Economy
China's participation benefits all global trading partners
(Xinhua)
Updated: 2011-01-28 10:44
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DAVOS -- A policy of more trade and greater openness to the rest of the world has brought significant benefits to China and greater market opportunities to its trading partners, the head of the World Trade Organization says.
"I don't think there is any question that China joining the WTO has been a very good thing for China and for the WTO and its members," WTO Director General Pascal Lamy said in an interview with Xinhua.
The WTO chief was expected to join the forum "China's Impact on Global Trade and Growth" on the sidelines of the World Economic Forum annual meeting held in this Swiss alpine town.
"In joining the WTO, China successfully underpinned a policy of what had been 20 years of progressive openness," Lamy said.
Adherence to economic reforms through international commitments ensured that China would stay on the path of openness, he noted, adding that the policy has helped the country economically, politically and socially.
Lamy stressed that China has done a "remarkable job" in reducing poverty, which is an important task for the country, along with registering double-digit growth, thus becoming the world's largest manufacturer and the second largest economy.
Apart from enhanced market access with its trading partners and more equal treatment in global trade, WTO membership also has allowed China to gain access to the organization's dispute settlement system, Lamy said.
According to a WTO report issued in December, as the world's biggest exporter, China ranks first in receiving anti-dumping (AD) investigations, with 23 new AD initiations directed at its exports in the first half of 2010.
In recent rulings arbitrated by the WTO Dispute Settlement Body (DSB), China has won a poultry dispute against the United States, and a steel fastener case against the European Union.
Being a WTO member, "China would have a seat at the table as negotiations commenced on the trade rules for the 21st century," Lamy said, referring to the decade-long Doha round of global trade negotiations aimed at building the next generation trading system.
Even more importantly, for China, participation in the global system of rules and discipline greatly boosted investors' confidence and helped facilitate foreign direct investment in China, he said.
On the other side of the coin, China's integration into the world trading system has given enormous driving force to the global economy and market opportunity to its trade partners.
Meanwhile, for WTO members, China's access has meant far greater market access opportunities, Lamy said, as "China's tariffs on manufactured and agricultural imports are low by the standards of developing countries."
WTO statistics showed that, in 2009, China's average import duties for all goods was 9.6 percent. Specifically, the average import duty for agricultural goods was 15.6 percent, and 8.7 percent for non-agricultural goods.
Lamy, in the meantime, reminded people of China's significant imports over the last decade when most were concentrating on China's surging exports.
China is currently the world's second largest importer. Figures from the Chinese Ministry of Commerce showed that China's import volume in 2010 hit $1,394.8 billion.
"The WTO would not be the World Trade Organization without China," said Lamy, who stressed China's role as part of the global trading system in ensuring greater stability and sustainability of the system.
"We saw this during the crisis when all other areas of the global economy were shaken and the trading system stood firm," he said.
China's imports surged 38.7 percent in 2010, and exports went up by 31.3 percent, reclaiming the country's losses during the global economic downturn.
Regarding China's implementation of its WTO commitments, Lamy said that "China's record on implementing its commitments is overall good," and "all members acknowledge this."
"One needs to understand the vast undertaking required to bring Chinese economic law into compliance with WTO rules," he said. In this regard, "what the Chinese have done is remarkable."
As for the issue of trade imbalance, which has been in hot debate among policy makers and academia in recent years, Lamy said,"I do think that we must change the way we look at trade figures."
"Today, we calculate trade flows on a gross rather than value added basis," he said. That, he said, to a large extent does not give a true picture of how nations trade.
In China's case, Lamy said, a large part of Chinese exports belong to final production.
Products that have been assembled in China use inputs that were themselves exported to China and make up the bulk of the product's added value, he said.
"Even if China's contribution to the added value of a finished product is rather small, customs officials in the United States, Europe, Japan or elsewhere will record that 100 percent of the value of that product as an import from China," he said.
"This misrepresents the true nature of trade flows," the WTO chief said.
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