|
|
 |
17 September, 2001
China's WTO
|
| Content provided
by: |
 |
|
There have been a lot of comments suggesting how large numbers of China's SOEs would collapse under competition from WTO accession, and how serious China's unemployment problems would become, etc.
While these comments highlight issues to think about, China's problems should be put in perspective:
| (a) |
Some 30 mn workers have already been fired by the SOEs in the past 6 or 7 years. In comparison, total employment in the SOEs is now around 80 mn. |
| (b) |
Up till the early- to mid-90s, China's labour market remained rather rigid and backward. Today, a much more dynamic and active labour market exists for everybody to compete. Indeed, the SMEs have been the major sector providing employment opportunities in recent years. |
| (c) |
With the impending cancellation of the household registration system, millions of workers from the countryside will be given the freedom to look for jobs in the cities. The scale of the problem related to the coming redundencies in the SOEs pales in the face of the employment issues related to this vast labour force from the countryside. |
| (d) |
Being a WTO member does not mean an immediate and full opening up of the country. What China has promised is a phased programme of opening up to the rest of the world and to abide by the rules of the WTO. |
| (e) |
In any case, there are still lots of ways for the Chinese authorities to ensure that opening up of China's markets will not mean an immediate flooding of China's markets by foreign products and services. Japan has been a member of the WTO for a long time -- which firm in the world would say Japan's market is easy? |
| (f) |
One should bear in mind that WTO rules allow anti-dumping charges be made against exporters. "Anti-surge" clauses are also there to enable importing countries to call a stop to a rapid surge in imports which threatens the existence of domestic industries. China used to be at the receiving end of such charges in the past. In the future, China could also call a stop to such import surges under WTO rules and procedures when China opens up. In fact, some of the things China has insisted in its WTO negotiation process include (1) non-market economy treatment for antidumping for 15 years, (2) product-specific safeguards (the technical term for "anti-surge" in imports) for 12 years, (3) special textile safeguards for 3 years, (4) retention of state trading for oil and some agricultural products. |
Most commentators focus on how WTO would negatively impact the inefficient SOEs -- which is a fair observation. But in net terms, China would benefit from WTO and the challenge for China is therefore how to effect a re-distribution and a transition. But what is also worth looking at, and indeed this is already happening, is the negative impact China's WTO will have on other developing countries. A study by the World Bank, for example, highlighted that countries such as India, Turkey, Indonesia, etc. would suffer in net terms because of China's WTO (largely through the more secure market access by Chinese products in developed markets, notably in textiles and garments).
|
|
| K.C. Kwok |
|
|
| This memorandum is issued by Standard Chartered Bank and is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Opinions expressed herein are subject to change without notice. This memorandum has been prepared solely for information purposes and for circulation and no responsibility is accepted for use of or reliance on information provided herein. This memorandum does not constitute any solicitation to buy or sell any instrument or to engage in any trading strategy. Standard Chartered Bank, or any company within the group of which it forms part, may have a position in any of the instruments or currencies mentioned. |
|
