining mega market status as a consumer of technological goods and services. Countries unwilling or unable to compete for a share of this market place put themselves at a substantial competitive and economic disadvantage. The admission of China into the WTO will greatly benefit many companies across the board in the United States. The potential for computer makers, software makers, internet providers and internet service providers are immense and American companies could gain tremendously from their potential. These benefits will not be limited to the big name companies of the United States either. Smaller start-up companies will be on the same grounds now and receive the same benefits as larger firms. The small companies will now be able to sell their products in China where as they could not do so before because of the numerous obstacles that only the larger firms were equipped to maneuver around in China. Thus all businesses working from within the United States will have the fair opportunity to extend their reach into China.

We will begin our analysis of these questions by examining China’s economy at the time of Deng Xiaoping’s accession to power in 1978 and the economic growth strategy he and his successor implemented which ultimately led China to ascension into the WTO. We will then review various conditions imposed upon China by the WTO and how China reacted to those changes and to what extent these lead to China’s current status and interaction

China’s accession to the WTO in 2001 has helped shape its economy to becoming a more predictable environment for trade and foreign investment. Corporate governance and frameworks for business operations and interactions have improved, providing a much more transparent environment. (Deckers, 2004)

The World Trade Organization (WTO) is a global organization that helps countries and producers of goods deal fairly and smoothly with conducting their business across international borders. It mainly does this through WTO agreements, which are negotiated and signed by a large majority of the trading nations in the world. The purpose of the WTO is to ensure that global trade commences freely, smoothly and predictably while also aiming to create economic peace and stability in the world through a multilateral system. This is based and applied to member states, currently 162 countries, that have consented and ratified the rules of the WTO in their individual countries. Simply put, these documents act as contracts that provide the legal framework for conducting business among nations, integrating into a country 's domestic legal system, therefore, applying to local companies and nationals in the conduct of business internationally. For instance, if a company were to open an office or business in a foreign country, the rules of the WTO dictates how that can be done.1

Growth in exports and Foreign Direct Investment (FDI) was extremely important to China’s economic success. During Mao’s last years in power, China was inaccessible to the outside world and this was costing the country growth-wise. Other countries such as Japan and Hong Kong were experiencing rapid growth from exports as shown in Exhibit 6, and China wanted to follow in their footsteps. The country has hard-working and educated people who could help make this a reality and Deng knew this was the next step in helping the country to be among the most advanced and most improved4. The United States has always been a wise contender and is always looking for ways to better its

From Albania to Zimbabwe, many countries have become involved in the World Trade Organization over the years. Any state or customs territory having full autonomy in the conduct of its trade policies may become a member of the WTO, but all WTO members must agree on the terms. This is done through the establishment of a working party of WTO members and through a process of negotiations. All members have joined the system as a result of negotiation and the membership means a balance of rights and obligations. They like the ideas that other members give to them and the security that the trading rules give in. In return, they had to make understandings to open the markets and to go by the all the rules. Those commitments were the outcome of the membership decisions. Countries going through membership are WTO observers. Article XII of the WTO Agreement says that joining to the WTO will be on terms to be agreed between the government and the WTO. Joining the WTO is a process of negotiation, slightly different from the process of joining other international trades.