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On December 11, 2001, China formally joined the World Trade Organization (WTO). Some were overjoyed, others harbored misgivings about the impact it may have, and still others cried wolf.

 

Five years have passed, which enables us to take stock of the country's WTO membership to date.

 

It can be summed up in this way: To begin with, China's WTO entry has promoted the country's economic reform, boosted the growth of the Chinese economy and made China's integration into the world irreversible. In addition, China's WTO entry has helped power the world economy, helping put the economies on its periphery on the fast track, bringing benefits to the developing world and also helping the stagnant Western economies get out of difficult straits.

 

Five years ago, some Chinese worried that the influx of foreign commodities could ruin the domestic industry once China became a WTO member. Today, however, they find that a win-win situation has been brought by the country's WTO membership: The price of imported cars keeps going down; the Chinese-made vehicles are gaining bigger and bigger market share; more big-buck foreign films are being screened; more Chinese movies are becoming box-office hits and are targeting European and US audiences; telecommunications costs show signs of going down; banking reform is picking up speed; and the insurance sector is improving.

 

People have come to know that competition from outside only serves to make domestic players more hardworking and smarter.

 

In the past five years, a set of new strategic ideas has been conceived by the Chinese authorities, involving Chinese industries going overseas for development, bringing about sustainable development, shifting the traditional GDP-oriented growth model to a balanced-growth model, quickening the process of urbanization, promoting regional economies, building the new countryside and so on.

 

Partly, these ideas are the product of necessity in the wake of China's WTO entry. For example, China must abolish 3,000 outdated rules, regulations and laws that fail to keep up with WTO requirements.

 

On the other hand, however, the new ideas also reflect the initiatives taken by the Chinese Government to meet these challenges.

 

It is these new ideas and their implementation that have helped bring about significant changes in China.

 

Internationally, China has become one of the dynamos powering the world economy. In the past five years, for example, overseas investors have remitted a total of US$57.94 billion in profits out of China. At the same time, China has imported commodities worth a total of US$2.4 trillion. The country's tariff on imported industrial products has dropped from 42.9 percent before China joined the WTO to 9 percent now. The tariff on imported farm produce has gone down from 54 percent to 15.3 percent. These are record tariff cuts for any WTO member in such a short period of time.

 

Meanwhile, the commerce, telecommunications, construction, retail sales, education, environment, financial, tourism and transport sectors have all been opened to the outside world.

 

According to figures released by the World Bank, about 13 percent of the world's economic growth can be attributed to the working of the Chinese economy.

 

In multilateral trade, China has sustained big trade deficits, which can be considered contributions to the multilateral trade system. China's deficits stemming from its trade with ASEAN (Association of Southeast Asian Nations) are expanding, for example.

 

Pascal Lamy, WTO secretary-general, said that China has kept its promise to cut tariffs, shown strong momentum in exports, which account for 30 percent of its GDP, and is widely considered a responsible big country by other WTO members.

 

It should be noted that China has reaped a wealth of intangible assets since it joined the WTO five years ago. In the course of bringing Chinese economic rules and regulations in line with international practice and in coping with trade frictions that have cropped up time and again, Chinese Government departments and enterprises have learnt and accepted internationally accepted economic and administrative operational principles and concepts. More important, they are applying in practice what they have learnt and accepted.

 

Some standardized trade principles, management rules and service standards have become ingrained in the minds of Chinese managers. And the ideas and concepts associated with all this have become integrated in the consciousness of Chinese people. Chinese citizens are becoming increasingly aware of safeguarding their own rights, transparency, justice and fairness.

 

For the international community, the contributions made by China since it became a member of the WTO not only help promote economic exchanges between other countries, but also make people see that China's WTO membership helps make the world more secure as well as prosperous.

 

Yan Fu, the renowned Chinese enlightenment thinker active in the late 19th and early 20th centuries, observed: "A nation is put on the brink of doom by the ignorance of what is going on beyond its boundaries." His remark reveals the devastating effects when a country lives in seclusion. Deng Xiaoping, the architect of China's reform and opening up, said that reform and opening up are integral, stressing that there would be no reform in the absence of opening up.

 

In commemorating the fifth anniversary of China's WTO membership, we should see that there are many twists and turns in store for us in the future and that we should, therefore, get prepared for them so that our journey on the WTO ship sails in the right direction.

 

The author is a researcher with the China Foundation for International and Strategic Studies.

 

(China Daily December 11, 2006)