Home » China joining the WTO: Looking Back 15 Years On
In December 2001, at the point China joined the WTO, the country was rife with poverty. Now, only 15 years later, the country is the largest trading country with the second largest economy across the globe. China still has a long way to go. Poverty is still common, but no longer on the same scale.
For Chinese citizens, benefits can immediately be seen in the influx of desirable foreign brands. Cars are cheaper, and international travel is no longer reversed for the very wealthy. However, the benefits of China joining the WTO is not only for the country, but the entire world.
Following the financial crisis which hit many nations in 2008, worldwide growth was sluggish. However, China has continued to plug the gap made by the decline in other developed countries economies.
Other vital benefits include the significant rise in both imports and exports by China. Annually, imports have seen on average a 10% rise since China’s inauguration. A sluggish worldwide economy has benefited from the stabilising effect on China’s demand for imports. Increased disposable income directly from China’s inclusion into the WTO means citizens want imported luxury goods.
From the other side, many countries have seen exports to China boom. Countries include the USA, Australia and a whole host of Asian countries. Many developing nations have benefited greatly from the growth the Chinese market has provided.
Advocates for further trade barriers against China wrongly assume money is only flowing into the country. For 13 years up to 2015, Chinas outbound direct investment increased year on year. Now sitting at a record high of $145 billion. Cementing China as the 2nd biggest investor worldwide.
Consumers as a whole have greatly benefited. Cheap Chinese exports have run down the cost of goods. More money in the pockets of consumers as a result of reduced prices. The quality has continued to increase, with China helping international consumer purchasing power and reducing worldwide poverty.
Doubters see China as a threat. However, competing countries are able to co-exist and share the same global market. True, China has been one of the biggest winners from globalisation. However directly blaming China for the struggles of other countries is unfair and unjust.
Foreign investment has continued to pour into China. The country continues to open up to attract this investment they once tried to restrict. Foreign investment benefits both China as well as the origin. Profits are coming out of China in staggering numbers. Since China’s inclusion within the WTO, the total profits generated by foreign-invested industrial enterprises rests at an estimate $2.2trillion.
At the time, China’s entrance into the WTO was heavily debated and controversial. In the following years many benefits are clear to see. Both for China and the world as a whole. Consumers pay less for goods, and worldwide growth is more stable. Looking into the future, China should continue to remain a staple of global activity and trade. Now the country has found its groove, Chinese investment will be more frequent internationally. As the country reduces barriers for outside foreign investment as well, the world should reciprocate further.
To read more about China and the WTO, check out our Trade Wiki entry here.