The agreement signed between US Trade Representative Charlene Barshefsky and China's foreign trade minister Shi Guangsheng (
First of all, it is not true that China will now simply saunter into its seat at the World Trade Organization headquarters in Geneva. As WTO Secretary-General Mike Moore has rightly pointed out, China has to finalize similar talks with 28 more WTO members, among which the European Union in particular can be expected to bargain as hard as the US. Thus, although this week's agreement removes one major hurdle, the process is by no means complete.
Here in Taiwan, of course, we have to welcome the deal. But not, however, on its merits, but due to the sad fact that Taiwan's own WTO membership for which the island is qualified by any economic assessment, continues to be held hostage to China's for unwarranted political reasons. Thus, any step forward for China brings Taiwan closer as well.
In China itself, reaction was muted, and for good reason. If China enters the WTO, many different kinds of pressures for change will emerge, shaking up the society in largely unpredictable ways.
Optimists point out that further openness in trade and economics will enable China's people to raise their standard of living and give them more access to foreign goods and ideas. China will finally join the international community as a full-fledged member, as it learns to play by international rules. The process of economic reform will be accelerated, and eventually there will be spillover effects in the political realm, as greater respect for rule of law and freer flows of information push China onto a path of democratization.
Certainly there are plausible grounds for some of these views. There are increasing numbers of people in China who favor greater openness and reform, and they would certainly be cheered by WTO membership, which would strengthen their position against their opponents. The evident anxiety of hardliners and vested interests reflects the reality of this possibility.
However, the effects of WTO membership are more complex than that, and once the Pandora's box is opened, it is equally possible to construct much darker scenarios.
In the first place, the economic effects are not so clear cut. Over time, of course, genuinely freer trade will indeed raise incomes and living standards, but the adjustments required for such a closed economy as China's are likely to cause severe dislocations in the short or even medium term.
As for joining the international community, on the other hand, China's record of playing by international rules is atrocious, and there is not much reason to assume that WTO membership will change that predilection. Thus the euphoria of US and other multinational firms is likely to be short-lived, as they find themselves unable to enforce the new rules. As WTO enforcement procedures start to be enacted by many of China's trading partners, China might submit to rulings against it, but it might just as likely react against them -- as in fact the US itself has done -- rejecting international "interference" in its affairs, and reinforcing its own prickly sense of victimhood.
Finally, the linkage between economic development and democratization is by no means certain, as Singapore demonstrates. Therefore, even if China avoids economic depression and social unrest, develops a more market-oriented economy, and continues to actively participate in international organizations, there is still no guarantee that it will gracefully transform into a liberal democracy.
The fact is that China's WTO entry will present both Beijing and the rest of the world with big challenges. Will this be good for the world on not? To echo Zhou Enlai's verdict on the achievements of the French Revolution, it is still too early to tell.
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