China 5 years in the WTO

Yesterday, December 11, China marked the fifth anniversary of its accession to the World Trade Organization (WTO) and the end of a five-year transition period.

In the past five years all economic indicators showed a remarkable rise. GDP-growth, imports, exports, foreign direct investment, foreign exchange reserves and per capita income all increased substantially. GDP nearly doubled in the past five years and China became the world's fourth largest economy and third-largest trading nation. The average tariff rate has dropped from 15.3% to 9.9%.

As Cary Huang wrote in the South China Morning Post “China has gained more than it has lost and paid much less than had been feared five yeas ago”. Director Deng Hongbo of China's WTO Affairs Center commented that “no country has benefited more from WTO membership than has China” and that “WTO membership had changed China dramatically”.

But now that the transition period is over, China also faces still more pressure from its trading partners to open up even more and to make it ever easier for foreign companies to penetrate the Chinese market or to set up production facilities for export. Protectionism is rising especially in the U.S. The past five years better prepared Chinese businesses to face the global competition while it becomes more difficult to stop or reverse China's further integration into the globalized world economy.

It is time for the European Union and its member countries to grant China market economy status.