Two Faces of China: WTO & ASEAN

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Since Chinas entry to the World Trade organisation (WTO) in 2001, the country has undergone a massive reform programme at home, and has rapidly integrated into the world economy. As a major economic player, China is now the third largest trading nation – contributing 12 percent to world trade growth, and 10 percent to world economic growth, last year. It has also provided new opportunities for inward investment, especially in the services sector, and has forced local companies to address new competition as well as issues of globalization. WTO membership also placed the Chinese government at the centre of an international, rules-based organisation, and has been a catalyst for change in policy-making and implementation.

Despite this, China is taking a back seat at the current WTO talks in Hong Kong, although it is supportive of the meetings aims including the opening up of agricultural markets by developed nations in return for access to the service sector in the developing world. It has been suggested that China prefers to engage in bilateral discussions, as it is less experienced in multilateral talks. As Li Yueyin, from the Shanghai WTO Consulting Centre, put it China isa major trading country but it’s not a major world powerChina as a new WTO member does not have much negotiating power.”

However, China has been more active in talks with its regional partners in the Association of Southeast Asia Nations (ASEAN), which held talks in Kuala Lumpur this week. In a forum where the Chinese do have a strong influence, Chinese Premier Wen Jiabao proposed five initiatives to develop: stronger bonds of friendship; a planned framework for relations; a China-ASEAN Free Trade Area; new priority areas of cooperation; and increased personnel exchanges.

China is likely to continue extending its economic and political influence in the region, and further afield, as it becomes more outward-looking, and as it deals with protectionist moves from the US and EU.

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