China’s joining the WTO

In spite of existing political domination of the Communist Party, by the late 1990s, China had started the policy of active integration in the global economy. The international trade of China with other country had started to increase considerably, while foreign investments also had started to grow because Chinese government supported the attraction of foreign investments in the national economy. As a result, China became one of the most attractive countries for foreign investments and, at the present epoch, leading companies of the world readily cooperate with Chinese companies or attempt to enter Chinese market.

In this respect, the membership of China in the WTO played a very important role. In fact, China joined the WTO in 2001 and it was a turning point in a way for the development of Chinese economy[1]. The membership of China in the WTO was a signal for foreign investors that China is a reliable country and foreign investments will be protected since, as a member of the WTO, China meets standards and rules established by the WTO which are equal for all countries. Consequently, as China had joined the WTO, investments in China had started to grow since the country was perceived as a reliable partner.

At the same time, it is worth mentioning the fact that China faced a serious opposition from the part of democratic countries, including the USA, which were unwilling to accept China as a member of the WTO. In this respect, political concerns were strongly backed up by purely economic reasons. Obviously, democratic countries could not be certain in the safety of their investments in China and, what is more, companies based in democratic countries could not develop economic cooperation with countries which had a negative public image because it would affect their own image and, thus, their position in national as well as international market. In fact, the reputation is crucial for democratic countries and their companies, while Chinese communism could have a negative impact on their reputation. Nevertheless, due to the favorable conditions created by Chinese government for foreign investments and the evident intention of China to get integrated into the world’s economy, member-countries agreed to accept China as a member of the WTO.

[1] Rodrick, D.  Alternatives to Globalization. New York: New Publishers, 2002, p.135

Leave a Reply