[Epoch Times December 15, 2021]This year marks the 20th anniversary of China’s accession to the World Trade Organization. During these 20 years, China has not only surpassed the United States to become the world’s largest trading nation, but also the world’s second largest economy. body. Not only that, now China has become the biggest strategic competitor facing the United States in the 21st century. It can be said that the CCP’s accession to the WTO in 2001 completely changed the world trading system and global geostrategic pattern.
It has been commented that in the 20 years since China’s accession to the WTO, the United States and other Western countries did not expect that China, as a non-market economy, would develop to such a large scale as it is today under the framework of the WTO. Moreover, the CCP’s non-compliance with the rules has also Having dragged down a WTO, the United States now even seeks to establish a new trade agreement to defend its economic interests. Then let’s pay attention to what the CCP government has done in the past 20 years since its accession to the WTO.
What has China brought to the world 20 years after its accession to the WTO?
On December 11, 2001, China formally joined the World Trade Organization (WTO). This was one of the most significant geopolitical events affecting the world after the Cold War. As early as 1979, the same year that China and the United States officially established diplomatic relations, China and the United States signed the Sino-U.S. Trade Relations Agreement in Beijing. Since February 1980, they have given each other MFN status. However, the United States has given China MFN status. It is proposed by the President every year, and then postponed after deliberation by Congress. Moreover, after the Tiananmen Square incident in 1989, in 1995, U.S. President Clinton still extended China’s most-favored nation status and decoupled most-favored-nation status from human rights issues. During his second term of office, in October 2000, Clinton also signed the Permanent Normal Trade Relations Act with China, thus ending the annual review process for China and boosting the CCP’s accession to the World Trade Organization (WTO).
The passage of this bill has much more impact on the United States and the world than expected. In the past, the US President’s annual review of China provided checks and balances in restricting and balancing China’s trade policies. The US also had the idea that while promoting China’s economic development, it could help China move towards market liberalization and politics. Democratization. Moreover, due to the existence of this annual review, American companies hesitate to invest in China. However, the Clinton administration abandoned this key tool, and the United States has gradually abandoned the principle of linking trade with human rights. It can be said that this abandonment has led to Had catastrophic consequences.
Then in the second year, on December 11, 2001, after China formally joined the World Trade Organization, China’s share of the world economy rose from 4% in 2001 to 17.4% in 2020, becoming a ” World Factory”. According to official data from the Communist Party of China, China’s GDP ranking squeezed out the United Kingdom in 2006, surpassed Germany in 2007, and surpassed Japan in 2010 to become the world‘s second largest economy.
At the same time, the US trade deficit with China is also rapidly expanding. From this picture in the BBC report, it can be seen that the US trade deficit with China reached 419 billion U.S. dollars in 2018, which was five times the trade deficit in 2001.
Not only that, competition from China has severely damaged labor-intensive industries and employment in the United States. Robert Scott, an economist at the Economic Policy Institute, predicted as early as 2000 that China’s accession to the WTO would cause serious job losses to the United States. Scott said that China’s accession to the WTO This led to a sharp increase in the U.S. trade deficit. By 2018, imports from China caused the U.S. to lose 3.7 million jobs.
However, the most fundamental problem is not the size of the trade deficit, but the CCP’s failure to abide by its WTO commitments.
In 2015, the Information Technology and Innovation Foundation (ITIF) of the United States published a report titled “False Promises: The Huge Gap between China’s WTO Entry Promises and Practices.” In terms of market access, restrictions on technology or intellectual property transfer, and subsidies for state-owned enterprises (SOE) and export industries, the CCP has completely failed to comply with WTO commitments and membership requirements.
For example, in order to stimulate exports, the Chinese Communist Party implements an export tax rebate policy. In order to earn tax rebates, some companies export goods at prices below cost, resulting in Chinese goods being sold cheaper abroad than at home. In addition, the industrial subsidies and low-interest loans implemented by the CCP government violated WTO principles. U.S. Trade Representative Katherine Tai once emphasized in this year’s “Evaluation of Trade Barriers among Countries” that China has not provided a complete notification of central government subsidies in the past two decades since its accession to the WTO.
The CCP promised that during the 15-year transition period, it will gradually open up financial services, information networks, film and television culture, and agricultural products. However, at the end of 2016, after the transition period expires, these four markets will still be closed.
In addition, the CCP also promised to gradually remove market access restrictions, open up foreign investment, and allow wholly-owned, joint-venture, or wholly-owned subsidiaries. However, in areas where China allows foreign capital to enter, foreign companies are forced to carry out technology transfers in accordance with the regulations of the Chinese Communist government. In addition, the CCP also steals the intellectual property rights of other countries, including selling counterfeit goods and pirated software, and stealing corporate secrets. The non-profit organization National Bureau of Asian Research (National Bureau of Asian Research), once estimated in a 2017 report that the economic loss of the United States caused by the theft of intellectual property rights can be as high as US$600 billion each year, of which the largest loss comes from China .
This is why, in the 2018 China-U.S. trade negotiations, the U.S., in addition to demanding reductions in the trade deficit, also required China to reduce import tariffs to a reciprocal level, and to give U.S. investors fair and non-discriminatory market access. , As well as ending state-owned enterprise subsidies and other government support, stopping the theft of intellectual property rights, stopping the forced transfer of technology, and so on.
The foundation of free trade is: a free and open market, freely competitive enterprises, and a market mechanism that encourages competition. The nine basic principles of the WTO can also be summarized into three categories: “non-discriminatory principles”, “fair trade principles” and “transparency principles.” However, while enjoying the benefits of the WTO, the CCP continues to undermine the basic principles of the WTO. It stimulates exports through a series of unfair and unethical means such as exchange rate manipulation, government subsidies, and the theft of intellectual property rights, which constitutes an unprecedented global free trade system. Threat.
