China & its Relations With WTO June 26, 2007 Group 2: Mylene Ferrer Mia Lacson Joy Angsioco Eric Bautista Bobby Reyes

World Trade Organization (WTO) Only global international organization dealing with the rules of trade between nations Its main function is to ensure that trade flows as smoothly, predictably and freely as possible At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments 150 member countries (as of Jan 2007)

WTO Trading System Benefits System helps promote peace Disputes are handled constructively Rules make life easier Freer trade cuts the costs of living Provides more choices of products Trade raises income & stimulate growth Basic principles make life more efficient Governments are shielded from lobbying System encourages good government

US-China Agreement US Unprecedented access to the Chinese market for both U.S. exports and investments China Substantial concessions Remove political embarrassment of Congress’ annual scrutiny of its human rights, labor, and environmental record.

China in WTO- China’s Responsibilities Tariff reductions Service commitments and systematic reforms Right to import from & export to customers in China directly within 3 years Right to export to China without establishing an investment presence there Phase out of NTM such as quotas/licenses Elimination of state-trading import monopolies for agricultural and industrial products

China in WTO- Advantages Sustain the pace of economic growth and reform It will be able to defend its trade interests It will make China more attractive to foreign investors Improve wages and workers’ rights Increase competition - benefit consumers by having a larger range of choices - benefit the economy as competition fosters gains in efficiency and productivity Consumers and companies alike will benefit from an expanded rule of law as China implements its WTO commitments

China in WTO- Disadvantages WTO entry will increase competition within China Intensified competition may lead to increased job losses in the short run WTO entry will not likely promote democratization in China in the short run

WTO China Updates PBOC raised based lending rate by 0.18% points Reserve requirement ratio of banks was raised by 0.5% points Fixed Assets investment grew by 18% Added value industrial output grew by 18% CPI went up by 2.8% Number of private firms increased to 4.9 Mn

WTO China Updates China in WTO after 5 years WTO entry boosts China’s economy Legislative process aids democracy Foreign retailers gain bigger market share in China Vehicle imports experienced rapid increase Remarkable progress in economic opening