In the last quarter of the twentieth century, although China was becoming increasingly integrated into the world economy, it was not a member of the WTO (formerly known as the GATT), which is the only international organization that makes and enforces rules of trade between nations. Foreign investors were sometimes confused and frustrated by the Chinese rules and regulations that were not in conformity with the WTO, and Chinese enterprises were also constrained in conducting international business. On 11 November 2001, after lengthy and tough negotiations, China finally became a member of the WTO, and began to commit to the WTO rules. Today, therefore, foreign investors should know what commitments China has made to the WTO and the nature of the new business opportunities open to them since China's WTO accession. This chapter first introduces the WTO and the background of China's WTO accession. Then it highlights China's basic rights and obligations to the WTO, together with the key points of China's commitments to the WTO on freer trade in goods and services. Finally it briefly analyzes the new business opportunities for foreign investors after China's WTO accession.
The WTO follows such principles as trade without discrimination, freer trade, predictability, fair competition, and more benefits for the less developed, and thus requires member countries to reach, through multilateral or bilateral negotiations, agreements on trade in goods and services, property rights protection, and dispute settlement so that trade can move smoothly and more freely within this multinational global trading system. In this way, the WTO has played an important role in promoting international trade and investment in the last 50 years. China was one of the 23 original signatories of the GATT in 1948. After China's revolution in 1949, however, the government in Taiwan announced that China would leave the GATT system. In 1986 China notified the GATT of its wish to resume its status as a GATT contracting party and was finally accepted as a member of the WTO in 2001.