In fact, from the very beginning, the CCP did not have the sincerity to abide by WTO rules, and defrauded the United States of MFN status by infiltration and fraud. Former U.S. Department of Defense official and “China Communications” Bai Bangrui (Michael Pillsbury) disclosed in a congressional hearing in July 2018 that a mainland Chinese expatriate confirmed that the CCP used systemic fraud and deception between 1995 and 2000. The U.S. Congress passed the review of granting China the most-favored-nation status, paving the way for China’s accession to the WTO. On the one hand, the CCP has constantly released false propaganda messages in its frequent contacts with the United States, making the U.S. believe that the CCP will abide by WTO rules. The CCP also studies the wrong path in U.S. politics and uses internal differences in the U.S. political circles to infiltrate and operate. .
Some Western politicians and theorists once expected that China’s economic development would trigger political democratization. For example, Clinton once said that with the development of the Internet, China will become more free. But everyone has also seen the fact that the CCP suppresses freedom of speech on the Internet, and uses high-tech methods such as the Internet and face recognition to strictly monitor the people, intensify the persecution of dissidents, and force foreign companies in China to help the CCP. Implement monitoring or suppress freedom.
Nowadays, countries all over the world are aware that the CCP is the disruptor of global trade rules, because the CCP government-led model is completely incompatible with the market, completely opposed to the rule of law, and completely contrary to WTO principles. However, the WTO’s dispute settlement mechanism has nothing to do with the CCP. The United States has won almost all WTO lawsuits filed against China, but they have no real value, because the CCP has not changed at all and is still doing its own way. Therefore, the Trump administration will bypass the WTO and use the authorization of Section 301 to defend the economic interests of the United States.
The WTO urgently needs legislative changes, but at present, the WTO organization is at a deadlock. In sharp contrast, many other regional trade agreements have emerged. For example, the “Comprehensive and Progressive Trans-Pacific Partnership Agreement”, referred to as CPTPP, and the “U.S.-Mexico-Canada Agreement”, as well as bilateral free trade agreements between various economies, and so on. The topics covered by these regional trade agreements and bilateral free trade agreements are often broader than those of the WTO and have a higher level of openness. Therefore, some experts believe that these regional trade agreements are the direction of future global trade development.
At present, the CCP has participated in and led the “Regional Comprehensive Economic Partnership Agreement,” which is RCEP, and announced its formal application to join the CPTPP in September. However, Japan, Australia and other member states are all questioning whether China’s current system meets the high standards of this agreement.
We have seen that countries all over the world must learn a lesson from China’s accession to the WTO, that is, it is unrealistic to think that allowing the CCP to join a global free trade system can change the CCP’s ideas and practices. Because the CCP’s political system determines that it has its own set of political system, ideology, and economic model, it is impossible to make concessions on the CCP’s core interests.
Since the reform and development, the CCP is at the end of the road
However, today, Western countries such as the United States and Europe have also begun to recognize the reality, and the Sino-US trade war has long spread to the levels of technology, finance, politics, and even ideology and national security. The international environment facing the CCP is rapidly deteriorating, and with the increasing political uncertainty in China, the continuous strengthening of regulatory measures, and the gradual increase in environmental protection thresholds, China’s business environment is also deteriorating further. A large number of foreign companies have chosen to withdraw from China. .
Today, the low-cost advantage of “Made in China” is gradually losing, and the status of the “world factory” has been unstable. Countries have begun to move their supply chains back to their home countries or to regions such as India and Southeast Asia. Moreover, the CCP used to rely on forced technology transfer and theft of intellectual property rights to obtain high-tech “loopholes” at a very low cost, which is slowly being blocked by the United States and other countries.
Although the leaders of the Communist Party of China proposed to carry out economic transformation and shift to an economic model based on internal circulation. But does the “inner loop” really work?
There is a review article on the Internet that is very sharp. Let’s share it here. The author of this article said that there is no Western capital, technology, market, management and operation methods, no US-led international financial and trade rules and mechanisms, and no harmony. The stable international security environment, the so-called “rise of China” and “Chinese miracle”, are all flowers in the mirror and moon in the water. Do you really think it is brought about by the leadership of the party, the self-confidence of the system and the hard work and bravery of the people? Therefore, whoever believes in the “inner loop” is a fool! Unless someone wants to close the door and live the “hard days” and “poor days”.
The article also questioned that, now, reforms have become “return to the old times”, and openness has become open to Africa and open to backwardness. However, how can Africa, which has no currency purchasing power, become China’s trading partner? At most, it is the target of poverty alleviation. History will inevitably prove that China’s wave of “abandoning white and black” and “abandoning high and low” will inevitably fail. The “inner loop” will not work, and the “outer loop” must also be the “western loop” instead of the “black”. cycle”.
At that time, China carried out economic reforms and joined the WTO in order to obtain greater economic growth and to use it to consolidate the legitimacy of its governance in order to achieve greater political ambitions. However, a freer market, although it can encourage competition, after the West abandoned the principle of linking trade with human rights, the CCP is like a wild horse that has taken off its hold, expanding wildly around the world, and now, the United States is also 20 years later. I have to reflect on the bitter fruits that it has caused. However, the CCP is also tasting the evil results it has caused. After two decades of unscrupulous and rapid expansion, almost all the kinetic energy to boost the Chinese economy has failed. The CCP, which has no way out, is heading for a complete regression. On the way back.
Institute of Finance and Economics
Planning: Yu Wenming
Written by: Li Songyun
Editor: Wei Ran, Yu Wenming
Editing: Songs
Producer: Wen Jing
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