Transcript CHINA, WTO, DOMESTIC REFORMS

China in the WTO
China Institute for Reform and
Development/GTZ
Haikou, China
November 17-18
Razeen Sally, ECIPE/LSE
CHINA, WTO, DOMESTIC REFORMS
• Up to WTO accession
• China in WTO after accession
• National reforms post WTO accession
• What China needs to do
CHINA, WTO, DOMESTIC REFORMS
• Up to WTO accession
-- Radical unilateral opening of economy in 1990s
-- Tough WTO negotiations; very strong accession
commitments
-- Mutually reinforcing domestic and WTO reform
processes
Changes in average statutory tariff rates in China (%)
All products
Primary products
Manufactures
Simple
Weighted
Simple
Weighted
Simple
Weighted
1992
42.9
40.6
36.2
22.3
44.9
46.5
1993
39.9
38.4
33.3
20.9
41.8
44.0
1994
36.3
35.5
32.1
19.6
37.6
40.6
1996
23.6
22.6
25.4
20.0
23.1
23.2
1997
17.6
18.2
17.9
20.0
17.5
17.8
1998
17.5
18.7
17.9
20.0
17.4
18.5
1999
17.2
14.2
21.8
21.8
16.8
13.4
2000
17.0
14.1
22.4
19.5
16.6
13.3
2001
16.6
12.0
21.6
17.7
16.2
13.0
PostAccession
9.8
6.8
13.2
3.6
9.5
6.9
*Source: World Bank (1999, p340) to 1998. Ianchovichina and Martin’s calculations for tariff lines with imports
from 1999 and China’s final WTO offer. CDS Consulting Co. provided applied tariffs for 2001. Trade data comes
from COMTRADE.
Source: Elena Ianchovichina and William Martin, “Economic impacts of China’s accession to the World Trade
Organisation,” World Bank Policy Research Working Paper 3053, May 2003.
Changes in the import coverage of nontariff barriers
from 1996 to 2001
Licences &
Quotas
Licensing
Tendering
State
only
Designated
Trading
Trading
Any NTB
No NTBs
Total
2001
12.8 %
2.7 %
0.5 %
9.5 %
6.2 %
21.6 %
78.4 %
100 %
1996
18.5 %
7.4 %
2.2 %
11.5 %
7.3 %
32.5 %
67.5 %
100 %
Note: Calculations for 2001 performed by Mei Zhen of MOFTEC during an internship at the World Bank
Source: Elena Ianchovichina and William Martin, “Economic impacts of China’s accession to the World Trade
Organisation,” World Bank Policy Research Working Paper 3053, May 2003.
Formal unilateralism; reductions in applied MFN tariffs on
Source: Richard Baldwin 2006: Kimura, Takahashi, and Hayakawa (2005)
Applied Tariff rates in Asia
1995
2005
Japan
3.1
2.7
Korea
8.3
8.6
Taiwan
11.2
5.3
Hong Kong
0
0
Singapore
0.4
0
Malaysia
8.4*
7.5
Indonesia
14
6.5
Philippines
19.8
5.4
Thailand
21
9.9
Vietnam
13*
13.1
China
22.4
9
India
41
16
*Malaysia 1996 *Vietnam 1997. All tariff rates are based on unweighted averages for all goods in ad valorem rates,
or applied rates, or MFN rates whichever data is available in a longer period. Source: World Bank
Bound and applied MFN tariffs in Asia
Binding
Coverage
Bound Tariff
Rate
(All goods)
Applied Tariff
Rate
(Manufactures)
Applied Tariff
Rate
(Agriculture)
Overall applied
Tariff
Japan
99.6
5.0
3.3
10.4
4.7
Korea
94.4
16.1
6.6
42.5
11.9
China
100
10.0
9.5
15.0
10.3
Hong Kong
45.7
0.0
0.0
0.0
0.0
Malaysia
83.7
14.5
8.1
2.1
7.3
Thailand
74.7
25.7
14.6
16.2
14.7
Indonesia
96.6
37.1
6.1
8.0
6.4
Philippines
66.8
25.6
6.9
11.8
7.5
Vietnam
-
-
12.9
18.1
13.7
Taiwan
100.0
6.1
5.5
16.3
6.9
Singapore
69.2
6.9
0.0
0.0
0.0
India
73.8
49.8
25.3
30.0
28.3
Pakistan
44.3
52.4
16.1
13.9
15.9
Bangladesh
15.8
163.8
19.2
21.7
19.5
Sri Lanka
37.8
29.8
9.6
15.4
10.2
The figures are simple unweighted averages of the tariff rates in percent from the year of 2003 and 2004.
