Finally, I would like to say that China`s accession to the World Trade Organization is a pioneering event that has a significant impact on China, the United States, the WTO and the world as a whole. It has the potential to transform the Chinese economy, its relations with its neighbours and perhaps even (at some point) its political system. It will encourage China to be accountable to an internationally agreed regulatory framework and engage it in far-reaching economic and systemic changes to meet their WTO accession commitments. While China`s full compliance with its commitments is difficult and there are likely to be many differences of opinion on issues related to China`s accession agreement, China`s accession to the WTO remains an important step in its move towards greater participation on the world stage, a measure that the United States should continue to fully support and promote. a. World Bank Atlas Method. B. Data for 1997; not intra-EU trade. Source: Compiled by Jeffrey Schott, Institute for International Economics, based on the USTR press release of Chinese Interim Commitments (for China) and Uruguay Round Final Text (USTR: Washington, 1994) (for India). Third, further integration and the resulting acceleration of domestic economic reforms will also increase the likelihood that China will be able to meet the expectations of 1.3 billion of its population for improving living standards. On the other hand, a China in economic difficulty would impose considerable costs on the United States and the rest of the world. Fourth, the impact of a growing standard of living based on an increasingly market-oriented economy is extremely favourable to our long-term interest in developing a more pluralistic political system in China. As in the case of Taiwan from the 1950s on, a rapidly modernizing economy is likely to gradually create increasing pressure on political change, away from authoritarian domination of a single party.
In Taiwan, it took nearly four decades of rapid economic growth between the introduction of popular elections for district and city officials in 1950, the lifting of martial law and the legalization of opposition parties. Another decade passed before the first popular national election for the presidency. Although China has been holding popular village-level elections for more than a decade, it will likely take at least another decade or two of economic growth before a more pluralistic political system emerges. The results show that, although India now has a more predictable trade regime than China (mainly through its WTO membership), China`s interim accession commitments are significantly more liberal than India`s current commitments. While China is able to fully implement its WTO commitments, it may be more market-oriented than it has in India today. Indeed, China`s accession would put pressure on current WTO members, including India, but perhaps also Korea and even Japan, to open their own markets more open in a competitive liberalisation struggle. It is also important to note that China`s accession will immediately follow Taiwan`s entry, further liberalizing its trade regime.