An analysis of China's entry into the WTO on the Chinese economy

This paper focuses on the effects of the WTO entry on China's economy. Based on the theory of comparative advantage and the current situation of major Chinese industries, this paper analyzes and predicts which Chinese industries will have more opportunities and which ones will face more challenges under the WTO system. Other issues addressed in this project are the reform and adjustment of China's foreign trade regime, ownership system, industrial structure, labor structure and social safety net. By using secondary data and combining quantitative and qualitative analyses, the paper argues that each industry faces opportunities and challenges. However, in general, Chinese labor-intensive industries such as the textile and garments, and consumer goods industries will benefit more from WTO entry, whereas land-, capital- and technology-intensive industries such as the staple foodstuff, the auto, the iron and steel, the chemical and pharmaceutical, and the high-tech industries will face severe foreign competition. In a nutshell, a short-term price has to be paid for the long-term benefit of WTO accession on the Chinese economy.--Page ii.