China Development Industrial Bank

China’s accession to the World Trade Organization is a significant moment in not only China’s economy but the economy of the world. After 15 years of negotiations China was finally accepted into the WTO but it was not without a price. Drastic changes takes drastic measures and the inclusion of China in the WTO changed everything. 1. Was the WTO a good deal for China? Entering the WTO would make Chinas local economy accessible to foreign markets and decrease tax tariffs on trade.

For China entering into the WTO was a good deal in the long run. However the inclusion in the WTO was not without its growing pains. With increased competition to foreign business many Cinese people lost their jobs and unemployment skyrocketed from 6. 1% in 1995 to 11. 1% in 2002. To compete and grow at such a rapid rate there needed to be more production and as an effect of this pollution became critical and suffered a century’s worth of environmental damage in only 30 years.

This was followed by their move of investing a huge sum of $170 billion of the overdue loans into four different companies while at the same time recapitalizing a total of $32 billion to the state banks. The foreign investment filtered more and more into the Chinese market and foreign loans become one of the main sources for the Chinese government in returning the loans When China entered into the WTO the government was criticized for undervaluing the Yuan at $8. 30. As a result the Chinese received unfair advantages to exports.

This led to a 15% drop in occupation rates in the US and Europe. With a steady growth of 9% analysts believed the Chinese economy could surpass the US and Europe in GDP and GNP making it the strongest economy in the world. China has come a long way 1. Was the WTO a good deal for China? 2. If you were advising the U. S. government, would you have recommended voting for or against China’s accession to the WTO? Including China in the WTO would have been a tough vote to make but I would have voted them in.

The benefits of pushing new technology, accessibility of resources, and strengthening the global economy make it the right decision. With all of the negative effects of Chinas integration to the WTO the positive outweighs the negative. 3. As of 2012, would you invest in China: why or why not? ...... One of the main criticisms that the Chinese government faced after their inclusion in the WTO was with regards to the undervaluing of Yuan which at the time was valued at $8. 3.

This resulted in the Chinese markets gaining immense foreign reserves and furthermore allowed the Chinese to make large amounts of imports which was negatively affecting the overall occupational rates and dropping them by 15% on average in both the USA and Europe. Even though the US critics were adamant on the Yuan and its undervaluing being the reason for the economic deficit that they were going through, many Chinese analysts argued that the Chinese imports were only replacing imports from other Asian markets which is why there was such an obvious increase in their overall percentage of imports.

Furthermore, they argued that as far as its negative influence on the occupational percentages went, the occupational decreases were happening a long time before the boom of Chinese boom and a majority of the sectors that were facing occupational decreases were ones where the input of the Chinese imports were in the minor percentages Another argument given by the Chinese analysts in response to the charge of the undervaluing ...... This was followed by their move of investing a huge sum of $170 billion of the overdue loans into four different companies while at the same time recapitalizing a total of $32 billion to the state banks.

The foreign investment filtered more and more into the Chinese market and foreign loans become one of the main sources for the Chinese government in returning the loans. The analysis of the current patterns of Chinese government debts shows signs that foreign banks will be given more freedom and the loans would need another 4-5 years before positive balance is attained Another hefty impact after the inclusion of China into the WTO was the privatization of many of their State-Owned Enterprises (SOEs) which were failing miserably against the competition posed by the foreign investors.

This was another blow for the local markets as the SOEs formed the crux of all Chinese businesses. The privatization of this sector was initiated in 1995 when the government kept the big profit-making SOEs and discarded the smaller SOEs, yet the government was forced to hand over the market share that these big SOEs had after joining WTO and eventually hand the complete control of the SOEs

China initiated, perhaps, what can be called the biggest commitment that any country had made in welcoming the 21st century, by joining the World Trade Organization (*****) in 2001 ***** promising foreign markets a whole new package of augmented accessibility to China's local ***** as well ***** decreased taxes and tariffs on trade. China's inclusion in the WTO was not sudden but actually followed a long series of negoti*****tions, which lasted 15 years, from the Chinese governments ***** all WTO member states as a group and individu*****y.

The inclusion in the WTO ***** eventually indirectly influenced ***** China's steady growth rates ***** it had not only had been able to maintain but incre*****e over a period of three decades, keeping a steady rate ***** 9% per annum growth ***** in ***** last decade alone. Some analysts even went on to claim that within 2-3 ********** China's ec*****omy could move from the third strongest economy to surpassing the two economies, USA and Europe, above it in the Gross Domestic Production ***** Gross National ***** (GDP and GNP).

Despite the obvious growth *****, as aforementioned, the Ch*****ese government ***** ***** face numerous problems and overcome unforeseen hurdles after their ***** in the WTO. One of the factors that posed a hurdle for the Chinese ***** and markets was the increased competition that the Chinese banks *****d due to the inclusion ***** foreign ***** and banking systems. ***** ***** factor that dominated the Chinese banking sector was ***** control by the government and the absence of any form ***** concept of profit-making.

A high majority of the ********** pr*****its hence were accumulated in a total four banks. However, the turning point in lett*****g foreign banks have the freedom to dictate their terms in the banking ***** came when Beijing in an attempt to organize the bank*****g sector as a competitor for foreign banking systems built ***** commercial banks and permitted them to lend money based on what at the time seemed like a good lending policy.

*****, the inexperience of lending financial loans ***** the situati***** worse and in order ***** retain ***** clientele base the Chinese ***** had to allow ***** banks the ***** that *****y needed ***** work ***** the Chinese societies as well as learn ***** art of loaning and profit-making in order to ***** any contribution in the local banking sector. ***** was followed by ********** move of investing a huge sum of $170 billion of the overdue lo*****ns into four different companies while at the same ***** recapitalizing a tot*****l of $32 billion to the state banks.

The foreign investment filtered more and more ***** the Chinese market and foreign loans become one of the main sources for ***** ***** government in returning the loans. The analysis of the current patterns of Chinese government debts shows signs ***** foreign ***** will be given more freedom and ***** ***** would need another 4-5 years before positive balance is attained. ***** hefty impact 1. Was the WTO a good deal for China? 2. If you were advising the U. S. government, would you have recommended voting for or against China’s accession to the WTO? 3. As of 2012, would you invest in China: why or why not?