China and Trade and Investment Liberalization

Abstract

China’s rise in the international trade and investment system is one of the most important events of the 21st century. Many non-Chinese observers regard China’s rapid ascent with surprise or even suspicion, but most Chinese believe that China was simply restoring its rightful place in the world, a position it held for thousands of years until the glory was lost in the mid-nineteenth Century. Regardless of one’s view, no one can deny the importance of China in the international trade and investment system today. At the same time, one should also take note of the fact that China’s relationship with the multilateral trading system is not always straightforward, but full of twists and turns. Thus, this chapter will trace the relationship from the very beginning of the post-war multilateral trading system, followed by its withdrawal and absence from the GATT, then its re-entry into the system, its rapid ascent and the ensuing implications. The chapter does not purport to provide a complete analysis, but it will try to cover all the salient features of China’s approach to the main issues, which is essential for anyone wishing to understand the multilateral trading system and the challenges presented by China.