Looking Back, Looking Forward: China and the World Trade Organization 10 Years after Accession

About the series

Following more than 15 years of exhaustive negotiations with most of the 150 members of the World Trade Organization (WTO), in December 2001 China officially acceded to the global trading regime. 

In the lead up to China's accession, many international experts were concerned that if it was not handled appropriately, China's entry could undermine the entire global trade system. Some experts were anxious that the WTO would be swamped with dispute cases.  Others were concerned that China would not fully abide by the norms of the global organization, including "non-discrimination" and especially the WTO's elaborate and precise "transparency" requirements — unless compelled to do so through special compliance measures.

To gain entry to the WTO, China eventually signed a long and historically unprecedented list of accession obligations, which the traditional trading powers demanded in order for China to gain membership. Against the wishes of those inside China who felt that accepting this list of liberalization and peer review requirements amounted to "selling the farm," China's leaders put their support behind joining the WTO. Chinese authorities also agreed to abide by an eight-year "Transitional Review Mechanism" process, called for by the established powers as a safeguard to ensure that China would meet its WTO membership obligations. Nationally oriented commentators inside China felt that Beijing's trade officials had willingly subjected China once again to "foreign humiliation," harkening memories of the late Qing dynasty period. But China's ruling authorities stood firm in their commitment to join the global trading regime.

In the United States, the agreement for China's WTO accession was sold to the domestic audience as a coup for the United States, and for the "great democracies" more broadly.  The Clinton administration portrayed Beijing's acceptance of the long list of conditions as being all "upside" for American national economic and geostrategic interests.

Looking back, most observers would agree that China's accession to the WTO in 2001 was one of the major steps forward in global governance over the past decade. With that single step, the global trading regime became significantly closer to being universal in its membership — only the Russian Federation and 30 smaller economies remain outside the WTO. 

What has China's WTO accession meant for the global trading system beyond this point of global representational legitimacy and for China? What have the implications been for the structure of the world economy? What are the key considerations looking forward, especially given that global trade negotiations have been deadlocked for a decade? What may the lasting consequences be of the negotiations over China's WTO accession, in terms of lessons that Beijing has drawn for global economic governance? 

The expert commentaries that follow will explore the aforementioned questions on China and the WTO. The common policy message emerging from the commentaries is that, as dramatic as the changes have been over the last decade, the next 10 years will be even more challenging for the global trading regime. Innovation in international policy coordination and institutional arrangements will be crucial for ensuring a prosperous, stable and sustainable world economy.

In the Series

At 10 years’ remove from the sturm und drang in American policy circles over China’s accession to the WTO, the entire episode rests more quietly. So much has happened in China, in the world economy and in US-China economic and political relations since 2001. The burning questions that surrounded discussions in the run-up to China’s accession to the WTO seem, to many observers, muted and diminished. The multi-year “phase-in” process accompanying some of China’s most far-reaching adjustments has expired.
China watchers will remember that just over a decade ago, there was no topic more hotly debated in China, or seen as more important to the country’s future, than the anticipated accession to the World Trade Organization (WTO). In a memorable 2001 article in The China Quarterly, Joseph Fewsmith wrote that: “Ironically, after years of fuming that the West was trying to keep China out of the trade body, the prospect of actually joining has set off a flurry of speculation over the impact on China’s economy and many have begun questioning the benefits of membership.”

10 years after China joined the WTO, the scenarios of gloom and doom have not come to pass. So, what did happen?
Prior to joining the World Trade Organization (WTO), the common perception in China was that the WTO and its forerunner, the GATT, belonged to “the Club of the Rich,” in which wealthy countries imposed rules on poor and weak developing countries. Now, the WTO is one of the most widely recognized international organizations within China, along with the United Nations (UN), the World Bank and some specialized agencies of the UN, such as the World Health Organization.
After 15 years of hard bargaining, China's formal accession to the World Trade Organization (WTO) in 2001 meant that one of the world's great economic and trading entities — now the world's number two exporter — became subject to mutually agreed international rules, regulations and practices. The tenth anniversary of China's accession to the WTO provides an auspicious occasion to reflect on the current state of the global trading regime, and on China's significance in the system.
Since its accession to the World Trade Organization (WTO) in 2001, China's growth and development has built heavily on its increasing integration into the global economy. Export growth in the three years prior to the 2008 financial crisis was nearly 30 percent. Although its export growth was negative during the crisis, China has since rebounded to pre-crisis rates and it is now the world's second-largest trading country after the United States.