Blog Post

China’s Ambassador to the EU on the role of emerging markets in WTO

Remarks delivered by Her Excellency the Ambassador of the People's Republic of China to the European Union, Yang Yanyi, at workshop 'The future of trade multilateralism - Governance of 21st century trade and the role of the WTO'.

By: Date: July 15, 2014 Topic: Global Economics & Governance

Remarks delivered by Her Excellency the Ambassador of the People’s Republic of China to the European Union, Yang Yanyi, at our workshop ‘The future of trade multilateralism – Governance of 21st century trade and the role of the WTO‘ on the 14th of July 2014.

Distinguished guests,

Ladies and gentlemen,

Good afternoon. It’s my pleasure to be at Bruegel, a prestigious European think tank that is renowned for carving a unique discussion space for improving the quality of economic policy.

I wish to commend Bruegel for putting under the spotlight the future of trade and multilateralism–governance of 21st century trade and the WTO. Indeed, against the backdrop of rising multi-polarity and mega-regional trade agreements, how shall global trade be better managed and what will be the future of trade multilateralism are serious questions that need to be answered.

That said, the topics under today’s discussion are heavy and have no simple solutions. The academic world so well represented in this audience may offer a fundamental contribution. As a laywoman, I will only venture on some short and humble points.

On opportunities and challenges

As mentioned by many speakers and observers, the Bali Ministerial of last December was a resounding success. Constructive engagement by all the Members enabled a very successful and inclusive outcome, particularly in three key areas-agriculture, trade facilitation and development.

Once implemented, the Bali Package will provide a shot in the arm to the global economy, delivering growth and jobs.

Among others, by streamlining customs procedures, the Trade Facilitation Agreement could lead to an expansion in developing country exports of up to 9.9% and the creation of up to 18 million jobs in developing economies. It could also reduce advanced economies’ cost for doing business internationally by 10%.

The Bali Ministerial breathed new life into multilateralism and restored the credibility of the WTO. It demonstrated for the first time since its creation in 1995 that the WTO is capable of making multilateral decisions and delivering results.

The Bali Ministerial has also set in motion a process whereby members will decide by the end of this year on a clear road map for concluding the Doha Development Agenda.

It is encouraging to learn that in Geneva, there is a tangible feeling of momentum. Positive message has been delivered to the Director-General Roberto Azevedo during his travels to numerous countries in recent months. Members have expressed their willingness to build on the momentum created in Bali and ensure that the WTO will deliver even more in the future.

Having said the above, there is no denying that there are challenges.

The world is far from tranquil and development continues to be uneven, with the North staying strong and rich while the South remaining weak and under-developed.

International trade is still feeling the aftershocks of the global financial crisis. The path of global economic recovery is tortuous and growth remains lackluster.

Global challenges such as food security, energy security and sustainable development remain pronounced.

Developing countries are still faced with a harsh international trade and development environment. While some have been successful in participating in global value chains, a significant number of low-income countries, particularly the least-developed, are still absent.

The continuing stalemate of the complex negotiations of the Doha Round has led to frustration and cynicism of the multilateral trading system. There has been declining interest in multilateral trade system and shifting of priorities to regional and plurilateral trade agreements, including TTP and TTIP.

And in this connection, there is a growing concern that the increase in regional and plurilateral trade deals could come to be seen as a substitute for, rather than a complement to, multilateral liberalization and non-discriminatory set of rules to govern international trade.  

Protectionism has been on the rise and the use of anti-dumping and countervailing duties is soaring, threatening the gains from liberalization.

The wider and more diverse membership of the WTO has made coordination and decision-making more complicated. 

On the overall approach towards governance of trade

First, it is more important than ever that we commit ourselves to supporting development through trade. As one of the key enablers of inclusive and sustainable development, trade has played a central role in helping business in the poorest economies connect to open global markets and lifting millions of people out of poverty. To ensure shared growth and prosperity, trade should continue to play a greater role in the future.

