Academic journal article South Asian Studies

Chinese Economic Challenges to the World Trade Organization: Separating Myth from Reality

Academic journal article South Asian Studies

Chinese Economic Challenges to the World Trade Organization: Separating Myth from Reality

Article excerpt

Introduction

China has emerged as a global economic force and many speculate that China tends to replace US as the sole economic superpower. Speculation of this account is made on how China's exceptionally steady growth has made its rise a reality, if not a plausibility. Assuming that by 1950s, China was still confused in adopting a balanced system of economics and then it finally decided to seal itself shut and restrict access to international investors for fear of nationalism. This meant that China was either not ready to adjust to international economic designs or was unwilling to allow any international influence on its domestic economic framework. Indications were clear that China would like to compete on international scale but on its own terms and any foreign dictation or direction shall remain unacceptable(Mansfield, 2014).

This meant that international community had to accept China for what it was and largely ignore such a backward and constrained mercantilist state during its most important phase of development. However, the 15 year delay in approving China's request to be added to WTO(Prime, 2002) as a contracting member meant that China was willing to change and the internal pressures of not doing so were either countered or mitigated temporarily. The follow-up of China becoming a member of WTO was remarkable; China significantly reduced trade tariffs to comply with international standards and repealed harsh legislation to conform with providing access to international investments. Major multinational companies and international trading initiatives sought best to invest in and with China and allowed China ample space to develop its relationships inside the global economic system. WTO kept a watchful eye on China and its steady GDP growth rate(Spencer, 2014) which quickly transformed China into a leading economic force. This is where the problem came; where international community wanted China to do more, domestic preferences kept hindering its openness to meet international requirements(Rumbaugh & Blancher, 2004). Chinese system of government plays a crucial role in determining future steps and with most of the economic sector still maintaining nationalistic dominance of state institutions, China remained a question mark as to the future of its economic relationship in the world over. This meant that where China was by far the best place to seek investment from or to invest with, its designs were a combination of overt agreement and covert designs that did not allow international community to rely on China as a compliant partner. This based itself on a more serious approach as to whether China would take WTO as a forum to compete with US and this meant that US needed to be more cautious of China as a competitor on the economic front. With China and major global economies still maintaining the anti-monopoly laws as last resort, theory would ultimately suggest the outbreak of an economic Cold War. WTO, with its proactive policies and reactive nature, seems to only serve as a toll for regulating status quo and instead of pursuing member states to show compliance, resorts to serve as a silent spectator while states manipulate its rule for their own interests. In this instance, even if China is somehow restricted to refrain from advertising its economic plans, the international economic organizations can do little to restrict economic insecurities. With global economic recession imposing a much needed break to this economic turmoil, recessive economic patterns allowed China to reconsolidate its efforts towards major global markets much against the rules prescribed by WTO(Paradise, 2015).

The experiences China has had with GATT and the lessons learnt from its economic transition post-1978 reform period are indicative of the fact that China may not challenge the international political system but might continue to act as the major threat perception due to its impact over global trade and production as well as the overall magnitude of its steady growth. …

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