Source: World Bank
Table x: Coverage Ratio of Non-tariff Barriers in Import Trade*
(Unweighted, percent)
1984-87
1988-90
1991-93
1997-2000
China
10.6
23.2
11.3
5.7
Indonesia
94.7
9.4
2.7
3.1
Korea, Rep
8.8
4.0
2.6
1.5
Malaysia
3.7
2.8
2.1
2.3
Philippines
44.9
---
---
1.8
Thailand
12.4
8.5
5.5
2.1
Notes:
…
Not available
*
Calculated as percentage of import value of HS6 tariff lines affected by NTBs in total imports. NTBs
include quantitative restrictions in the form of all types of licenses and import authorization, quotas, import
prohibitions, advanced import deposits, foreign exchange restrictions, fixed customs valuations, and state trading
monopolies. Figures reported under a given sub-period relates a single year within that sub-period.
Source: Hoekman et al (2002, Table A-4 and WTO, Trade Policy Review – Country Report
(various)
Figure 9: Total Trade (Goods & Services)
Billions
Total Trade (Merchandise and Service)
Total Trade India and China (1980-2006)
1400
1200
1000
800
600
400
200
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003
India Total Trade
Source: WTO, International Trade Statistics
Years
China Total Trade
Figure 10: Trade/ GDP
Trade as % of GDP (India and China) 1980-2005
80
70
Trade/ GDP
60
50
40
30
20
10
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
China
Source: World Bank, World Development Indicators (WDI)
India
Pie 1 (i): Share of Global Trade (Goods)
Indian Share and Rank of Global Merchandise Trade (2005)
EU
1st
18%
Rest of the World
37%
US
2nd
17%
India
16th
1%
Korea
7th
3%
Source: WTO, International Trade Statistics
Hong-Kong Canada
6th
5th
4%
4%
Japan
4th
7%
China
3rd
9%
Pie 1 (ii): Share of Global Trade (Service)
Indian Share and Rank of Global Services Trade (2005)
EU
1st
26%
Rest of the World
36%
Korea
7th
3%
India
6th
3%
Source: WTO, International Trade Statistics
US
2nd
18%
Canada China
5th
4th
3%
4%
Japan
3rd
7%
Figure 15: Inward FDI Flows
Inward FDI Flows India and China (1980-2005)
Inward FDI Flows (mln USD)
80000
70000
60000
50000
40000
30000
20000
10000
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
Inw ard FDI Flow s India
Source: UNCTAD, FDI Key Data
Inw ard FDI Flow s China
Figure 2: IFDI Stock Accumulated 1980-2005 (percentage of Global IFDI Stock)
IFDI Stock Accumulated 1980-2005 (percentage of Global IFDI Stock)
European Union
40%
Rest of the World
31%
ASEAN*
4%
United States
13%
Japan
1%
India
1%
Korea, Republic of
1%
China
9%
CHINA, WTO, DOMESTIC REFORMS
• China in the WTO post-accession
-- General: locking in domestic reforms; becoming a
stakeholder in multilateralism; setting an example (e.g.
Vietnam); integrating into the global economy
-- DDA: pragmatic, but largely passive – punching below
weight
-- DSM: listening and learning; mutual restraint; but now
more action
-- Implementation: a mixed record
CHINA, WTO, DOMESTIC REFORMS
• National trade-related reforms post-WTO
accession
-- Credits: WTO lock in; managing tensions with trade
partners; some WTO-plus reforms
-- Debits: Reform slowdown; inevitable complications
-- Other developments: FTAs; energy/investment
nationalism; industrial policy
Table 14: Recently Established or Proposed RTAs/CEPAs
in ASEAN, China and India, 2000-2007 (cont’d)
Country / Group
of countries
Partners
Nature of
Agreement
Status of Agreement
2007
China
Pakistan
ASEAN
FTA
EPA
FTA
FTA
PTA
BIPA
FTA
FTA
FTA
FTA
FTA
FTA
FTA
FTA
FTA
FTA
FTA
FTA
FTA
-Agreement signed
-EHP in force
-Under negotiation
-Under negotiation
-Agreement in force
-Proposed
-Proposed
-Under negotiation
-Under negotiation
-Agreement in force
-Agreement in force
-Agreement in force
-Proposed
-Under negotiation
-Proposed
-Under study
-Proposed
-Proposed
-Proposed
Singapore
Thailand
India
Australia
New Zealand
Macao
Hong Hong
Chile
SACU
GCC
Iceland
Korea
Japan
Peru
Norway
The map shows FTAs signed or under negotiation in January 2006.
