China Watch Vol. 2, No. 16, April 2022
Twenty Years Since China’s WTO Accession: Looking Back and Forward
LONG Guoqiang[1]
Vice-President, Development Research Center of the State Council
On December 11, 2001, China officially joined the World Trade Organization (WTO), which was an important milestone in China’s reform and opening up and for its socialist modernization drive. In the past twenty years, China has fully abided by its WTO commitments and continued its opening up, which has activated the surging tide of China’s development and freshened the waters of the world economy.
The Great Significance of China’s WTO Accession
Joining the WTO has profoundly changed the relationship between China and the world economic system, since it has enabled China to give full play to its comparative advantages, participate deeply in the international division of labor system, and rapidly develop into the most important trade and investment power in the world. Joining the WTO has provided better conditions for China’s participation in global economic governance, and China’s international influence has continued to rise; it has effectively promoted the reform of the domestic economic system, stimulated the vitality of market players, and released economic development potential.
It has effectively promoted the improvement of China’s status in the global economic system. After joining the WTO, China has been able to enjoy the rights of a WTO member, as well as the institutional achievements of international trade and investment liberalization and facilitation (TILF). This has created a more stable, transparent, and predictable economic and trade environment for China, and domestic and foreign investors’ confidence in China’s participation in the international division of labor and the development of foreign economic and trade cooperation has been significantly enhanced. We bring our own advantages into full play, integrate deeply into the world’s division of labor system, and continue to improve our position in the global economic system. In the past twenty years, China’s economic aggregate has risen from sixth to second in the world, our trade in goods has risen from sixth to first, and trade in services has risen from the eleventh to the second; in utilizing foreign capital, we firmly occupy first place among developing countries, and our foreign direct investment (FDI) has risen from 26th in the world to first.
We have realized the mutual reinforcement between reform and opening up. The fifteen-year process of our GATT/WTO accession negotiations was also the process of China’s continuous deepening of reform. It is precisely because of the continuous deepening of reform that we have been able to respond effectively to the impact of market opening and have transformed the pressure from opening into market vitality and increasing international competitiveness. After joining the WTO, China has fully complied with and implemented the WTO’s rules and has striven to build and improve market economy laws and regulations in line with multilateral economic and trade rules; doing so has stimulated the vitality of our market and society. China has eliminated non-tariff barriers and greatly reduced the level of tariffs. The total tariff level has dropped from 15.3% to 7.4%, which is lower than the 9.8% WTO commitment, so that the level of competition in the domestic market has been greatly improved. One can say that joining the WTO was a classic case in which China’s reform and opening up processes promoted each other.
WTO accession opened a new page for China’s participation in global economic governance. Over the past twenty years, China has actively participated in the reform of the global economic governance system and the formulation of rules. We actively participated in the Doha Round negotiations and made important contributions toward the success of the negotiations on the expansion of the Trade Facilitation Agreement and the Information Technology Agreement. After the negotiation of our WTO accession was basically completed, China launched regional trade arrangements in time. In November 2000, China proposed the establishment of the China-ASEAN Free Trade Area. By the end of 2020, China had signed 19 free trade agreements with 26 countries and regions. The Belt and Road Initiative proposed by President Xi Jinping in 2013 has received positive responses from more than 170 countries and international organizations. China has also actively participated in global economic governance platforms such as the G20, and it has proposed a Chinese plan for WTO reform. China is striving to promote the building of an open world economy on the multilateral, regional, and bilateral levels, and its status in the global economic governance system is constantly rising.
China’s entry into the WTO has further improved the world economic system. Without the participation of more than 1.4 billion Chinese people, the WTO would be extremely incomplete. After China joined it, the coverage of multilateral economic and trade rules has been greatly expanded, global industrial chains and supply chains have become more complete, and China’s contribution to world economic growth has reached approximately 30% for many consecutive years. Clearly, China’s WTO accession was also an important milestone in the process of economic globalization.
The Experience of WTO Accession, and What It Revealed
Always adhere to the Party’s strong leadership on the cause of opening up, and improve the opening-up strategy by keeping pace with the times. The basic reason why China has been able to find the advantages and avoid the disadvantages in the process of economic globalization is that it has always adhered to Party’s strong leadership on the cause of opening up. During the WTO accession negotiations, the Party Central Committee reviewed the situation, made resolute decisions, overcame obstacles, and reached agreement. After joining the WTO, under the strong leadership of the CCP Central Committee, we fulfilled our commitments, deepened reforms, and achieved vigorous economic and trade development. As the world today is undergoing the kind of profound changes not seen in a century, the great rejuvenation of the Chinese nation is at a critical period. We must adhere to the Party’s leadership, implement a more proactive opening-up strategy, continuously improve the level of opening up, and continue to enhance China’s new advantages in international economic cooperation and competition.
