China after the WTO

China’s WTO accession was a landmark event bringing one of the world’s major trading economies fully into the international rules-based system. The major features and implications of China’s accession agreement are reviewed and, given China’s success in trade and investment outside the framework of the WTO, China’s motives for accession are explored. The economic impacts of WTO are reviewed, including the impacts on China’s global competitors in areas such as textiles. Areas where adjustment pressures are thought to be the greatest (agriculture, banking and the labor market) are discussed in some detail. The paper argues that the Gordian Knot of reform in China is the non-performing debt in the banking system, resolution of which is inextricably bound up with the fiscal reforms that China needs to make. With political transition imminent, the anticipated “fourth generation” leadership team of Hu and Wen faces the challenges of leading China in a period that is not only post-WTO, but also post-September 11th, post-Asian Crisis, and post-information age revolution. WTO accession is thus but one of many sources of change for today’s China