East Asia is defined here as the 10 ASEANs, China, Japan and Korea. Source Richard Baldwin 2006
CHINA, WTO, DOMESTIC REFORMS
• What China needs to do
-- National reforms: WTO implementation; WTO-plus reforms (services
and investment); moving to 2nd generation regulatory reforms; wider
reforms and context
-- Faster unilateral reforms – in China’s own interest
-- China as engine of Asian and global unilateral liberalisation
-- WTO: strengthening rules post-Doha; China must move to coleadership
-- FTAs: more caution; cleaning up the mess
-- Key bilateral relationships: What others need to do, esp. USA and EU
Table 1: Ease of Doing Business
Table 1: World ranking in ease of doing business 2006*
Country/
Economy
Ease of
Doing
Busine
ss
Starting
a
Business
Dealing
with
Licenses
Employin
g
Workers
Registeri
ng
Property
Gettin
g
Credit
Protectin
g
Investors
Payin
g
Taxes
Trading
Across
Borders
Enforcing
Contracts
Closing
a
Business
Singapore
1
11
8
3
12
7
2
8
4
23
2
Hong Kong
5
5
64
16
60
2
3
5
1
10
14
Japan
11
18
2
36
39
13
12
98
19
5
1
Thailand
18
28
3
46
18
33
33
57
103
44
38
Korea
23
116
28
110
67
21
60
48
28
17
11
Malaysia
25
71
137
38
66
3
4
49
46
81
51
Taiwan
47
94
148
154
24
48
60
78
42
62
4
Pakistan
74
54
89
126
68
65
19
140
98
163
46
Bangladesh
88
68
67
75
167
48
15
72
134
174
93
Sri Lanka
89
44
71
98
125
101
60
157
99
90
59
China
93
128
153
78
21
101
83
168
38
63
75
Vietnam
104
97
25
104
34
83
170
120
75
94
116
Philippines
126
108
113
118
98
101
151
106
63
59
147
India
134
88
155
112
110
65
33
158
139
173
133
Indonesia
135
161
131
140
120
83
60
133
60
145
136
*The numbers correspond to each country’s aggregate ranking on the ease of doing business and on each of the ten topics that comprise the overall ranking.
Source: The World Bank Doing Business Database
Table 2: Trading Across the Border
Indicators for Trading Across Borders (2006)*
Country/
Economy
Ease of Trading
Across Borders
(World Rankings)
Documents for
export (number)
Time for
export
(days)
Cost to export
(US$ per
container)
Documents for
import (number)
Time for
import
(days)
Cost to import
(US$ per
container)
Hong Kong
1
2
5
425
2
5
425
Singapore
4
5
6
382
6
3
333
Japan
19
5
11
789
7
11
847
Korea
28
5
12
780
8
12
1.04
China
38
6
18
335
12
22
375
Taiwan
42
8
14
747
8
14
747
Malaysia
46
6
20
481
12
22
428
Indonesia
60
7
25
546
10
30
675
Philippines
63
6
18
1.336
7
20
1.336
Vietnam
75
6
35
701
9
36
887
Pakistan
98
8
24
996
12
19
1.005
Sri Lanka
99
8
25
797
13
27
789
Thailand
103
9
24
848
12
22
1.042
Bangladesh
134
7
35
902
16
57
1.287
India
139
10
27
864
15
41
1.244
Source: The World Bank Doing Business Database
Table 3: Governance Indicators
Percentile world rank of governance indictors for Asian countries 2005*
Voice and
Accountability
Political Stability/ No
Violence
Government
Effectiveness
Regulatory
Quality
Rule of
Law
Control of
Corruption
Singapore
38.2
84.0
99.5
99.5
95.7
99.0
Hong Kong
52.2
89.6
92.8
100.0
91.3
92.1
Japan
74.9
80.2
84.7
85.6
89.4
85.2
Malaysia
34.3
62.3
80.4
66.8
66.2
64.5
Taiwan
69.1
64.2
83.7
79.7
78.7
70.9
Korea
68.1
60.8
78.9
71.8
72.5
69
India
55.6
22.2
51.7
41.1
56
46.8
Thailand
49.3
29.2
66
63.9
56.5
51.2
China
6.3
75.9
52.2
44.6
40.6
30.5
Vietnam
7.7
59
45
25.7
42
26.6
Indonesia
40.6
9
37.3
36.6
20.3
21.2
Sri Lanka
39.6
10.8
40.7
50
54.1
47.3
Philippines
47.8
17.5
55.5
52
38.6
37.4
Bangladesh
31.4
6.6
21.1
14.9
19.8
7.9
Pakistan
12.6
5.7
34
27.7
24.2
15.8
Source: The World Bank Doing Business Database