- China and the Challenge of Economic Globalization: The Impact of WTO Membership
In December 200., China entered the World Trade Organization (WTO) with much fanfare. At the time of China's accession, or even before it, scholars and pundits were hotly debating whether China would observe the WTO's rules and whether the accession would accelerate China's development of a free market.
Due to the lack of reliable data, we still don't have a clear overall picture on how WTO entry impacted China. Against this backdrop, the above-referenced book edited by Fung et al. is a much welcomed addition that may help us assess China's progress and the impact of economic globalization on China. Even though I undertook the task of reviewing this book with great interest, the job was not easy.
One of the biggest challenges faced by book editors of collective works is how to ensure that the works included cover varied special areas that converge and integrate. Yet a bigger challenge facing reviewers of collective works is how to summarize these works, when some of the works are outside the (poor) reviewer's specialty.
I faced such a daunting challenge. I do not mean that the editors did a poor job integrating all the works in this volume. In this regard, the editors did a great job choosing works intrinsically linked to the theme of the book: how China's entry in the WTO impacted China's economy.
As the editors put it in their Introduction, "A study of the Chinese economy after entering the WTO should be of importance to practitioners, scholars, and policymakers because of China's vast size, its rapid growth in foreign trade and FDI [Foreign direct investment] inflows, and the unprecedented speed of its integration into the world economy."
The book has 18 articles and is arranged in four parts. The first part covers economic performance after China's accession to the World Trade Organization and includes four articles. Changhong Pei and Jinjian Shen's article "An Analysis of China's Foreign Trade after WTO Accession" demonstrates that the first year after China's entrance was a "year of harvest" in foreign trade for China. In the second article, "Foreign Direct Investment: Opportunity or Challenge for China after WTO Membership?" Kevin H. Zhang discusses how China deals with the positive and negative effects of FDI. He argues that the result depends primarily on "how China balances technology transfer and domestic market protection." As the title of the third article, "China's WTO Compliance: Commitment and Progress [End Page 415] in the Initial Stage," suggests, author Penelope B. Prime reviews China's WTO compliance in its first two years. The fourth article, titled "After Accession to the WTO: FDI Flows in Western China," is by Ying-Qiu Liu. Liu discusses the impact of China's policy change and the accession to WTO on the development of China's less-developed western region.
The second part, which has six articles, discusses the WTO and China's economic welfare. The first article, "Foreign Direct Investment and Income Inequality," by Xiaodong Wu, evaluates whether China's joining the WTO will exacerbate income inequality in China, which was a major concern before China's accession. Wu shows that with appropriate policy and care, FDI does not necessarily lead to income inequality. The next article is by Yan-Zhong Wang and titled "A New World Factory and China's Labor Force." Wang argues that China's accession to the WTO will accelerate China's participation in international labor division. Nini Yang contributed the third article in this part, "China's WTO Membership: Commitments and Challenges," which discusses the ongoing debates over China's accession to the WTO from three perspectives: China's, the United States', and a global perspective. The fourth article is by Bing-Wen Zheng, titled "Corporatism: Rebuilding the Framework of China's Welfare Regime," and talks about a...