The Elephant in the Room of WTO Reform: China

Abstract

As the World Trade Organization finally changes its leadership after a long impasse to install a female candidate from the emerging world, Ms. Okonjo-Iweala, it seems like a good time to review the experience of one of the WTO’s most transformative moments, namely the accession of the most populous country in the world, China. China was not only the paradigm of an emerging economy trying to participate in the global economy, but was still an economy governed by central planning and socialist principles. It is important to note, however, that China started its accession process before the collapse of the Soviet Union, so it is much more driven by its own reform zeal than as a way out of a failing economic model. In fact, a number of countries that were either part of the Soviet Union or in its sphere went through WTO accession before China. More specifically, five former members of the Soviet Union, namely Kyrgyz, Latvia, Estonia, Georgia and Lithuania, together with others in Soviet Union’s sphere, such as Albania and Bulgaria, succeeded in becoming WTO members by end of November 2000. China’s accession, though, was very different from that of those countries as it started well before and was much lengthier and tumultuous. Interestingly, however, China also experienced a much faster transformation than any of these countries, at least when measured in terms of economic growth. This article will explore the reasons behind China’s transformation and what it means for the WTO and the ongoing discussion for China’s reform.