China’s new great leap forward: The WTO

Authors:

  • Kiesow Ingolf

Publish date: 2001-01-01

Report number: FOI-R--0022--SE

Pages: 35

Written in: Swedish

Abstract

There are risks that can be associated with China´s and Taiwan´s accession to the WTO. They are, however, mainly risks latent in the already ongoing economic reforms in China. Membership in the WTO would only cause a moderate increase in the risk-level, with exception for a possible risk of an "externalization" of the problem - which is considerable, should the reform-work fail. On the positive side, six circumstances related to the WTO membership have been identified as working in a conflict- preventing direction. First, even if, in the short perspective, the WTO membership has a destabilizing effect, because of the readjustments it will require, it is also likely to work in a stabilizing direction. Second, the latent xenophobia can be reduced in the long perspective. Third, China can accept to become an integrated part of the international community. Fourth, the WTO offers several methods for China and Taiwan to solve problems in their mutual economic relations. Fifth, the WTO will bring about an increased exposure of China´s citizens to the outside world. Sixth, the USA denies itself the right to one- sided economic sanctions. The alternative to WTO membership is unfavourable. A failure to obtain membership would mean a severe loss of prestige for the leaders of China. That would create new insecurity.