On Sunday, China celebrated its 10th anniversary as a member of the World Trade Organization, a trading partnership that over the decade has provided Beijing with opportunities to advance its exports and welcome imports at a pace not otherwise available. Ironically, on the same day, Fitch Ratings announced it was preparing to cut its growth estimates for Asian nations, as the debt crisis and the state of the world economy takes its toll on the region.
Bloomberg reported that Andrew Colquhoun, Fitch’s Hong Kong-based head of Asia-Pacific Sovereigns, said that its quarterly predictions for growth would be released “shortly” and would reflect downgrades for Asian countries. China has already felt the effects of a receding world economy, and has begun implementing steps to support its own economy in place of the brakes it had been applying to cool what had been a too-hot economy.
Beijing had worked for 15 years to win a membership in the WTO, and its membership paid off as the country became the biggest exporter in the world and the second-biggest importer. Its trade in wares ranging from electronics and appliances to clothing and toys reached nearly $3 trillion in 2010, from 2001’s total of $510 billion; exports and imports have both nearly quintupled.
Now, however, amid calls of protectionism and currency manipulation from countries such as the U.S., China finds itself the target of a push to play by the rules the rest of the group observes. Karel De Gucht, European Union trade commissioner, said in a statement, “This spectacular rise would not have been possible without the open global trading system that China was able to benefit from during the past 10 years.”
He added, “At the same time, China is having to increasingly recognize and respect not only the legal responsibilities it now faces as a member of a global rules-based body, but also the WTO ‘spirit’ of promoting open markets and nondiscriminatory principles in its domestic legislation, and the enforcement of it.”
If the U.S. is the loudest voice of complaint about China's business tactics, filing some 12 complaints with the WTO, Europe is second. The
China, of course, brushes off such complaints as insignificant, as well as a comment made by U.S. Ambassador Michael Punke. During a WTO General Council meeting on Nov. 30, Punke cited a “perception among WTO members that Chinese government authorities at times use intimidation as a trade tool. China seems to be embracing state capitalism more strongly each year, rather than continuing to move toward the economic reform goals that originally drove its pursuit of WTO membership.”
Yi Xiaozhun, China’s ambassador to the WTO, dismissed Punke’s comment a week later, saying, “I don’t know what he’s talking about. We need evidence.” Instead, Yi said, “The biggest challenge for us is to continue our opening-up process and deepen our economic reform domestically. China benefited a lot from its opening, so we know that we will continue to do it for our own interest, and we also hope other countries, especially our major trading partners, will do the same.”