Beijing helps global system remain afloat
A World Trade Organization official in Geneva says China’s entry to the group in December 2001 is one of the most significant economic events in modern world history, mainly because of the move’s win-win outcomes in the past 15 years.
Yi Xiaozhun, deputy director-general of the WTO, made the comments in an exclusive interview with China Daily ahead of the expiration of China’s 15-year transition period on Sunday.
“China’s historic accession has made both China and the WTO stronger and more vibrant,” said Yi, in a written interview with China Daily.
China maintains that under the terms of its WTO entry, it should be given market economy status with the end of the transition, a view backed by over 100 countries, including the United Kingdom.
The United States, Japan and Canada still refuse to treat China as a market economy because of outstanding antidumping cases, even though they had agreed to market economy recognition when China entered the WTO.
The European Union, which needs agreement among all 28 member states to recognize China’s market status, is split. The EU has proposed reforming its trade defense regulations by introducing a “market distortion” concept, which China says is not in accordance with WTO practices.
Yi said China has made “deep and broad commitments” to reach this point, while accelerating major steps in liberalizing trade before entry into the WTO, citing China’s reduction of most-favored-nation tariffs from 45 percent in 1992 to 15 percent in 2001. And in 2015, the average of such tariffs was reduced to 9.5 percent.
Yi also said China’s tradeweighted average tariff is now as low as 4.5 percent. China also has opened up more than 100 services subsectors such as finance, insurance, legal services, telecom, distribution and courier logistics.
“On top of its trade liberalizing efforts, China overhauled some 3,000 laws and regulations at the central government level, and many more at the local level, in order to bring China’s legal system into compliance with WTO standards,” Yi said.
Yi said that during the previous 15 years, both China and the world have seen trade flows rise dramatically.
“For all the attention given to China’s rise as an export powerhouse, commentators have focused less on the question of China’s imports,” he said. “This is a significant contribution to the world economy, which is too often overlooked.”
“In the absence of the surge of imports into China over the last six or seven years, it’s very likely the global recession would have further deepened and that Asian countries would have been more adversely affected,” he said.
Furthermore, China is one of the few major developing countries that committed to granting duty-free treatment for up to 97 percent of products made by least-developed countries.
“Ever since 2008, China has become the leading export destination for poor countries, absorbing about a quarter of their total exports,” Yi said.
By bringing China under its umbrella, the WTO took a huge step toward achieving its goal of universal membership and inclusiveness, he said.
“As a result of China’s accession, one of the world’s biggest economies is now playing by the same multilaterally agreed rule book as other major trading nations,” Yi said.
“This is no small achievement, particularly in terms of strengthening global trade governance and the multilateral trading system.”
China and many of its policy changes will inevitably have a huge impact on the rest of the world, he said.
“Hence, in the latest WTO Trade Policy Review on China in July this year, the WTO called upon China to assume the increased responsibility and leadership that comes with being a central player in the multilateral trading system,” Yi said.
China was encouraged to ensure fair and equitable participation of State-owned enterprises in market competition, build better mechanisms for intellectual property protection and work with all members to address the problem of overcapacity, he said.
“It is essential that China continue to play an active and constructive role in the WTO so that the multilateral trading system can continue to deliver new trade reforms in the future,” Yi said.