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Benefits of membership

Updated: 2011-12-12 08:00

(China Daily)

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Ten years ago, when China officially became the 143rd member of the World Trade Organization (WTO), wolf crying was pervasive.

The one conspicuous fact, acknowledged by leaders of the world's major trade establishments and reiterated by President Hu Jintao yesterday at the forum commemorating the 10th anniversary of the country's WTO membership, is that China committed far more for its admittance than other emerging economies. This was hardly mentioned at home then.

And it was not clear at the time whether China's industries, which were believed to be weak and inadequately prepared, would be able to survive the immediate head-to-head encounters with overseas competitors.

But instead of the vulnerable victim some pessimistically anticipated, China has benefited tremendously from its integration with the rest of the world. It is now the world's second largest economy, the largest exporter and second largest importer.

Beyond such indicators, the palpable symbols in everyday life - from automobiles to iPhones - show WTO membership has been a life-changer for the country and its citizens.

But it has not all been a bed of roses.

The domestic cosmetics industry, for one, received a fatal blow. Many of the once popular domestic brands were acquired by overseas competitors and then faded away. Indigenous soybeans, once the country's most competitive agricultural product, have nearly disappeared. In the northeast, many local oil processors have suspended production or closed down.

Yet nothing has compromised the country's commitment to playing by the WTO rulebook, and it has committed to more than was anticipated and has fulfilled all its obligations.

And its accession to the WTO has not just benefited China.

While Chinese exports are to be found in retail outlets across the world, this has never been a one-sided game in China's favor. Putting aside the benefits overseas consumers have drawn from reasonably priced Chinese commodities, the world at large has profited from the opening-up of the Chinese market.

According to the International Monetary Fund China has imported $750 billion worth of commodities on average every year in the past 10 years, equivalent to creating more than 14 million jobs for its trading partners. And the scale of imports is expected to surpass $8 trillion in the next five years. Meanwhile, overseas Chinese-invested firms have employed almost 800,000 local workers, contributing over $10 billion in taxes each year.

And an often-ignored fact is that since 2005, more than 50 percent of "Chinese exports" originate from firms with overseas capital, and foreign-funded supermarkets now account for 47 percent of retailing in China.

With the aggregate retail sales of consumer goods in this country expected to reach 32 trillion yuan ($5 trillion) by 2015, that is good news not just for Chinese companies, but also other WTO members.

(China Daily 12/12/2011 page8)

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