Second, multilateral trading system under the WTO should remain at the heart of global trade discourse and norm-setting exercise. The continuing integration of our economies and the deepening and broadening of the global value chains have shown and will continue to show that only the multilateral trading system is in a position to ensure a more level playing field and fair and equitable order in global trade.

Third, WTO Members should prepare with a sense of urgency a clearly defined work program by the end of this year to secure an appropriate and balanced conclusion to the DDA, and, in particular, address outstanding market access barriers and trade-distorting practices in agriculture, industrial goods and services.

Fourth, at these demanding times, all the WTO Members must be disciplined in abiding by the principle of locking-in what have already agreed on and not re-open the existing package and jeopardize the delicately balanced compromises achieved. And all members, mainly the developed members should display required political predisposition, good faith, pragmatism and necessary flexibility to facilitate progress.

Fifth, to make the global trading system fully responsive to the needs and aspirations of majority of the people around the world, in particular the LDCs, the principle of special and differential treatment in favor of developing countries should be reaffirmed and upheld. The formula for full integration into global trade flows has to be country-specific. One-size-fits-all approach is ill-suited and not advisable. We need an approach that respects the political and economic limitations of each member; finds meaningful outcomes of interest to all; and keeps us moving in the right direction.

Sixth, functioning of the multilateral trading system should remain current and relevant. Negotiations should be open, inclusive and transparent. Due considerations should be given to differences between parties. No party or parties should try to impose their own will. Multilateral agenda should be discussed within the multilateral framework and consensus should be reached with all members joining the discussion.

Seventh, coexisting with each other, different tracks–bilateral, regional, plurilateral and multilaterals should not be mutually exclusive; rather they should complement and reinforce each other. While regional initiatives are necessary building blocks to build the edifice of global trade rules and trade liberalization, they are not sufficient on their own. Many of the big issues can only be tackled at the global level, and therefore many of the big gains can only be delivered at this level. Any attempt to set some bilateral or regional trade standards as reference for future multilateral negotiations should be guarded against.

Last but not least, protectionism should be guarded against by all means. We must detect trade-restrictive measures in their early stages; wherever they show up, we must discourage their adoption and encourage their dismantling.

On the role of emerging markets

I would like to take the sub-agenda item before us as recognition of and complement to the increasingly important role played by the developing world in promotion of growth and development.

Management of 21st century global trade is a joint endeavor and shared responsibility. The building of a fair and equitable international order hinges on commitment by developing and developed countries alike.

Talking about the role of emerging markets, I would like to briefly touch upon what China is doing and continue to do.

The past three decades and more tell us that only an open and inclusive country can be strong and prosperous.

For this reason, the new leadership of China is fully committed to comprehensively deepening reform and pressing ahead proactively with the opening-up.

The key of the reform is to streamline administration and delegate government power to further energize the market and generate greater creativity from the society. Among others, reform of business registration system has been followed by a surge of over 40% in the number of newly registered businesses; and advancement of structural reform and easing of market access has given more play to the role of private capital.

In the meantime, the new round of opening-up has led to easing market access for foreign investment and further opening of the sevices sector and hinterland and border areas.

With a view to providing a level playing field for Chinese and foreign investors and business alike, we are exploring, through the China (Shanghai) Pilot Free Trade Zone, a management model featuring pre-establishment national treatment plus a negative list approach. 

    As an active participant, staunch supporter and important contributor of an open, rule-based multilateral trading system, China has unswervingly supported the WTO and assumed its due responsibilities as a major developing trading nation.

China has fulfilled in a timely manner its notification obligations under the WTO’s financial crisis monitoring mechanism, and honored its commitment to implement the Agreement on Trade Facilitation according to the timetable set up by the Bali Ministerial.

As the host to this year’s APEC meetings, China contributed to the adoption at the Minister Responsible for Trade Meeting, a Standalone Statement on Supporting the Multilateral Trading System.

China has, since 2008, contributed to the Aid for Trade Fund under the multilateral framework of the WTO. China also established China’s LDCs and Accessions Program, and donated US$1.2 million in total to this Program.  

