Throughout the years China has had an increasing role on world trade. Both its exports and imports have grown faster than world trade for more than twenty years. China has looked into it's regional trade patterns by increasing trade with the Asian countries, European countries, and the United States; which caused a significant change in bilateral trade balances. Imports from Europe and the U.S. have increased by 31 and 24 percent. China has also become more diversified, getting away from textiles and light manufacturing which used to account for around 40% of China's exports. This diversification caused China to become more important than ever in the Asian regional economy as it's increasing imports as well as becoming one of the most important export areas for other Asian countries.
China joining the WTO has led to several changes in regards to trade with China including substantial tariff reductions and the dismantling of most nontariff barriers. Several reforms introduced led to import tariff exemptions for processing trade and foreign investment, As a result most traded goods had largely converged with international prices by the mid-1990s. Also a majority of China’s imports were in effect not subject to any tariffs in 2000. Joining the WTO allowed for market access of goods, services, and the discriminatory safeguard rule. China has also been very good in the early stages at upholding its' commitments to the WTO and is seen as a great asset to finally have on board.
In the end, the paper simply lays out the idea that: China’s increased role in world trade will substantially benefit them and be a crucial process in promoting themselves on the world trade market. Which I agree with because the stats have already shown they've significantly increased there terms of trade through increasing imports and exports. Both have likely risen partially due to the fact they joined the WTO and have made leaps and bounds by several economic reforms.
China joining the WTO has led to several changes in regards to trade with China including substantial tariff reductions and the dismantling of most nontariff barriers. Several reforms introduced led to import tariff exemptions for processing trade and foreign investment, As a result most traded goods had largely converged with international prices by the mid-1990s. Also a majority of China’s imports were in effect not subject to any tariffs in 2000. Joining the WTO allowed for market access of goods, services, and the discriminatory safeguard rule. China has also been very good in the early stages at upholding its' commitments to the WTO and is seen as a great asset to finally have on board.
In the end, the paper simply lays out the idea that: China’s increased role in world trade will substantially benefit them and be a crucial process in promoting themselves on the world trade market. Which I agree with because the stats have already shown they've significantly increased there terms of trade through increasing imports and exports. Both have likely risen partially due to the fact they joined the WTO and have made leaps and bounds by several economic reforms.
You spoke a lot about China's increased role in the the international economy and its benefits to its trade partners, but recently China has seen some financial and economic difficulties. Were these to continue and were China to see a serious economic recession or even a collapse what kind of effects would that have on the US economy and the international economy in general? Were this to have happened 50 years ago who would have been affected the most and how would the international economy be affected differently?
ReplyDeleteWith an increased role in international trade, does it obligate China to run a more efficient economy? What I mean to say is that given the problems with China's shadow banking sector, should China be obligated to find a more effective or reliable source of lending? For if the shadow banking sector fails, won't that affect the balance of trade between Europe and China, as well as the United States and China?
ReplyDeleteAfter China joined WTO, China's export and import has been increased strongly, so there is no doubt about the good effects of WTO to China in term of trade. Nowadays, China has a big role in world trade and has a serious impact in world price. China's increasing in trading is a good side to their partners in trading, including the United State. However, there is one thing I have concern which is Chinese political system. In my opinion, they control the economy too much. Because they want to increase the national firms, foreign firms or products will meet some difficulties when they want to go in China. For example, foreign cars's price will be double or triple. This restriction makes foreign companies hesitate to join Chinese national market.
ReplyDeleteGreat article, Cole. It will be very interesting to see the impact that will come from the dramatic increases in China's role in the international economy. People often shed such a bad light on the growth of China, and think that it will have a negative effect on the United States, but that point is yet to be proven. As time goes on it will be interesting to see where China ends up, and how the rest of the world will be effected by this dramatic change. A 31 percent and 24 percent increase in imports from the Europe and the United States respectively is sure to have a lasting impact on the global economy if that trend continues. Good article and write up Cole, there was a lot to take from it!
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