China seeks to gain market economy status under the WTO by this December, however, many European powers disagree that China has transitioned enough to be considered an authentic market economy. What do you guys think? Is China's economy liberal enough to qualify based on the WTO's standards? How would this impact the global economy?
Here's the article: http://www.ft.com/cms/s/0/572f435e-0784-11e6-9b51-0fb5e65703ce.html#axzz48AUTZHxN
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ReplyDeleteOh shoot! That's very strange. If you search "china market status" it should be the first link to show up under news. My apologies, I wasn't prompted with a subscription demand when I viewed it.
DeleteI think there are still some socialist/communist political effects, but for purely economic sense, China has become a capitalist market economy. If China can secure the market economy status from the WTO, it could sell its products at lower prices since its importing countries' ability to impose tariff on Chinese goods is significantly limited. China is one of the fastest growing economy in the world. This status will precipitate the economic growth in China.
ReplyDeleteI agree with Jennifer. I think from an economic sense they are where they need to be. But I think the concern for the WTO and other countries is the political problems, namely the communism and individual freedom concerns. Until those have improved I'm not sure if they will be granted the market economy status.
DeleteIt is clear why EU has been and still is so reluctant to grant Market Economy Status to China. First, China is charged the most anti-dumping investigations by European Commission (28 out of 38). Second, it will significantly hurt the job market in Europe. According to one report, current anti-dumping policies are protecting 3,500,000 direct and indirect jobs in Europe. [https://static1.squarespace.com/static/5537b2fbe4b0e49a1e30c01c/t/55fc2e34e4b069a51996eb49/1443621122929/2015+09+17+AEGIS+MES+Myths_final.pdf] Lastly, this will impair suppliers, especially steel industry, where China is already producing 50.3% of global steel market, followed by European Union.
ReplyDeleteOn the other hand, there would be great advantages to consumers in Europe, once China's non-market economy status is lifted.
It is also interesting to see how EU's decision would affect the US decision afterwards.
It is crazy to me the growth of the Chinese economy in recent years. We have been shown many pictures of Shanghi from the 1990's to today and the difference is staggering. Like Jennifer said, if China can secure the status from the WTO it could sell products at lower prices. Which is great for their economy because they could potentially sell more goods.
ReplyDeletehttp://www.ign.com/boards/threads/shanghai-1990-vs-2010.454481062/
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