Reviewing Trade Policy in China During the Transition to Balanced Economic Growth

• Published date: 01 December 2016
• DOI: http://doi.org/10.1111/twec.12476
• Author: José R. Sánchez‐Fung
• Date: 01 December 2016

Reviewing Trade Policy in China During

the Transition to Balanced Economic

Growth

Jos

eR.S



anchez-Fung

Department of Quantitative and Applied Economics, Business School, University of Nottingham, Ningbo,

China

1. INTRODUCTION

THE World Trade Organization (WTO) is one of the most relevant international organisa-

tions. The WTO has the potential to improve trade policy outcomes worldwide by pro-

moting the principles of reciprocity and non-discrimination (Bagwell and Staiger, 2002).

Accordingly, there is a large literature focusing on the organisation. Some contributions

emphasise the WTO’s achievements so far and potential to play a positive role in the face of

an evolving international trade policy environment (e.g. Subramanian and Wei, 2007; Bagwell

et al., 2016), notwithstanding the stalemate affecting the Doha Round of trade negotiations.

Other authors concentrate on the potential need to reform the organisation so it can tackle

emerging challenges (e.g. Baldwin, 2016). Therefore, the debate about the WTO and its role

in the global economy is ubiquitous in research and policy circles. Parallel to this reality, as

China captures a growing share of global trade, the intersection between its economy and

WTO affairs becomes a more fertile research topic.

This paper provides a selective discussion of the WTO’s 2014 trade policy review for

China. The organisation’s mandate includes conducting reviews of its member countries and

the diagnostics play an important part in gauging developments in trade policy across the

world. China formally became a member of the WTO in December 2001, following a 15-year

period subsequent to applying in the 1980s as part of the post-1978 reform drive. The WTO

Secretariat reviewed China’s trade policy in 2006, 2008, 2010, 2012 and 2014. During that

period, China made substantial progress in reforming its trade policy regime. But much

remains to be done and therefore it is vital to keep track of relevant efforts towards achievi ng

the desired objectives.

Reviewing trade policy in China involves dealing with an array of important topics. The

economy’s massive trade volume and overall economic performance depend on factors rang-

ing from the foreign exchange rate regime to internal competition policy to the preservation

of the natural environment. Understanding China is further complicated by the authorities’

intention to rebalance the economy and transition to a lower but more sustainable rate of

economic growth. Directing the economy towards a solid growth and development path will

involve a relentless effort to implement wide-ranging reforms including those related to inter-

national trade policy.

The rest of the paper proceeds as follows. Section 2 overviews key developments in Chi-

na’s macroeconomy. Section 3 examines leading topics in the WTO’s 2014 trade policy

I thank the Editor, David Greenaway, for the invitation to write the piece, and Amelia U. Santos-Paulino

for discussions on the topic. Any remaining errors are my own.

©2016 John Wiley & Sons Ltd

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The World Economy (2016)

doi: 10.1111/twec.12476

The World Economy