- Disappointment after 20 years after China’s WTO accession
- IPOs overseas cause a stir
- No US diplomats at Beijing Winter Games
- Is Evergrande facing restructuring?
- EU extends China sanctions
- Power from the desert: 200 gigawatt project takes shape
- WHO requests patent clearance
- State-run logistics group to tackle supply chain problems
- Tools: Improving supplier quality
- Executive Moves: Alibaba is restructuring
The USA is escalating the brewing conflict with China. They now have announced to not send any government representatives to the Olympic Games in Beijing. President Joe Biden is thus sending a very unwelcoming message. China will have to react accordingly to this diplomatic boycott; after all, Xi Jinping has styled himself and his country as strong and assertive. This announcement regarding a sporting event won’t be the end of the story. Further disruptions in global trade are now absolutely possible.
This gives Germany’s new foreign minister, Annalena Baerbock, an opportunity to promote her own human rights-based foreign policy. She has announced that she will not ignore the situation in Xinjiang and will seek transatlantic coordination. If Germany actually follows the US into the boycott, however, the impact would not be as severe as it is now. China could blame this on the poor influence of the US and continue relations for the time being. After all, China needs allies. However, it is now quite clear that the era of intense geopolitical conflicts did not end with the Trump era.
Just how much the attitude towards China has changed over the years becomes evident by a look at the history of the country’s WTO membership. “Change through trade” was a popular sentiment among China optimists in the early 2000s. If “the West” included China in the international trade order and increased both imports and exports, China would soon play by international rules and develop into a market economy. That was the idea. In retrospect, this seems rather naive. On the 20th anniversary of China’s accession to the World Trade Organization (WTO), the results are mixed, reports Felix Lee. Although global trade has grown, the West has lost many manufacturing jobs, and entire regions of the US are left in shambles. And the hopes foreign companies had placed in China were often left disappointed. On the other hand, many segments of the Chinese market remain closed off to foreigners.
The backlash against Chinese companies by the US shows just how intense the resulting frictions are. Washington is excluding more and more Chinese companies from its financial market and has now announced tighter supervision. Ning Wang analyzes how this fits into the overall disputes.
I hope you enjoy today’s issue!
20 years of China’s WTO accession: Clinton’s big mistake
Speaking to both houses of the U.S. Congress, the then US president promoted China’s accession to the World Trade Organization (WTO). The world would no longer be the same, he promised. The world’s most populous country would open its markets. And the US, with its wheat and corn, Hollywood movies, Fords and GMs, would be at the forefront. With more free trade, there would also be a freer China, Clinton said confidently. But things turned out differently.
These days mark the 20th anniversary of China’s accession to the WTO. The communist regime continues to rule with an iron fist. For the US and other industrialized nations, the promise of a new market has been fulfilled. But China has benefited far more. Today, more than 80 percent of refrigerators sold worldwide are made in the People’s Republic, 70 percent of all mobile phones and every second pair of shoes. While the trade balance between China and the USA was still largely balanced in 2003, the USA, in particular, is recording new record deficits in trade with China year after year. And China is by no means flooding the world with just cheap products. Laptops, flat screens, drones, electric cars – in 2020 alone, China will have exported more than half a trillion US dollars more than it imported.
China had two decisive advantages
“Yes, China’s WTO accession was a success, as expected,” says Pascal Lamy. He was the EU’s Commissioner for Trade between 1999 and 2004 and, as WTO Director-General from 2005, was also heavily involved in negotiations with Chinese leaders after China’s accession. “The global economy was let off the leash,” he said on Friday at a webinar hosted by Berlin-based China think tank Merics on “China’s 20th WTO Anniversary – Cause for Celebration?” China imported heavily and modernized its economy, said Lamy. Consumers elsewhere benefited from lower prices because China knew how to produce cheaply and in large quantities with a huge army of workers. For Lamy, it’s clear: “A win-win.”