Game
The U.S. decision to bypass the WTO over China bodes ill for both By Lan Xinzhen
The United States released on March 1 its 2017 Trade Policy Agenda and 2016 Annual Report of the President of the United States on the Trade Agreements Program. The document says China’s entry into the World Trade Organization (WTO) has undermined U.S. economic benefits, and the United States will reduce its dependence on the WTO trade dispute settlement mechanism by shifting from multilateral to bilateral mechanisms.
Astonishingly, this is from a country that was once a major proponent of globalization. The United States has not only turned to trade protectionism, but has also pointed its sword at China.
The truth about China In the WTO
Has the United States really suffered from China’s entry into the WTO? No. As China’s Ministry of Commerce (MOFCOM) spokesperson Sun Jiwen has said, Sino-U.S. economic and trade relations are mutually beneficial, and since the two countries established diplomatic ties, these relations have made remarkable progress and brought real benefits to their peoples.
In the past decade, U.S. cargo exports to China grew 11 percent annually on average; from 2001 to 2016, service exports from the United States to China grew 1,500 percent, marking a surplus increase of 2,900 percent.
According to statistics from the U.S.China Business Council (USCBC), the bilateral trade sustains 2.6 million jobs in the United States, which contributes to the overall wellbeing of U.S. citizens.
In the realm of investment too, the United States has harvested huge profits from the bilateral relationship. MOFCOM statistics show by the end of 2016 Chinese enterprises’ non-financial direct investment in the United States had reached $50 billion, scattered in 44 states and providing roughly 100,000 jobs. Investment in China has also brought huge profits for U.S. enterprises. According to a report on China’s business environment released by the USCBC in October 2016, 90 percent of U.S. companies in China are in the black.
Instead of protecting its own trade benefits, the United States is trying to find an excuse for the new government to pursue trade protectionism. The report is testimony to the fact that the U.S. Government doesn’t have a rational long-term plan to solve its economic problems and is bad at tackling problems that come up in the process of globalization.
In fact, the current problems the United States faces have their root in an inclination to the virtual economy, which is not caused by China but is a result of the global dollar policy. The United States has raked in money by printing banknotes and through other financial activities that have desolated the real economy and jacked up local labor costs. At the same time, China’s opening up and reform as well as cheap labor and huge market attracted hordes of U.S. enterprises. Even if China hadn’t opened its door, these enterprises would have gone to other developing countries.
Commitments kept
The United States kept putting pressure on the Chinese Government to open up its market to the outside world. To become more integrated with globalization efforts, China applied to resume its status as a contracting party to the General Agreement on Tariffs and Trade—the WTO’s predecessor—in 1986, and carried out reform of its stateowned enterprises in the 1980s. This was implemented at the expense of large numbers of laid-off workers.
To enter the WTO, China faced tremendous hurdles from farm products imported