china as a member of the world trade organization

As one of the newest members of the World Trade Organization (WTO),1 China is unique in a number of respects. First, it is by far the largest economic power among developing country members. By traditional measures, China fits well within the definition of a developing country—in most regions of the country, per capita GDP remains below $1000.2 Indeed, during its negotiations for accession to the WTO, China argued that it should be entitled to the special and differential treatment extended to developing countries in the WTO agreements.3 At the same time, China stands apart from other developing countries as a producer of, and a magnet for, foreign investment. According to recent WTO data, China was the seventh largest merchandise exporter in the world, with aggregate exports of $249 billion in 2000.4 In addition, China received an estimated $46.8 billion in foreign direct investment (FDI) in 2001, making it one of the world’s largest recipients of foreign investment—second only to the United States if FDI flows to Hong Kong are included.5 Thus, China is both a developing country and an economic powerhouse.
China is also unique in a second respect; it is the only major WTO member that is still Communist.6 In 1982, six years after the end of the Cultural Revolution, the Chinese Communist Party (CCP) adopted a new Constitution reflecting Deng Xiaoping’s ideas for modernization and market reform.7 Since that time, China’s reform effort has continued at an extraordinary pace, as the Party has increasingly staked its legitimacy on China’s ability to sustain high levels of economic growth. As a result of Deng Xiaoping’s reforms, China has largely transformed its economy. However, it remains under the control of a Communist apparatus that struggles to maintain dominance even as it embraces modernization. Jiang Zemin’s “three represents” campaign, which emphasizes the CCP’s role in representing the interests of capitalists along with the interests of workers and peasants, is part of an ongoing effort by the Party to reform and revive itself.8 The CCP has opened its membership to entrepreneurs and may soon appoint several prominent businessmen to high positions within the Party.9 Currently, China is undergoing its first peaceful change of leadership in decades, as Jiang Zemin and other top CCP officials step down and cede control to a new generation of leaders.10 China is therefore at a turning point, both in terms of the transfer of power within the CCP and its new status as a WTO member.