China's entry to the WTO: win-win for China and the world

Editor's note: Liu Chunsheng is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

Since its formal accession to the World Trade Organization (WTO) in 2001, China has undergone radical changes. As part of the global trade system, China has not only spurred its own economic growth but also significantly shaped the structure and development of the world economy.

At the beginning of its WTO membership, China's annual trade volume was merely around $500 billion. According to World Bank data, by 2021, China's goods trade turnover had exceeded $5.6 trillion, significantly increasing its share of global trade volume. Furthermore, China has become the largest goods trading nation and a primary trade partner worldwide.

China's GDP stood at less than $1.4 trillion in 2001, and grew to over $15 trillion by 2023. The institutional reform measures brought by its WTO accession have facilitated the opening of China’s economy and the regularization of its markets, transitioning China from a manufacturing-based economy to a more diversified one.

Post-WTO accession, foreign enterprises massively increased their confidence in the Chinese market. According to China's Ministry of Commerce, actual use of foreign investment in 2021 reached $144.1 billion, nearly three times the amount of $46.8 billion in 2001. Investments by foreign enterprises in China's high-tech, high-end manufacturing, and service sectors have promoted industrial upgrading.

Along with rapid economic growth, China's infrastructural construction leaped forward – urban and rural landscapes have changed extensively. China's urbanization rate has increased from around 36 percent in 2001 to close to 60 percent in 2020, with the country leading globally in the total mileage of highways and high-speed rail networks.

Both R&D input and technological outcomes in China have seen a qualitative jump. As per the World Intellectual Property Organization, China has ranked first in the number of international patent applications for several consecutive years by 2021. China has now achieved significant global market shares in cutting-edge technological fields such as 5G, artificial intelligence, and electric vehicles.

Based on data from the National Bureau of Statistics of China, the per capita disposable income of urban residents increased from 6,466 yuan ($900) in 2001 to over 47,000 yuan in 2022, with rural residents' income growing at a similarly impressive rate. More importantly, hundreds of millions of Chinese people have been lifted out of poverty, significantly improving the overall standard of living of the population.

China's accession to the WTO has not only greatly promoted the growth of its trade and the degree of openness, profoundly affected its economic structure, social development, and every aspect of people's lives, but also comprehensively impacted global trade, investment, and economy.

According to WTO statistics, since China joined the WTO in 2001, global trade has experienced tremendous growth. China's integration into the global trade system has expanded markets, facilitating the flow of goods and services worldwide. China has become one of the world's largest trading nations, with its exports and imports rapidly increasing over the years. This provides vast market opportunities for other countries, strengthening international economic ties.

After China acceded to the WTO, there was a significant transformation in global manufacturing. China rapidly rose as the world's factory, offering other countries an efficient and low-cost production base. Numerous renowned companies shifted their production bases to China, leveraging its abundant labor resources and increasingly sophisticated industrial chains, driving the globalization of the manufacturing industry.

China's accession has provided global investors with broader investment opportunities. Foreign companies have entered the Chinese market, expanding their investment, and offering a more open channel for global capital flows. Many multinational companies have established joint ventures in China, strengthening technological cooperation. This not only propels the upgrading of the Chinese economy but also fosters global innovation and technology exchange.

China's accession has stimulated the reorganization and adjustment of global supply chains. Many enterprises have moved their production bases to China, forming a global network of industrial chains. After the outbreak of the pandemic, the stability of China's supply chain became a cornerstone of the global economy. This highlights China's importance in global supply chains and prompts other countries to reevaluate and adjust their supply chain strategies.

China's accession has brought about significant technological innovation and knowledge transfer globally. International companies collaborate with China, sharing technology and experience, and driving the improvement of global technological levels. China has become a global leader in 5G technology and the electric vehicle sector, injecting new momentum into global technological development. International collaboration with Chinese enterprises has contributed to advancing global technological innovation.

China's entry into the WTO plays a positive role in the world economy. China's rise injects new vitality into the global economy, providing essential lessons for building an open world economy.