China and the WTO, a decade later.

• Author: Kranc, Joel
• Position: GLOBAL GLANCE - World Trade Organization

It would have been inconceivable just 10 years ago to think of a riot occurring in China over the launch of a new cellphone. And yet earlier this year that is exactly what happened--in Beijing in front of a flagship Apple store. The sale of the latest iPhone was halted after riots broke out, store security guards were injured and frustration levels grew in an already tired and anxious crowd.

China is Apple's fastest-growing market, ranking just behind the U.S. in terms of revenue for the iconic American-based company. Such consumer anticipation of the latest products in China can be viewed as a microcosm of the opportunity for U.S. and Canadian businesses considering expansion in Asia.

Despite the state of the Chinese economy and, with the country having marked its 10th anniversary as part of the World Trade Organization, North American businesses still have a great deal of clue diligence and relationship-building ahead in order to become part of the Chinese economic growth story.

GAINING GROUND

In the years since China joined the WTO, it has emerged as the world's second-largest economy and one of the three largest trading economies.

"It's not that joining the WTO solely caused that vast expansion of China's gross domestic product and global trade power," says Robert Kapp, who served from 1994-2004 as president of the U.S.-China Business Council. "But it is to say that as China moved to accommodate itself to the requirements imposed upon it by the terms of its accession to the WTO, China made itself yet an even more attractive participant in global economic and commercial life."

And as China was positioning itself on the world economic stage--especially as it became bound by the rules and regulations of recognized international trade organizations--North American companies became even more encouraged by its commitment to live by those rules, adds Kapp.

China's massive imports and foreign direct investment of the last 30 years, says Kapp, "has now reached the point where it chooses to be much more selective in receiving international investment than it was before. The Chinese are really not interested as much now in maximizing foreign participation in the low-end, low-wage sectors of their economy."

This should not be taken to mean foreign direct investment is becoming unwelcome or undesired from Western partners. However, it should not be forgotten that the Chinese still operate on government-orchestrated plans, which dictate areas of...