China joined the WTO 20 years later: from the man who negotiated it
On December 11, 2001, China officially joined the World Trade Organization (WTO) and became its 143rd member. Since then, the country has gradually opened up its huge market and attracted massive foreign investment. The wide variety of products and services from all over the world have greatly improved the lives of Chinese consumers. Today, two decades later, China has become the world’s second-largest economy and largest exporter. But all of this would not be possible if China stayed outside the WTO.
Long Yongtu was the chief negotiator for China’s resumption of the General Agreement on Tariffs and Trade (GATT) and its accession to the WTO. Below is an excerpt from his most recent May 14 speech at the Center for China and Globalization, a Beijing-based think tank.
Why didn’t we join the GATT even after being admitted to the United Nations? Because our thinking was not free enough, we thought it was a club of rich nations, and there was not much to gain. In fact, as one of the original 23 signatories of the GATT, China did not need to negotiate with anyone to join and all it took was a request. But we thought it was a wealthy club run by western nations, so we didn’t participate.
China’s decision to join the WTO meant two important steps forward. By joining the WTO, China promised the world that it would adopt a market economy. This was an important transformation because the concept of the market economy was still taboo before 1992. The market economy was the equivalent of capitalism. The second step forward was our promise to open our market to the world, and with great openness in certain areas.
In 1992, Deng Xiaoping gave a speech and made it clear that there is a market in socialism and planning in capitalism. He said that capitalism and Western countries do not have a monopoly on a market economy, which could also be done under a socialist system.
When we promised to adopt a market economy, we made it clear that it would be a socialist market economy. But others could not understand why it was necessary to add “socialism” or how it would make a difference. I still remember that after making the deal on September 17, 2001, a reporter asked me if it was okay to get rid of the word “socialist”, because China had already joined the club of market economies. We said absolutely no. As for the WTO, we were the first to do so.
As I always say, there are two criteria for measuring the development of a country or a region. One is the livelihood of the people. Are people benefiting from economic growth? Another is social equality. Is society becoming fairer? Can we bridge the gap between the rich and the poor? Has the regional gap narrowed? We are talking about one term here: the socialist market economy. It is a market economy that values people’s livelihoods and social equity. Over the past decades, hundreds of millions of people have been lifted out of poverty in China through targeted poverty reduction. It is one of the most important efforts to build a socialist market economy.
When we agreed to adopt a market economy, we also insisted on being recognized as a “developing country”. The market of a developing country must open up according to the progress and stage of a developing country.
It is fair to say that in 2001, China and the United States embarked on two different paths. That year, the United States began to make counterterrorism its strategic priority. But when China joined the WTO, it accelerated its development in reform and opening up, which has allowed us to catch up with the United States over the past two decades. In 2001, China’s GDP was lower than Italy’s in eighth place, and we are now No. 2. At the time, the United States had no reason to consider China as its largest competitor. They didn’t put us on their radar.
China’s accession to the WTO is in fact a win-win situation. At that time, senior Chinese officials said it shouldn’t be seen as a victory for China alone. We, the negotiating delegation, were not too festive as it was meant to be. It was reasonable for China to join the WTO because the country already had its legal seat reestablished at the UN. China’s participation in the WTO has changed the outlook for multilateral trade, as well as the direction of world trade. It benefits people all over the world, especially people in developing countries. It is also extremely beneficial for developed countries, including the United States, which is one of its biggest beneficiaries.