A Look Back at China’s WTO Membership

On July 10, 1986, Qian Jiadong, then ambassador and permanent representative of the People’s Republic of China to the United Nations Office at Geneva, formally submitted an application for the resumption of China’s status as a contracting party of the General Agreement on Tariffs and Trade (GATT). On November 10, 2001, the Ministerial Conference of the World Trade Organization (WTO) reviewed and approved China’s application to join the WTO. Negotiations lasted for 15 years.

On March 15, 1999, then-Chinese Premier Zhu Rongji said at a press conference, “China has been negotiating to resume the GATT status and join the WTO for 13 years, and the hair of the negotiators has turned gray. It’s time to finish.”

Long Yongtu, the fourth chief negotiator for China’s resumption of the GATT contracting party and its accession to the WTO, revealed to the Hong Kong-based Wen Wei Po that Zhu Rongji personally took charge of the negotiations when talks between China and the United States reached the most difficult phase. He turned the tables on several thorny issues, which ultimately led to an agreement between the two countries.

Why did it take 15 years for China to join the WTO? Lei Da, a professor with the School of Economics at Renmin University of China, believes that two major obstacles were obstructing China’s accession. First, China’s reform and opening up had just begun, and the international community’s understanding of China was limited. Second, China is a developing socialist country with Chinese characteristics. It is also unique even among developing countries.

Domestically, joining the WTO means lower tariffs and better transparency. Could Chinese enterprises withstand the competition of foreign goods and capital? It was a major worry for the Chinese government as well as China’s business and academic circles.

Lei noted that accession to the WTO has driven China’s economic growth in an obvious manner. After joining the WTO in 2001, China’s economy grew at a fast speed. In 2010, China became the second largest economy in the world. In 2013, China surpassed the United States to rank first in the trade of goods around the world. Exports have played a very important role in driving China’s economic growth. At the same time, China has become more attractive to foreign investment. “After joining the WTO, continuous economic growth made domestic concerns about China’s accession gradually disappear,” said Lei.

“China’s accession to the WTO has also promoted an increase in the world economy and trade volume,” Lei stressed. “China’s economic growth has led to an extension of the global industrial chain. China’s development has helped a huge export-oriented manufacturing industry bloc take shape in Asia. Among the commodities that China exports to developed countries, many components are from neighboring East Asian countries.”

In recent years, the Chinese economy has also witnessed industrial transfer in the process of structural upgrading. Some traditional labor-intensive and capital-intensive industries have begun to move to neighboring countries, enabling more and more developing countries to join in the global industrial chain. Meanwhile, China’s further opening up and development has also led to the unprecedented rise of developing countries around the world. China’s accession to the WTO has also been a great benefit to developed countries. Consumers in developed countries are now able to purchase plentiful affordable Chinese goods, and their welfare has also been greatly improved.

“In November 2018, the first China International Import Expo was held,” recounted Lei. “Now, against the rise of trade protectionism, China is opening its door wider and wider to the world. This demonstrates that China, as a developing country, continues to adhere to multilateral cooperation and opening up. With a large population, a fast-growing economy and an expanding middle-income group, China is now able to maintain and promote a multilateral and open mechanism for the future of the world economy.”