Fewer Barriers and more opportunities
After almost 15 years of negotiations, China is finally standing before the door of the World Trade Organization. China has made deals with all the members' countries and the China working group in the WTO has accomplished its historic task. It's widely accepted that this step will not only have a great impact on the Chinese economy, but also on business around the world.

The China - WTO agreement locks in reforms that will have the clear effect of reducing the 'command and conquer' elements in China's economy adding incentives toward increased economic liberalization.

Free import and exports of goods
Before 1978, the government controlled almost every aspect of the movement of goods. Everything from the type of goods, and the terms under which it entered the country, to who was authorized to import or export. Importing/exporting and distribution rights were really the privileges of only a few state owned firms.

Since 1980, the government has gradually relaxed its grip, and as a result, the Chinese economy has been booming as Westerners and Japanese pour investment into the country. The WTO commitments will enable continued growth and provide a clear schedule in which to increase development. For instance, China has agreed that in 3 years, all individuals and entities in China will be able to import products previously restricted such as: agricultural equipment, automobiles and auto parts, chemicals, civil aircraft, and construction equipment. Within 3 years foreign firms will be able to establish own and operate their own means of distribution and wholesaling, retailing, maintenance and repair and transportation. These rights will apply to both Chinese and foreign businesses.

Free flow of information though Information Technology and telecommunications.
Perhaps the most liberating aspect of WTO accession is its potential impact on China's state dominated telecommunications and Internet sectors. In 2000 only 12 percent of households in China had telephones - a number expected to grow to 22 % by 2003. The number of Chinese Internet users is exploding. At the beginning of 1999, there were approximately 2 million subscribers in mid 2001; over 26 million subscribers are now online. This growth will be dramatically fueled by the foreign investment in China's telecommunications sector made possible for the first time ever by the WTO accession agreement. China's commitments mark the first time it has agreed to open its telecommunications sector, both to direct investment in telecommunication and to a broad range of related services. Accession will also open new markets for information technology. China will participate in the Information Technology Agreement and will eliminate tariffs on products such as computers, semiconductors, and related products by 2005.

Meanwhile, China has made commitments in all major service categories with the reasonable transition periods to eliminate most foreign-equity restraints, especially in sectors where the member counties have a strong commercial interest. China has also agreed to cut tariffs, eliminate quotas and remove historical barriers or foreign companies to set up joint ventures or wholly foreign owned doing business in China. China's commitments, combined with new markets opening, and the explosion of information technology in China suggest a tremendous and unprecedented economic growth in the coming years.

For more information regarding the benefits and ramifications of China's accession into the WTO, please visit The United States-China Business Council.