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WTO tack creates early gains for all
2003-12-11
China Daily
December 11 marks the second anniversary of China's World Trade Organization (WTO) entry.
Thanks to the national consensus that WTO membership would present more opportunities and speed up reform, China has since sailed on a course of global economic integration and successfully become a strong breeze pushing global trade.
As Asian countries are poised to generate more than half of the growth in global trade this year, regarded as critical to the continual recovery of the global economy, China will make the largest contribution with its surprising appetite for goods and investment from other countries. Its import volumes for 2003 are projected to soar by 40 per cent.
The huge potential of the Chinese market has long been coveted by multinationals - but the lightning speed at which it is being translated into reality has to be attributed to China's resolution and strenuous efforts to fulfill its WTO promises.
Honouring its WTO commitment the country has lowered its average tariff rate from 12 to 11 per cent this year following a 3.3-percentage-point cut a year ago. And it is ready to further slash tariffs next year, according to its commitments, though its average tariff rates on many imported goods are already far lower than the rates in other large emerging markets.
China's high degree of openness is also reflected by its renewed efforts to dismantle investment barriers in once protected service industries like the banking sector.
Robust trade growth has significantly helped the Chinese economy to rebound from the severe acute respiratory syndrome crisis earlier this year.
But given the serious rural problems the country faces, it was a hard decision for the Chinese Government to slash the agricultural tariff rate to 16.8 per cent this year while the world average level stands at, according to the United States Department of Agriculture, 62 per cent.
The mountain of non-performing loans domestic banks suffer must have also weighed heavily on policy-makers when they recently decided to introduce foreign competition more quickly than expected.
Yet, the overall sound performance of the Chinese economy in the second year of the nation's WTO membership is actually better than most people expected. It has hit a growth of 8.5 per cent in the first three quarters of this year, convincing the nation that further integration with the world economy will benefit all in the long run.
However, trade disputes between China and other countries have been on the rise thanks to increased protectionism by some developed countries.
The rise of China's role as a global trade power will inevitably bring about changes in the international trade order. But that does not justify the erection of trade barriers by rich countries which also need to undertake industry restructuring in line with their competitive advantages.
Domestic enterprises have considerably enhanced their awareness of international trade rules after losing many trade cases. But in 2003, they also gained a better understanding of the necessity to join with other countries to defeat unfair trade barriers. The WTO's ruling against the United States' protectionist steel tariffs imposed in March last year shows that the global trade body demands unremitting efforts from all.
China, of course, will continue to face tests in the years to come.
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