On December 11, 2001, China officially became the 143rd member of the
World Trade Organization (WTO) in the culmination of a negotiation
process which began in 1986. Economists have long been debating the
global effects of China's accession to the WTO, and as China becomes
fully integrated into the organization over the next several years,
the accuracy of their predictions will be tested.
One of the biggest residual effects of China's entry to the WTO,
according to economists, will be the relocation of manufacturing and
distribution centers to China. Due to its cheap labor, cheap
industrial land, and educated workforce, China is an ideal production
centre for businesses based in outside countries. This will likely
result in a twofold impact more jobs will be available in China,
while countries like India, which have historically offered cheap
labor, will suffer. Taiwan and Malaysia's technology industries are
already suffering as companies like Dell Computers move production to
China, and while foreign investment soars in China, other Asian
countries suffer. In addition, Mexico and the Caribbean will lose
thousands of garment manufacturing jobs as the U.S. lifts restraints
on Chinese textile imports.
While the impact on Southeast Asia may be negative, the Western world
may benefit. While some suggest China's open borders will result in
increased competition and a decreased employment rate for the Western
world, Western countries will benefit from access to China's highly
developed electronics and industry sectors. With duties and quotas
slashed, and restrictions lifted, multinationals will benefit by
setting up distribution centers without the need for Chinese
middlemen. In addition, it's expected that China will import massive
amounts of food products, machinery and vehicles from the U.S., Japan,
Hong Kong, Taiwan, Singapore and South Korea, thus providing
significant boosts to these countries' economies.
In conclusion, it seems that while Western countries may benefit from
China's accession to the WTO, there's the potential that Asian and
South American countries may feel the pinch of free trade as China
moves to a global economy.
"U.S. report sees benefits to China joining WTO"
EE Times Article
"China and the WTO Will its entry unleash new prosperity or further
destabilize the world economy?"
Business Week Online article
"China's Entry into WTO Important to Global Community, Barshefsky
People's Daily article
"China's Entry into the WTO and its Impact on Asia"
Harvard Asia Quarterly Article
You might also find the following links useful:
tdctrade.com WTO Accession Monitor
Washington Post China/WTO special report
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