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China & its Relations With WTO
June 26, 2007
Group 2: Mylene Ferrer Mia Lacson Joy Angsioco Eric Bautista Bobby Reyes
World Trade Organization (WTO) Only global international organization dealing
with the rules of trade between nations Its main function is to ensure that trade flows
as smoothly, predictably and freely as possible At its heart are the WTO agreements,
negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments
150 member countries (as of Jan 2007)
WTO Trading System Benefits System helps promote peace Disputes are handled constructively Rules make life easier Freer trade cuts the costs of living Provides more choices of products Trade raises income & stimulate growth Basic principles make life more efficient Governments are shielded from lobbying System encourages good government
US-China Agreement
US Unprecedented access to
the Chinese market for both U.S. exports and investments
China Substantial
concessions Remove political
embarrassment of Congress’ annual scrutiny of its human rights, labor, and environmental record.
China in WTO-China’s Responsibilities Tariff reductions Service commitments and systematic reforms Right to import from & export to customers in
China directly within 3 years Right to export to China without establishing
an investment presence there Phase out of NTM such as quotas/licenses Elimination of state-trading import monopolies
for agricultural and industrial products
China in WTO- Advantages Sustain the pace of economic growth and reform It will be able to defend its trade interests It will make China more attractive to foreign investors Improve wages and workers’ rights Increase competition
- benefit consumers by having a larger range of choices- benefit the economy as competition fosters gains in efficiency and productivity
Consumers and companies alike will benefit from an expanded rule of law as China implements its WTO commitments
China in WTO- Disadvantages WTO entry will increase competition within
China Intensified competition may lead to increased
job losses in the short run WTO entry will not likely promote
democratization in China in the short run
WTO China Updates
PBOC raised based lending rate by 0.18% points
Reserve requirement ratio of banks was raised by 0.5% points
Fixed Assets investment grew by 18% Added value industrial output grew by 18% CPI went up by 2.8% Number of private firms increased to 4.9 Mn
WTO China Updates
China in WTO after 5 years
WTO entry boosts China’s economy Legislative process aids democracy Foreign retailers gain bigger market share in
China Vehicle imports experienced rapid increase Remarkable progress in economic opening