Two Decades of China in WTO
by Muhammad Asif Noor
This year, China is celebrating two decades of its exceptional presence in the World Trade Organisation (WTO). Since joining the WTO in 2001 as one of the most active members, China's entry into this important global financial trade body was considered as one of the most historic moments at the advent of the 21st century. It is believed that China's entry into the world markets and economic landscape especially through WTO was far more decisive than the momentous 9/11 event that has transformed the way the world is operating today. On the day when China's membership was approved, the then Director-General of WTO stated that this day would be remembered as one of the most significant events of the 21st century. Over the past two decades, the Chinese economy has evolved and shaped a unique eco-system of supply chains. China has emerged from being only a periphery country in the global trading system to an international economic and trade titan. This anniversary is arriving at the time when China declares triumph against extreme poverty.
The grand forty years since the reform and opening-up starting in 1978 is a glorious chapter setting China's economic base for impactful global presence in later years. It was a time of great challenge for the country as there was widespread poverty, disease, famine, and wars. It was the visionary leadership of the Communist Party of China that has steered the nations to a new beginning. China used to account for 1 percent of the global trade. But after the opening-up initiative, China emphasized on strengthening its economy and trade base with a focus on the people. This model has taken gradual shape with its wide-ranging, comprehensive, and multilevel approach in the reform. By bringing forth domestic prosperity, China has made a substantial contribution towards regional and global peace and prosperity. China began connecting its economy with the global supply chain to facilitate trade and investment.
The entire process of China’s accession to WTO took 15 long years to build convergence between China’s and the global trading regimes. First, in 1986, China joined the General Agreement on Tariffs and Trade (GATT) to promote its foreign trade. During this period and later, the Global Value Chains (GVC) has boosted China’s exports. In the 90s, the global industrial revolution began after the advent of communications, technologies, information, and high-tech transport and logistics systems. In 1995, GATT was transformed into WTO. WTO has primarily three important functions i.e. to serve and facilitate trade negotiations, monitor if the countries are following the compliance, and resolve trade disputes. Soon after, China bid for its membership and became part of the important multilateral organisation.
After its accession to WTO, China thus far has contributed immensely and with a sense of responsibility strictly following WTO rules and regulations. China’s presence in WTO is helping the country’s products and services access the global market with less tariff barriers, hence increasing its global trade. In fact, WTO membership has also helped China manage the global economic and trade disputes with other countries, protect its due right under international laws and the global economic systems. There are scores of examples that can be quoted to show that WTO regime has provided assistance to China in removing illegal restrictions.
China will continue to lead the global trading trends as a result of its consistent growth, commitment, global outreach as a result of the Belt and Road Initiative (BRI), and strict compliance to the global trading and economic infrastructures. Through its strong base on global supply chains, strong industrial base, thriving special economic zones, forward-looking policies, the Chinese economy is maturing and becoming resilient that can weather global economic shocks. For instance, although there is a global economic slowdown as a result of the COVID-19 pandemic, the Chinese economy is on track with full swing. With its presence for the past 20 years in WTO, China has provided much-needed strength in the global economic regimes. With the wisdom and vision of creating a community of a shared future, China has spread positivity with a focus on supporting humanity. This “Asian Century” is truly a Chinese century as the country rose to the global trade and economic stage with a bang after becoming a trade and export powerhouse, soon after joining WTO.
The writer is Director, Institute of Peace and Diplomatic Studies