Question: How has China performed since its accession to the World Trade Organization?
China, under the leadership of the Moo Zedong, faced many complications domestically, and its ideology was based on Marxism-Leninism alongside Chinese revolution.On the other hand, the approach of Mao structured the country into a government controlled production and prices. However, Mao’s leadership faced many negative campaigns which led to the Great Leap Forward and resulted in millions of deaths in the country. Hence, Mao backed from his responsibilities and handed over to the senior leader, Deng Xiaoping.
Similarly, following the death of Mao, Deng became thenewleader of the People’s Republic of China, and he immediately took the export-led strategy to grow in the market. On the other hand, Deng the initiated the agriculture support program to feed its growing population on priority basis through the household responsibility system. In this system, thegovernment leased the land to the farmers and asked them to sell products in the market. It brought many incentives and doubled the agriculture output in the country, and through this way, China becameself-sufficient to feed its population.
Furthermore, the government performed well to adhere to its export-led country, and it further directed the Township and village enterprises (TVE’s) to produce simple products for the exports.Due to these reasons, TVE’s grew annually by 9% between 1978 and 1996, and it employed 135 million people.Apart from that, after 15 years of negotiations with the WTO authorities, China entered WTO, but at some agreed reforms in the country to facilitate foreign enterprise, free trade, and increased transparency of the Chinese law.
Similarly, Chinaincreased its sales of goods and products in the market to facilitate the foreign companies, and it also provided national treatments to the foreign banks, as well as it increased the transparency in laws and regulations. However, these restrictions did not prevent China from becoming the world’s largest exporting country in 2009. Similarly, China went on to follow as imposed by WTO, as well as it focused on the theft of intellectual property. Additionally,a study identified that China is the largest producer of replicated products, and that it copies foreign patents. Moreover, China was athird largest country in the world for aninternational patent filer in 2014.
China has the unconventional approach towards export growth rather than free trade, openness to trade, and planned economy.Nonetheless,its exports were three times larger than per-capita income, which included electronic items and auto parts. Moreover, since 2001 to 2014, the exports of Chinaincreased by 15%, which made Chinathe world’s largest trade surplus of $595 billion in 2015, however that surplus was not because of export, but it was also due to the decrease in the imports.Aside from the growth of the country, China controls all the capital account transactions including the capital market securities, commercial and financial credits, real estate transactions, and direct investment as well. This resulted in capital inflow in the country, however there was aninsignificant capital outflow. Consequently, China’s foreign exchange reserves increasedsignificantly due to which, China is one of the largest US Treasury bill holders.Apart from that, after its entry into the world trade organization, it performed well in the trade and FDI in the country…………….
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