China has been the largest export market for the LDCs for five consecutive years, providing since July 2010 duty-free treatment to exports from the LDCs, and importing over US$2.2 billion of goods from 26 beneficiary countries, and offered a tariff exemption of RMB1.34 billion yuan.

China has refrained from taking trade protectionist measures, remained vigilant against all forms of trade protectionism, and remained committed to exercising maximum trestraint in applying measures that may be considered WTO compatible but still have a significant protectionist effect.

While supporting the multilateral trading system with the WTO as its core, China has participated in some bilateral and regional agreements, including the recently entering-into-force of China-Iceland and China-Switzerland free trade agreements. China is seriously engaged in negotiation of a bilateral investment treaty with the US and a comprehensive inestment agreement with the EU.

China has also come up with the strategic initiatives of "Silk Road Economic Belt" and "Maritime Silk Road" to promote shared prosperity among different regions.   

As a champion of the multilateral trading system, China will, as always, join hands with other WTO members build on the momentum created inBali and secure an appropriate and balanced conclusion to the DDA.

China’s reform and opening-up not only augurs well for its 1.3 billion people but also the rest of the world. As the largest trading partner for more than 120 countries and regions, China imported over the past years US$ 2 tillion goods and created immense job and business opportunities. In the coming five years, China will import more than US$10 trillion worth of goods and invest over US$500 billion overseas. Outbound visits by Chinese tourists will exceed 500 million.

Having said the above, I wish to underline here that despite being the biggest merchandise trader and the second largest economy, Chinaremains a developing country.

China’s per capita GDP is below US$7000, ranking 84th in the world and 101 out of 187 in UNDP’s human development index. Today, some 128 million Chinese people still live under the porverty line. "Made in China" products remain at the lower end of global value chain. There is a long way to go before China realizes modernization. China therefore can only assume responsibilities in international trade and economic affairs commensurate with its level of development.

In conclusion, I wish to once again thank Bruegel for bringing us here to reflect upon the future of the multilateral trading system.

I am sure deliberations will contribute to generate fresh dynamism of the WTO and channel our energy towards a common good, the promotion of constructive cooperation. This we owe to our common belief in trade as a vehicle for green growth and poverty reduction and that keeping multilateralism alive serves our long-term interest.

Thank you for your attention.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

View comments
Read article More on this topic More by this author

Opinion

Ubu ou Machiavel?

L'administration Trump veut imposer une approche transactionnelle des relations économiques gouvernée par le rapport de force bilatéral en lieu et place du contrat multilatéral. Un défi d'une ampleur inédite pour l'Europe.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: July 6, 2018
Read article More on this topic More by this author

Opinion

Can Multilateralism Adapt?

Global governance requires rules, because flexibility and goodwill alone cannot tackle the hardest shared problems. With multilateralism under attack, the narrow path ahead is to determine, on a case-by-case basis, the minimum requirements of effective collective action, and to forge agreement on reforms that fulfill these conditions.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: July 3, 2018
Read article More on this topic More by this author

Blog Post

US tariffs and China's holding of Treasuries

China has the biggest bilateral trade surplus vis-à-vis the US but is also a top holder of US government bonds. While China has started to counteract US trade tariffs, economists have been discussing the case of China acting on its holdings of US Treasuries. We review recent contributions.

By: Silvia Merler Topic: Global Economics & Governance Date: July 2, 2018
Read about event

Upcoming Event

Sep
3-4
08:30

Bruegel Annual Meetings 2018

The 2018 Annual Meetings will be held on 3-4 September and will feature sessions on European and global economic governance, as well as finance, energy and innovation.

