China accession to the World Trade Organization has had a profound impact on the country. It has changed the way people do business and the way investors operate. But more than anything else, it has brought about a major change in life style.
The historic moment in Doha a year ago opened the door for China to the world's most important trading community, the WTO. The move was widely received as a "win－win" situation for both China and the organization. Since China joined up, a large number of multinational corporations have had unprecedented access to the Chinese market. And for China, the membership has fueled its market reform.
Laurence J. Brahm, an economist, said, "The fact that China's entry into the WTO is part of the international club of free trading nations has been a boost in confidence, allowing decisions to be made at the top companies. In return, following will be a much more investment into China that has never been perceived before."
Increased foreign investment has been the most immediate benefit. China expects to attract more than 50 billion US dollars of foreign investment this year, just 12 months down the track from Doha. This will make it the world's biggest recipient of inbound investment. Now, the Fortune 500 are all here. And, more are coming. They have brought management skills and new values but, most of all, they have changed the way people think.
The Chinese leadership has committed the country to the WTO and the changes under way will gain momentum.
Shi Guangsheng, minister of the Foreign Trade and Economic Cooperation, said, " To create a favorable environment for foreign investment will be on top of the agenda for the economic policy. China is determined to maintain this momentum."
China has lowered tariffs on more than 5,000 imported products since the beginning of this year. As promised, the country has opened its capital market, including the insurance and banking sectors. But for China, the WTO membership means more than cuts in tariffs and import duties. As Chinese economist Fan Gang explains, China will benefit from the process in the long run.
Fan Gang said, " Number one, China will continue the path to its market system on the path of the market oriented reforms. And secondly, it is to accelerate China's economic growth and development, to make sure that China will join the globalization."
Being a part of the international community will certainly change many things inside China. Among its many challenges, WTO has brought with it competition, changing the old state sector bastions of economic protection. It will take more time to fully comply with all the WTO stipulations. But, in the years ahead, inclusion in the WTO will mean rising standards and the realization of China's potential.
China's WTO membership is a milestone in the country's history, marking its integration with the rest of the world. In the past, China had been a nation noted for going along, rather than participating in world markets. But with China joining the international community, the WTO will never be the same, and neither will China's economy.
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