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大中華在世貿中的角色
大中華在世貿中的角色
龍緯汶
1996
THE WTO
WTO (World Trade Organization) is an international organization of trade. It aims at unifying the tariffs and laws of trade among the member countries. Its members believe that, by doing this, it will favor trade and world economic development and a fair and free trade among the contracting parties can be maintained.
The formation of WTO can date back in 1947, after the signing of the General Agreement on Trade and Tariffs among twenty-six countries, including China, India, UK, USA and France. That is, it includes developing and advanced countries (Now, the WTO has 2/3 members which are developing countries). After that, a committee was formed under the help of UN. It aims to promote the GATT to other non-member countries.
Steadily, an organization has been formed as many contracting parties call for the establishment of a more comprehensive organization because of the following limitations of the GATT:
1. There are unequal obligations among countries in different stages of development.
2. Issues on intellectual property rights, services sectors and the farming sectors have not yet been covered by the GATT.
3. Dispute settlement mechanism is inadequate.
4. GATT is only a multilateral agreement that has no treaty status.
In a conclusion, from 1965 to 1990, world trade has been grown very fast. The world production has been risen by 136% and the inflation adjusted export by 438%.
THE GREATER CHINA REGION
According to Harry Harding, Greater China is largely an informal organization, which describes the growing interactions and the interdependencies ties within the constituents’ parts of China and its sphere of influence without any free trade agreement and institutions.
The Greater China Region contains the followings parts:
1.The core — China, Taiwan and Hong Kong.
2.The inner members -- Southeast Asian countries including two Koreas, Singapore, the Philippines, Indonesia, Thailand and Malaysia (all of them are fully influenced by Chinese culture).
3.The outer members -- Japan, Burma, The three Vietnams (Laos, Vietnam and Cambodia), Brunei and the four Indies (Pakistan, India, Bangladesh and Sri Lanka).
China has take much afford to maintain their membership in Greater China. In the early 1990’s, Li Peng and other important and influential leaders have been very busy in visiting countries in the region like Indonesia and Thailand. Friendship pacts and alliance treaties are renewed. The economic and political ties are more and more tied.
In the November of 1991, China, Taiwan and Hong Kong have joined the APEC (Asia Pacific Economic Cooperation Group) and cross-strait meetings are held between China and Taiwan unofficially.
The result is that among 1991 to 1992 according to a survey conducted by an economic magazine in US, Taiwan, Hong Kong and China all have experienced a strong GDP growth (all in 2-digits) despite the recessions in US and a slowdown of economic activities in the European countries. By that, more and more foreign investments flow into that region and the Asian Pacific Region becomes the fastest growing in economic aspect’s region in the world. Appendix I and 2 show us the main destinations of China’s export (% in total) and main trading partners of Taiwan (% in total) respectively.
CHINA’S EFFORTS TO RE-ENTER THE WTO AND THE RESPONSE OF THE WTO
After the operation of the open door policy of China to the world, it has taken much effort in order to re-enter the WTO.
In facing this huge economic informal organization heading by China, the reaction of the WTO is that not to admit China as a member so soon, even when Hong Kong and Macau have become the members of the organization.
The WTO proclaims that unless China fulfills the following conditions that the WTO would not consider the application of China:
(1) To unify the laws, rules and regulations on trade in the entire country.
(2) To increase transparency on its trading system.
(3) To admit the rate of tariff setting by the WTO.
(4) To publicize its measures on essential trade liberalization.
In order to gain a place in the WTO, China has carried out the currency reform since the first of January in 1994. Later, it let the Chinese Yuan to float in the international market. It also guarantees the fairness and openness of the implement of the mechanism of management. Import licenses to major goods are canceled.
However, the road to the WTO is still difficult. Some of the members in the WTO consider China a developed country as it has the eleventh largest economy in the world (Unluckily, China is stubborn at its status of a developing and backward country). Besides, US want to balance the trade with China that thinks that is very unreasonable. However, if we think in the side of US, China has a huge trade surplus over US, especially in the recent years (from 6 billion USD in 1989 to 30 billion USD in 1994).
In the side of China, it really wants to re-enter the WTO, but not at any price. It thinks that some of the members are too demanding that it cannot accept.
In the WTO’s points of view, some problems may exist if China becomes one of the members. It may reject the application for membership of Taiwan to the WTO. However, Taiwan is a valuable country to the WTO also because of its prosperity and a huge reserve of foreign exchange.
BENEFITS TO THE CORE MEMBERS OF GREATER CHINA AND THE WORLD IF CHINA AND TAIWAN CAN GET THE MEMBERSHIP OF WTO AGAIN
Truthfully speaking, there are many benefits for China to re-enter the WTO:
Politically, China gains prestige and it can rehabilitate from the international ill-treating causing by the June Forth Massacre.
In the aspect of economic, China gains the MFN status and need not deal with US in the same issue every year. Its open door policy can also be continued and its exports can also be increased.
In the considerations of Taiwan, it also has benefits if it can enter the WTO again.
Politically, its isolation imposed by China can be released. It also has a valuable choice to participate in international organization. Its political status can be improved.
Economically, it can gain MFN status. It can also receive a better and fair treatment from other contracting partners. The trade between it and other WTO member can also increase.
In Hong Kong’s considerations, it can get many benefits from the reentry of China and Taiwan to the WTO. According to the TDC (Hong Kong Trade Development Council) report in 1994, there is an estimation that if China can be the member of the WTO again, Hong Kong can contribute about 560 billions (In Chinese Yuan) in trade to China and more than 112,000 extra occupation opportunities can be created over next ten years. The foreign investments in Hong Kong would be increase also. Similarly, the re-export sector would be expanded largely.
To the world, there are good effects if China re-entry the WTO. It is because China and Taiwan have a huge potential market in trade and development. With their re-admission, international trade will increase and the status of the WTO can also be strengthened.
Will CHINA COMES BACK TO ITS CHINA IN THE WTO: THE STATUS OF GREATER CHINA IN THE WTO
All countries in the world now pay much attentions to the processes of that issue.
I think that the grant of the membership to China links with the status of Greater China in the WTO very much.
The WTO does not want to lose the membership of China because they admit that Greater China has a strong economic power. However, they do not want to be control by Greater China in the rest of their lives.
So, they want to have a certain degree of control to China as an exchange for membership.
CONCLUSIONS
Up to now, Hong Kong still acts as a major provider of market and finance for the cheap products from Mainland China. Taiwan continues to operate an open door policy to the investments of the Taiwan people in China. This act enhances the choices in investing in China. In responding to the situations, China begins to operate a market-oriented reform (how to act out a communist market economy). It also makes more connections to the members of the greater China Region than before.
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