China and Global Trade

China joined the World Trade Organisation in late 2001, six years after the body was established. China's entry was seen to represent part of a gradual relaxation in Chinese regulations and the opening up of what was for most of the 20th century an inaccessible region. By joining the WTO, China was bound to a number of deals and agreements set to encourage foreign business activity within the world's largest country.

Still a relatively new member of the WTO, the integration of China with existing world markets remains a transformation in process. A number of structures and regulations dating from days of central Communist planning have been taken apart and paths cleared for foreign organisations to set up joint ventures and to access Chinese markets. Popular opinion in China welcomed new access to entertainment, education, cars and other consumer goods from the rest of the world. Similarly, Chinese exports to other countries are increasing rapidly. It hasn't taken Chinese businesses long to find ready markets for textiles, electronic and other low-priced commodities, and China is overtaking Japan as the largest exporter to the US.

Increasingly China is becoming recognised as an exciting and potential arena for business activity. Western businesses are encouraged by the prospect of a 1.3bn strong market: almost twice the United States and European Union combined. Since accession to the WTO, import tariffs have been cut by an average of 25% and a number of high-profile organisations have begun ventures into China. Foreign direct investment in China is increasing year by year and as part of the package put forward by China when it joined the WTO, it will open its financial services to foreign competition by 2007. At the beginning of 2004, HSBC and Citibank became the first foreign banks to receive permission to issue credit cards within China.

China looks set to continue as one of the most exciting and challenging prospects for Western business, and to be one of the most dramatically transforming regions at the outset of the 21st century.

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