Put into practice the concept of open development and unswervingly persist in the expansion of opening up. General Secretary Xi Jinping has pointed out: “Opening brings progress, and closing inevitably leads to backwardness.” Since the reform and opening up, especially after entering the WTO, China has firmly grasped the period of strategic opportunities and gave full play to its comparative advantages. Its comprehensive national strength has rapidly increased, and its global influence has been greatly enhanced. Opening up is the only way for a country to prosper and develop. The CCP Central Committee with Comrade Xi Jinping at its core regards open development as an important part of the new development concept, and the status and role of opening up in the cause of the Party and country have been enhanced to an unprecedented degree. On the new journey of building a modern socialist country in an all-round way, we must unswervingly persist in opening up, and raise the level of openness with greater self-confidence and self-awareness.
Firmly establish a sense of rules and insist on promoting institutional opening up. Since joining the WTO, China has highly respected WTO rules and wholly fulfills its WTO commitments. Some major powers put domestic laws above international rules, obeying international rules if they agree, and trampling them if they do not. This not only undermines multilateral rules, but also ends up hurting the world economy and the offending power itself. As the largest developing country and world’s second-largest economy, China has demonstrated its responsibility as a major country, taking the lead as a respecter, defender, and builder of multilateral economic and trade rules, and actively participating in the reform of the global economic governance system—and while the international economic and trade rules are being refined and perfected, we contribute Chinese proposals. Meanwhile, we adhere to institutional opening and accelerate the construction of a new open economic system.
Forming a New Pattern of Opening up to the Outside World: With a Wider Scope, Wider Field, and Deeper Level
As I have mentioned earlier, the world is undergoing the kind of profound changes not seen in a century. Although they are also intertwined at present with the epidemic of the century, the revolution of new technology is advancing by leaps and bounds, the transition to green and low-carbon technology is accelerating, adjustments to global economic governance are accelerating, and the struggle over rule-making dominance has become more intense. China’s comparative advantages have also dramatically changed, and it is necessary to make more effective use of domestic and international innovation resources and create new advantages for participating in international cooperation and competition. When confronting new situations and tasks, we must always adhere to the centralized and unified leadership of the Party Central Committee with Comrade Xi Jinping at its core and fully implement Xi Jinping thought on socialism with Chinese characteristics for a new era. We must be good at nurturing opportunities in crises and opening new opportunities in changing situations. We have to promote the formation of a new pattern of opening to the outside world—one with a wider scope, wider field, and deeper level.
Continuously improve the level of openness in building a new pattern of development. To build a new pattern of development, it will be necessary to simultaneously promote deepening reform and opening up, so that coordination and mutual reinforcement between the two will be achieved. We must adhere to the main line of supply-side structural reform and promote scientific and technological self-reliance. By focusing on reforms such as streamlining administration, delegating power to the lower levels, promoting fair competition through regulatory innovation, and creating convenience through high-efficiency services, we will continue to optimize the business environment, build a large, unified domestic market, and smooth the economic cycle. By taking as a guide the goal of high-level openness, we will strengthen the introduction of capital and technology, integrate global innovation resources, enhance the integration of Chinese and foreign interests, break the technological containments and rules constraints against China, solve the “bottleneck” issues in supply chains, enhance resilience in industrial chains, and enable higher-level mutual reinforcement between internal and external cycles.
Cultivate new advantages in international cooperation and competition. We should firmly grasp the strategic opportunities brought about by the digital and the green, low-carbon transformations, and accelerate the formation of new international competitive advantages for China’s emerging industries. By empowering traditional industries with information technology and transforming labor-intensive industries with intelligent manufacturing, we will maintain the international competitiveness of China’s traditional export products. We must strengthen intellectual property protection to enhance the international competitiveness of our capital and technology-intensive industries. Finally, by supporting enterprises to “go global” to integrate foreign and domestic markets and resources, we will build Chinese-invested multinational corporations with greater international competitiveness.
Benchmark high-level international economic and trade rules to build a new system of open economy. By obtaining an accurate grasp of the trends in global economic rules and benchmarking the high-level international economic and trade rules, while continuing to promote TILF, we will continue to optimize the business environment and enhance the stability, transparency, and predictability of foreign economic and trade policies. We should give full rein to the pilot role of the pilot free trade zones (free trade ports), actively promote pressure tests for high-level opening, explore a precise supervision model for the orderly cross-border flow of data, develop timely summaries of positive experiences, and then replicate and promote them.
Foster a good international economic and trade environment. China needs to vigorously cultivate people with high-level talent in international economics and trade, create innovative economic and trade theories and methods, and enhance its abilities in setting the agenda, conducting negotiation with foreign partners, and engaging in international communication. We need to be better at telling China’s stories. We will be actively participating in the reform of the global economic governance system, firmly safeguarding the authority of the multilateral system, jointly promoting the reform of the WTO, and actively participating in the negotiation of new international economic and trade rules. As we deepen cooperation on international development, promote the high-quality development of the Belt and Road Initiative, and accelerate the implementation of the United Nations 2030 Agenda for Sustainable Development, we shall promote the building of a community of common destiny for all humankind.
Translated by Thomas E. Smith
[1] This article was originally published in Renmin Ribao (The People’s Daily), December 10, 2021.