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Siobhan Wood and
Jane Gordon
China & WTO – A brief History
¥ China was one of the 23 original
signatories of the General Agreement on
Tariffs and Trade (GATT) now known as
WTO in 1948.
¥ After China’s revolution in 1949 they left
the GATT system.
¥ In 1986 China applied for reinstatement
and finally joined the WTO on the 11th
December 2001.
Industry Timelines
China’s entry into the WTO opened the doors for foreign firms
to enter the market, by:
 2005 – Telecom  2006 – Banking
Firms allowed 25% share in Foreign banks allowed to
mobile telecom companies conduct business with
immediately, 49% after 3 Chinese Firms 2 years
years after entry, individuals by
 2006 – Automobiles
Tariffs reduced to 25% 2004 – Agriculture
(Were as High as 80 – Tariffs on US products will
100%) fall from 31% to 14%
Industry Timelines cont.
 2005 – Textiles
Quotas on imports ends
2005 – Energy/Oil
Allow 16.58 million tons of oil initially,
increasing by 15% per year until 2005
 2004 – Distribution/Retail

Restrictions phased out for most products.

Foreign firms allowed controlling interest of up to 65%
In retail stores

¥ From 2001 to 2005 china

imported goods worth nearly
2.2 trillion USD with an annual
growth rate of 28%.
Facts and Figures
¥ In 1978 China’s total foreign trade
amounted to 20.6 billion USD and
they ranked 32nd in the worlds
trading nations.
¥ Today China is the worlds 3rd largest
trading economy behind the EU and
the United States.
Facts and Figures
¥ Furthermore China’s ratio of
imports to GDP has moved from
5% in 1978 to 30% in 2005 which
is more than twice that in the US
and more than 3 times the ratio in
Advantages – One Year On
¥ 5000 tariffs had been slashed
¥ 2300 improvements to bureaucratic
rules and regulations
¥ Import duties had been cut by an
average of 25%
Disadvantages – One Year On
¥ Millions of people working in heavy
industry had lost their jobs
¥ Imports of cheap foreign food had
prompted farmers to migrate from the
countryside into China’s already crowded
Example: Dell
¥ Before China entered the WTO, Dell
withdrew plans to open a manufacturing
facilities in China when government
leaders demanded that they maintain
control of Dell’s operations, as a result
Dell opted against opening the facility
¥ Once Dell Recognized that China was
joining the WTO it set up its operations in
the late 1990`s.