Print

Mail

wiki links

For PRC, trade brings challenges

One hundred and sixty-two years ago, the more developed Western powers used guns and cannons to force China, a much older and less developed country by Western standards, to open its market.

Unable to overcome the overwhelming power from those outsiders, China was obliged to trade with them.

Although much time has passed, the world is still interested, perhaps more interested, in the Chinese market. However, instead of brutally using military force, round after round of negotiations have been conducted to achieve the goal of open trade with China.

Under unpleasant pressure, China opened its market to the world in the 19th century, and this resulted in the collapse of the ancient empire.

Now China has further opened its markets, after formally joining the WTO on Dec. 11, 2001. China wasn't forced to open its markets this time, but was willing to open its market to the world regardless of the potential impact.

So now there is a different type of pressure. China must undertake the task of being a WTO member. The WTO has enabled China to become more connected with the rest of the world and this new interdependence is certain to grow in the near future. The task is tremendous.

Ancient China did not want to associate with foreigners, especially those from the Western world. It is a different story now, since the growing interdependence between China and the world is becoming significant.

Interdependence is not expected to go smoothly, as more trade conflicts are almost certain to occur.

These conflicts may turn out to have an economic impact on the people of China. One can conjecture that conflicts will be resolved eventually, since long-lasting conflicts do not benefit China or its major trading partners.

The challenge of greater interdependence is that China will have to ensure that its economic and trade policies do not lead to disagreement with others, and will have to increase its cooperation with its major trading partners, so that everyone benefits.

This will require tremendous effort from China, both domestically and internationally. It is noteworthy that "the rest of the world" includes Taiwan.

Before its entry into the WTO, China had already obtained membership in several multilateral and regional organizations, such as Asia-Pacific Economic Cooperation (APEC). APEC is an organization to which China has paid a great deal of attention.

When China takes these international stages, the major challenge that China inevitably has to confront is globalization.

To some, globalization is the process that leads to prosperity and results in enhancing people's quality of life, but others consider globalization a tactic used by developed countries to exploit valuable resources from developing countries and to sustain their dominance.

Globalization is mainly promoted by developed countries, and the anti-globalization movement that is supported by the developing world has generated significant conflict.

China, instead of joining the debate about the advantages or disadvantages of globalization, should try to be a constructive partner in multilateral organizations. In addition, whenever political or economic conflicts occur between developed and developing countries, developing countries will expect China to display its leadership. This will be another challenge for China.

What is the best way for China to be a constructive partner on the global stage? Here are three ideas that China should take into account:

First, follow rules and regulations so as to show developing countries the leadership that China possesses.

Second, find ways to communicate with developed countries, and countries with different interests, including Taiwan, and avoid unnecessary protest and meaningless confrontation.

Third, fully implement the commitments that China has made since it joined multilateral organizations.

By doing these things, China will be able to gain the trust of both developed and developing countries. However, it will not be easy because China has difficulty acting normally when it deals with Taiwan.

Should China lead developing nations against the developed nations, since globalization could cause damage to developing countries?

In order to answer this question, various interests represented by developed and developing countries need to be addressed first.

On one hand, developed countries have emphasized trade and investment liberalization at multilateral economic events for a long while. They would like to remove tariffs, unnecessary regulations and other trade and investment barriers so as to play the game of comparative advantage.

On the other hand, developing countries are interested in exploring advanced technology transfer and assistance, in order to develop their economies faster, more efficiently and more cheaply.

The failures in Seattle and Cancun suggest that the ongoing globalization dispute will not easily be resolved. The whole world, however, is expecting a successful round of negotiations, regardless of the fact that there might be no settlement of this dispute.

What will happen? Is one group waiting for the other to back down and become the first willing to compromise? Since things are so uncertain, is it time to shift focus and put the dispute aside?

Instead of working against the further trade liberalization that has been proposed by developed countries, China can raise its own proposals instead.

Emphases on economic and technical cooperation can be adequately reflected in such proposals.

There are three pillars in APEC: trade and investment liberalization; trade and investment facilitation; and economic and technical cooperation.

China has been quite successful dominating the third pillar. Now, China can try to do the same thing in the WTO. With some good manners from China, Taiwan will be happy to lend a helping hand.

China will be confronted with great pressure for reform, both internationally and domestically, because of its entry into the WTO. It will be very difficult for China to maintain its current policies in a situation that is so dynamic.

A new era has come and China has to change accordingly. China has to lead gracefully.

And China has to treat its neighbors in a friendly way.

Darson Chiu is an assistant research fellow in the international affairs division of the Taiwan Institute of Economic Research.
This story has been viewed 2384 times.