WTO Accession, Foreign Direct Investment and International Trade
- Advances in Chinese Economic Studies series
Edited by Chunlai Chen
Chapter 2: China’s Foreign Trade: Trends and Issues After WTO Accession
Kunwang Li and Xiaosong Wang INTRODUCTION China’s rising role in world trade has been much more outstanding since its accession into the World Trade Organization (WTO) in 2001. The rapid expansion of foreign trade has contributed to China’s economic growth. Such outstanding trade performance can be attributed to many factors, especially its abundant labour endowment, huge inflows of foreign direct investment (FDI), extensive and deep involvement in international division of production and trade liberalization particularly after WTO accession. China reduced its average most favoured nation (MFN) tariffs for agricultural and non-agricultural products to 15.3 per cent and 8.8 per cent respectively by 2007. Non-tariff measures have also been reduced significantly. Import quotas and trading rights were eliminated at the end of 2004. Import licensing has been reduced progressively and the administration of the import licensing regime has been simplified. China has liberalized its services in line with its schedule in the General Agreement on Trade in Services (GATS), and its specific commitments to the GATS are very extensive by developing country standards, covering nine out of the 12 large sectors in the GATS list. This chapter first examines the growth trends, changing patterns and the driving forces of China’s foreign trade after its WTO accession. Then, we will analyse the impact of China’s growing foreign trade on the United States, the EU, Japan and other Asian economies. Finally, we will discuss some issues in China’s foreign trade, including China’s exports growth strategy, the sustainability of China’s exports, upgrading the structure...
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