Some commentators have said that there were fundamental misalignments in understanding when China joined the WTO and we are now seeing these differing views play out on the world stage.
Do you agree with this assessment? How could a compromise be found, short of going back and renegotiating, or fighting it out in a trade war?
At the time China bargained for entry into the WTO its economy was in a much different circumstance than it is today. Seventeen years after its formal entry, China’s economic posture in relation to the OECD and other developing countries is significantly different. To the extent that concessions were made to acknowledge the long path that China would need to take to become a largely developed country, those concessions would no longer appear to be necessary. It is reasonable for China’s position vis-à-vis the OECD world to be rebalanced. This is in recognition of one of history’s great economic success stories.
The USA and the rest of the Western world have since the start of China’s reform and opening up period believed that engagement with China, particularly economic engagement, was key to integrating China into the global community on favorable terms. There has always been an understanding on the part of Western politicians and analysis, that integrating China into the global free market would gradually result in internal economic and eventually political change. The entry of China into the WTO was seen as a key milestone along that path, and at the time China was indeed demonstrating trends of greater economic and political openness.
It is clear that China never had the same goals or expectations from the WTO accession as those in the West did. China sought greater economic access because economic growth was seen as a key to stability in the nation of over a billion people. The greater economic access granted by entrance into the WTO also opened new doors to gain new IP and move up the value chain in industrialization. China implemented policies which steadily transformed its economy from a low cost manufacturing center for firing companies, to a global center of high-tech manufacturing and industry.
All the while, an central to USA’s change of attitude toward China in the past several years, China’s political system did not change in a way the USA saw as favorable. Instead, China has continued growing under the leadership of Chinese Communist Party, with great success.