White Paper on WTO reaffirms China’s commitments
July 3, 2018 Category Foreign trade, Weekly
China continues to honor the commitments it made to enter the World Trade Organization (WTO) and could benefit more from further steps to open its economy, analysts said after the central government released a 27-page white paper, titled “China and the World Trade Organization”. It has four sections: “China has faithfully fulfilled its WTO accession commitments”; “China firmly supports the multilateral trading system”; “China’s significant contribution to the world after accession to the WTO”; and “China is actively advancing opening up to a higher level”. While the State Council makes no mention of U.S. President Donald Trump in the white paper, its main statements read like a defense against many of his complaints about China.
The government reiterated that it pursues a mutually beneficial trade strategy and that China will continue to open up in “a more comprehensive, profound and diversified way”. Wang Shouwen, Vice Minister of Commerce, said China has been a key engine for world economic recovery and growth since 2002, contributing on average nearly 30% annually to global economic growth. He said China’s reform and opening-up campaign over the past 40 years has far more than fulfilled its commitments for WTO access.
The White Paper shows what China has done to observe and uphold WTO rules, demonstrating support for a multilateral trading system that is open, transparent, inclusive and nondiscriminatory. The Paper shows China has been an active participant, strong supporter of and major contributor to the multilateral trading system. “China has not only honored its WTO entry commitments, but also pushed itself to go much further in the scope and depth of opening-up,” said Song Hong, International Trade Researcher at the Chinese Academy of Social Sciences (CASS).
From 2001 to 2017, China’s imports in goods jumped from USD243.6 billion to USD1.84 trillion, with an average annual growth of 13.5%, making the country the world’s second-largest importer. Vice Minister Wang Shouwen said China has taken further initiatives to cut its import tariffs on certain medicines and substantially reduced import duties on automobiles and parts as well as a number of daily consumer goods starting from July 1.
China and the European Union will set up a working group to revamp the World Trade Organization to counter U.S. unilateralism, but the two sides remain divided on issues such as Beijing’s industrial policies and market access. European Commission Vice President Jyrki Katainen made the remarks at a news briefing following high-level economic talks with Chinese Vice Premier Liu He in Beijing. Katainen said the exact set-up of the working group had not yet been decided, but “ideally” would be at the vice ministerial-level and other countries would be welcome to take part. Liu said the talks “were held against a unique background – amid a rise in unilateralism and trade protectionism, and amid tensions between major countries”. “China and the EU firmly oppose trade unilateralism and protectionism and think these actions may bring recession and turbulence to the global economy,” he said.
The Chinese yuan last week dropped through the 6.60 level against the U.S. dollar for the first time in six months, a further signal that the central bank wants a weaker yuan in the event of an all-out trade war. A weaker yuan against the U.S. currency would support Chinese exports by making them cheaper. The yuan peaked at 6.2352 in March, up 4% for the year against the U.S. dollar. Those gains have now been erased, and the currency is down 1.5% against the greenback so far this year.
China announced a long list of tariff cuts on imports from South Korea, India, Bangladesh, Laos and Sri Lanka taking effect on July 1. The cuts are part of China’s commitments under the Asia-Pacific Trade Agreement in which member countries agreed to slash import duties on more than 10,000 items by a third on average.
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