Essay, Research Paper: Why China Should Be A Member Of The WTO

There is a great possibility that China may join the World Trade Organization. There would be many different effects if it did join. China is the largest economy and trading nation outside the World Trade Organization (WTO). China is the tenth largest trading nation in the world (total trade likely exceeded $350 billion in 1998), with a large economic surplus, second only to Japan. China would benefit greatly from this accession to the WTO, especially in the areas of economy, status, efficiency, and access to foreign markets.
One of the main reasons for China's becoming a member of the WTO is that joining the WTO would help the general population of China in a number of ways, such as improving the economy and living conditions. It would help China avoid economic standstill, increase productivity of economic resources, and stimulate economic growth. Employment would increase, especially in light manufacturing like textiles and clothing. Overall external trade would possibly increase by $56 billion dollars as a result of China's accession to the WTO: $26 billion in increased exports and $30 billion in increased imports. Freer trade also cuts the cost of living, which benefits everyone. More trade raises incomes. The WTO system also encourages good government. WTO membership would give China a more stable access to foreign markets because it would make trade more smooth and undisrupted. With this stability, China will be in a better position to attract foreign investors, some of whom will feel more confident about developing China's domestic market. Whether or not it is export-oriented, foreign investment brings in capital, management, technology, market information, and global production and distribution networks that would link China more firmly to the other economies.
Joining the WTO would help China to become acknowledged as one of the world's great powers. The Soviet Union had been the only major Communist super-power in the world. But after the breakup of the Union, the opportunity had arisen for China to ascend to the role of the leading Communist super-power country. In addition more trade with the U.S. and other powerful countries would help in world relations, making the world safer for everyone. This system would help promote peace too, since disputes would be handled more constructively.
China's entry would give them greater access to foreign markets and offer a larger variety of better quality merchandise to import, and more opportunities for export. Lower tariffs on imports also means cheaper prices that consumers have to pay. Lower tariffs on exports means that more things can be produced and sold, bringing into the country more money. Tariff reductions help eliminate trade distortions and facilitate more efficient distribution of resources among the trading partners, thus further promoting economic growth globally. If China joins the WTO its share in world exports will double in the next five years, from 3.7 percent to around 7.3 percent. Its world imports are expected to rise marginally faster than its share in exports.
China has a few areas of high potential that, with the right help, could greatly aid China's economy. These include telecommunications, financial services, and distribution industries, along with many other technological aspects. If China joined the WTO, many of these would be opened to external investors who would give them further assistance by breaking down restrictive barriers and opening the channels for direct investment and technology transfer from the outside. Also, increased foreign competition in these areas would force Chinese enterprises to speed up their reforms to meet the challenges of outside investors.
China wants to be admitted to the WTO ahead of Taiwan, which is also seeking membership. This would presumably make China considered more important and more powerful, and in a better position for United States support. China insists that it should be entered into the WTO before Taiwan does, and that Taiwan then be admitted as a territory of China. WTO membership for China would help ensure Taiwan's chances of joining the WTO. These two countries are the only two major United States trading partners that are not WTO members. Having both China and Taiwan as members and subject to the same rules and dispute-resolution procedures may reduce the chances that tensions between the two neighboring countries would erupt into military conflict.
The accession of China to the World Trade Organization would greatly benefit all countries involved in the association. It would help a country with a booming population and a less-than-stable economy become one of the great super-powers of the world. With the largest population and largest economy outside the WTO, it would make a noteworthy and beneficial addition to the organization.