“Unfortunately, in economics, China no longer has a model to follow”

For Tu Xinquan, dean and professor at the Chinese Institute for WTO Studies at Beijing University of International Trade and Economics, the 2008 financial crisis has reshuffled the cards, raising awareness to China that it should not blindly follow the United States.

For Westerners, China has benefited enormously from its membership in the World Trade Organization. Is this also the point of view of the Chinese?

For us academics, accession to the WTO marked a decisive turning point in China’s opening up and development. However, as the United States reproaches us for having derived undue advantages from it, we insist less than before on the advantages which it brought us. Our leaders prefer to focus on the efforts we have made.

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At least the WTO allows for fair competition. Today, it is clear that China is the country that has benefited the most. However, in 2001, it was the only state which had to make concessions to join it, and this benefited other countries.

Didn’t you expect such a result?

No, definitely not. Many Chinese feared an explosion in unemployment. We were very worried. In fact, China’s performance has been much better than the most optimistic forecasts anticipated. It is the charm of the market economy and its famous invisible hand.

Has China won against the rest of the world?

The situation is more complex. All competition creates winners and losers. Among the losers is Mexico, whose products have been challenged by “made in China” products on the North American market. The United States has not lost much, because there is a vertical integration between what they produce and what China offers. The two countries are more complementary than competitive. The competition between their economies is much greater. It does not apply to certain specific products.

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China mainly competes with developing countries because, like them, it aims to export to developed states and has been able to attract foreign investment that others could have enjoyed if necessary. If its success poses a real challenge to the rest of the world, it is mainly because of the size of the country. The population is almost twice that of the G7. Its development is shaking up the rest of the world, it is a fact.

However, it also provides many investment opportunities. It is the second largest importer in the world. Its gradual integration into the world economy from 1992 largely contributed to its growth and the low inflation that accompanied it for nearly two decades. US consumers have thus benefited from cheap imports from China. But the redistribution of productivity gains has been uneven and there have been losers.

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