China Before and After Its Entry Into the Wto

Mao Zedong Thought and Deng Xiaoping theory

China’s Entry into the WTO

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Introduction

China became a formal WTO member December 11, 2001. It was an achievement due to China’s long-standing and unremitting efforts for resuming its GATT Contracting Party Status and for acceding to the WTO, which fully demonstrates the resolve and confidence of China to deepen its reform and open further to the outside world.

The four major commitments China accepted following its WTO entry:

• China is to treat each WTO member equally. All individuals and entities involved in foreign investment, including individuals and entities  that have not invested or registered in China, will enjoy at least the same treatment as Chinese enterprises regarding the rights of trade.

• China is to abolish the practice of two-tier pricing as well as different treatments for domestically sold goods and export goods.

• Price control will not aim to provide protection to domestic manufacturers and service companies.

• China is to modify existing domestic legislation and draft new laws in a unified and effective manner strictly in line with the WTO Agreement, so as to meet requirements of the WTO Agreement.

Three years after its WTO entry, except for a handful of cases, all enterprises will have the right to import and export goods and conduct trade within the customs territory. Farm products will have no export subsidies in any form. After China fulfills all its pledges, its average tariff of farm products will drop to 15 percent, while tariffs of industrial goods will drop to 8.9 percent. Overall tariff level will be reduced to less than 10% across board, and about 7% for products on which the U.S. has a major export interest.

Subsequent to China’s WTO accession, foreign companies involved in services will be allowed to establish equity joint ventures in China, which, no longer limited...