China and WTO Essay

Since 2001 the world has witnessed a rapid growth of China in terms of its economy. With the goods having a â€Å"Made in China† label becoming a frequent part of our lives, China paves its way ever on the road to success. The credit to such a boom in the country’s trade (peculiarly exports) goes to one key factor: Globalization. Cognizant of the World Trade Organization’s potential to let China fully practice Globalization, right after its membership of WTO China marked an instance of global significance. Today with the steps of China gradually turning the uni-polar world into a bi-polar one, the analysts of global trade and economy predict China to soon supplant the United States, wholly on the basis of its tenacious economic stand. Initially, this paper attempts to develop a comprehension of rudimentary concepts pertaining to the World Trade Organization, Globalization and China. The paper further elucidates the major argument by a conscientious analysis of China’s practice of Globalization, accession to WTO, different attitudes about a Globalized China and impacts of its WTO membership not only on the country itself but also on the whole world. Introduction: It is a datum of experience that in the scene of modern existence globalization has emerged as an inevitable process. With its instruments like the World Trade Organization, Globalization has profoundly penetrated into the roots of the modern economic system thereby affecting different nations differently. With WTO and economic globalization being in vogue in the business world, what remains the topic of a controversial debate is the entrance of China into WTO. Previously a member with average participation in the international trade, China has established itself as one of the top most economies of the contemporary world immediately after signing the agreement with WTO in the year 2001. As the concerned year marked a celebration for China, it also proved as a sinister for many other nations that had been dominating the international trade before China’s formal stepping into it. With a multifaceted nature of China’s WTO membership, there remain a number of ambiguities in terms of its corollaries on the world and the country itself. Globalization: Before laying the foundation of the paper’s major argument, it is mandatory to comprehend the concept of globalization. â€Å"Globalization is what happens when the movement of people, goods, or ideas among countries and regions accelerates. † In the contemporary world, all the aspects of life are touched by the ravishing presence of globalization. Once comprehended as a mere economic phenomenon involving the flow of goods and services across borders, the term has transcended to reach the exchange of language, culture and relationships among nations† . According to Suarez in ‘Globalization: Culture and Education in the New Millennium’, the commencement and proliferation of globalization coalesces a series of cycles. Of them, the first cycle began in 1492 ending in the early seventeenth century whereas the second cycle embarked in the late seventeenth century. Globalization is often reckoned as an elusive concept keeping under consideration its dual prospects. This multi faceted view is clear in every aspect of globalization. For instance, international organizations like WHO, UNESCO and UNDP are trying to ameliorate the standard of life across the globe by attempts for eliminating poverty, improving health conditions and providing job opportunities etc. Such steps on the part of globalization provide its positive picture attempting to elevate the nations. On the other hand, the instruments of globalization like multinational companies are exploiting the world labour and have become a major source of collapse of many domestic businesses. Wal-Mart is one of the many examples in this concern. Not only feared by the smaller businesses of Non American countries, the domestic investors suffer the same threat. According to an interview (documented in the article ‘Rediscovering Uncle Sam’ of the book ‘Ambassadors of Peace) with the Mayor of Chestertown, Margo G. Bailey told how she has been fighting the Wal-Mart from entering into the small city of Chestertown for almost a decade because the invasion of Wal-Mart would mean a fiasco for the owners of the small businesses in the locality. This means that if globalization is elevating humans, it is equally abusing them. With the ascending power of globalization in the contemporary world, what becomes the reason of its achievement is three facts. First is the globalization’s role in the amelioration of technology. Twenty first century is considered as the hey day of science, technology and telecommunication. The second reason is the provision of integration of people across borders to get acquainted with the foreign cultures. This has specially marked a boom in tourism industry. Thirdly, the concept of free trade as advocated by globalization has increased the capital flow between nations who are now more interested in global trade without being interfered by the state government. Of many forces of globalization, World Trade Organization is considered its key instrument. World Trade Organization: Formed in 1995, World Trade Organization stands as the only hegemonic power ruling the trade in the international business market. WTO started to informally supplant General Agreement on Tariffs and Trade (GATT) that had been carrying on the same function in the global market since 1947. The working of WTO is based key principles which are available in the form of its written documentation covering almost every kind of activity happening in the international trade. One of these principles is to equally treat all the participating nations in the business market. This means that any policy framed by WTO would be implemented on all the nations alike irrespective of their status in the global market. Another principle of WTO advocates Free Trade which means the elimination of trade barriers like tariffs, regulation or other such measures of protectionism imposed by the government thereby impeding the process of liberal trade or smooth flow of goods and services among the nations. WTO also makes sure the transparency of trade policies by making all the nations cognizant of them through their 2300 paged of agreements providing every term in black and white. In the similar way, the negotiations regarding the policy matters are not made surreptitious thereby making the adjustments open to all the other members too. With a seemingly stringent frame of law, WTO also believes in providing flexibility to the developing countries in order to make their positive contribution possible in the competitive market. According to Article III of ‘Agreement establishing the World Trade Organization’ WTO is responsible for five major functions. These responsibilities involve, 1. Implementation, administration and operation of Multilateral, Plurilateral and its own trade agreements. 2. Providing a platform of negotiations between different member nations regarding their trade policies and agreements. It also assists them in implementing the decided policies. 3. Settling the disputes among the member nations. The nature of such disputes is generally trade-policy based where the WTO serves as an arbiter between the conflicting nations. 4. Facilitating and training the weaker members in order to create a balance in the global economy. For achieving the desired goal, WTO co-operates with World Bank and International Monitory Fund. 5. Monitoring the trade policies that have been implemented and to make possible the aspect of transparency in these policies. China in the contemporary world: It was about two hundred years ago that China was he ruling power of global economy. After years of a sleeping giant, China has rapidly raised its status in the global community in the wake of the last decade. This aggrandizing significance is specially marked in the growing performance of the country in terms of its annual economic performance. This is clear by analyzing the performance of China’s ship building industry. Considered as a poor quality manufacturer around 1980s, it has grown into a ‘bona fide’ world industry today. As a result of this boom in the economy, millions of Chinese previously living at the bottom line of poverty enjoy better standards of life today. For the very reason World Bank believes that â€Å"China achieved the fastest doubling of economic output ever from 1978 to 1987, far outpacing both early industrializers (e. g. , United Kingdom, United States, and Japan) and late industrializers (e. g. , Brazil, South Korea, and Taiwan) alike. It then repeated the feat from 1987–1996† and looks like continuing the same pace in the future to come. To restate, as a result of globalizing process China has doubled the per capita income for three times after 1978. Of the over all augmenting profits, China’s major gains also lie in its textile industry. Reviewing China’s consistent rise for the past many years, many analysts proscribe China most likely to supplant the position of the U. S. by becoming the most powerful economy of the world around 2050 as the former has already caught the high brow of the world. While talking to China Daily, Long Yongtu, China’s former WTO chief negotiator said, â€Å"Because China’s economy is more open, and China’s economic size is much bigger, the world is more sensitive to what’s happening in China. I think in that way China is really changing the world. â€Å"