About now is the 20th anniversary of China acceding to the World Trade Organization, one of the most important moments in modern Chinese history. It is hard to overestimate the impact that this event had on the country, and indeed on the world. It was a key moment, if not THE key moment, in the process of globalization that has changed the economies and societies of every country and community on the planet in the past few decades. The biggest winner in that process has been China by a big margin. Entry into the WTO was the signal that allowed major investment funds to flow in China—FDI went through the roof only after WTO, because it provided the excuse everybody needed that China risk was acceptable. Now China is a part of the global system, has acceded to the rules and regulations governing world trade, it can therefore be assumed it will be a good neighbor. Ditto trade.
WTO membership opened up the world to Chinese exports and the positive impact on China’s economy and society was just out of sight, but it was huge. Where did the money come from to build everything that has been built over the last 20 years? The trade and investment triggered by WTO membership. To get in, China had to agree that it would meet certain conditions within 15 years to brings its economic system into line with other countries. Did it meet them? Not entirely. And that is a problem that continues to fester. But WTO membership and the China export boom that followed, also resulted in huge changes elsewhere, first, China brought prices for almost all consumer goods down dramatically, effectively raising standards of living. It also killed industries and millions of jobs, all over the world because China became the factory of the world. This was not all bad news though, because huge numbers of manufacturing workers in the West, for instance, had to figure out a new way, and they mostly did, and are now less vulnerable to the dangers of automation and robots than the armies of workers who still work every day at factories across China.
Was it a good deal for the rest of the world? Was a win-win ever a possibility? For history to say. But it is worth mulling the significance of that moment all those years ago. It changed almost everything.
Have a good weekend.