Speakers: Maria Åsenius, Richard E. Baldwin, Carl Bildt, Nadia Calviño, Maria Demertzis, Mariya Gabriel, Péter Kaderják, Joanne Kellermann, Jörg Kukies, Emmanuel Lagarrigue, Philippe Lespinard, Montserrat Mir Roca, Dominique Moïsi, Jean Pierre Mustier, Ana Palacio, Jean Pisani-Ferry, Lucrezia Reichlin, Norbert Röttgen, André Sapir, Jean-Claude Trichet, Johan Van Overtveldt, Margrethe Vestager, Reinhilde Veugelers, Thomas Wieser, Guntram B. Wolff and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance, Finance & Financial Regulation, Global Economics & Governance, Innovation & Competition Policy Location: Brussels Comic Strip Museum, Rue des Sables 20, 1000 Brussels
Read article

Blog Post

Trading invisibles: Exposure of countries to GDPR

This blog post identifies provisions of the EU’s General Data Protection Regulation (GDPR) that affect foreign companies, and discusses implications for trade in services with the EU. The authors provide a novel mapping of countries’ relative exposure to these regulations by a) measuring the digital maturity of their service exports to the EU; and b) the share of these exports in national GDP.

By: Sonali Chowdhry and Nicolas Moës Topic: European Macroeconomics & Governance, Global Economics & Governance Date: June 28, 2018
Read about event More on this topic

Past Event

Past Event

Trade war trinity: analysis of global consequences

Analysis of the long-term impact of the trade war and its three key players: EU, US, and China.

Speakers: Alicia García-Herrero, Ignasi Guardans and Carl B Hamilton Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 28, 2018
Read article More on this topic

Blog Post

China’s strategic investments in Europe: The case of maritime ports

The EU is currently working on a new framework for screening foreign direct investments (FDI). Maritime ports represent the cornerstone of the EU trade infrastructure, as 70% of goods crossing European borders travel by sea. This blog post seeks to inform this debate by looking at recent Chinese involvement in EU ports.

By: Shivali Pandya and Simone Tagliapietra Topic: Global Economics & Governance Date: June 27, 2018
Read about event More on this topic

Past Event

Past Event

EU-LAC Economic Forum 2018

The second edition of the EU-LAC Economic Forum, a high level gathering for in-depth research-based exchanges on economic issues between European, Latin American and Caribbean (LAC) policy makers and experts.

Speakers: Angel Badillo, Federico Bonaglia, Maria Demertzis, Sylvie Durán, Guillermo Fernández de Soto, Alicia García-Herrero, Elisa Grafulla, Gonzalo Gutiérrez, Bert Hoffmann, Juan Jung, Emilio Lamo de Espinosa, Carlos Malamud, J. Scott Marcus, Neven Mimica, Fabio Nasarre de Letosa, Detlef Nolte, Anne Sperschneider and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 26, 2018
Read about event More on this topic

Past Event

Past Event

State of transatlantic trade relations

A conversation on transatlantic relations with Michael Froman.

Speakers: Michael Froman, André Sapir and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 21, 2018
Read article More on this topic

Blog Post

The G7 is dead, long live the G7

The summit in Charlevoix left behind a Group of Seven in complete disarray. The authors think that the G-group, in its current formulation, no longer has a reason to exist, and it should be replaced with a more representative group of countries. In this fast-changing world, is the G7 only a relic of the past?

By: Jim O‘Neill and Alessio Terzi Topic: Global Economics & Governance Date: June 13, 2018
Read about event

Upcoming Event

Oct
11-12
20:00

Policy responses for an EU-MENA shared future

In the third edition of the "Platform for Advanced & Emerging Economies Policy Dialogue" we will discuss trade flows and trade policy between Europe and MENA, integration of developing economies into global value chains, and regional energy relations.

Speakers: Karim El Aynaoui and Guntram B. Wolff Location: Rome
Read article Download PDF More on this topic

Working Paper

European and Chinese trade competition in third markets: the case of Latin America

While Europe continues to hold important trade powers, the rise of China in the global economy has significantly reshaped international trade and competition. In this paper, the authors show that the degree of competition between both powers in Latin America has risen in the past decade due to China's increased trade of high-quality products. They address whether China is an increasingly relevant competitor for Europe in Latin America and in which sectors China-EU competition is fiercer. These findings should be a wake-up call to Europe in its quest to remain competitive at the global level.

By: Alicia García-Herrero, Thibault Marbach and Jianwei Xu Topic: Global Economics & Governance Date: June 7, 2018
Load more posts