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 by this author

Opinion

The world deserves a more effective G20

As the presidency shifts from Argentina to Japan at Buenos Aires (and then to Saudi Arabia) it is worth asking why the G20 has endured this long and what it needs to remain relevant in a dramatically changed world.

By: Suman Bery Topic: Finance & Financial Regulation, Global Economics & Governance Date: November 29, 2018
Read article More on this topic More by this author

Podcast

Podcast

Backstage: Shared prosperity for the EU and north Africa

Bruegel's director Guntram Wolff looks at north Africa's economic growth in the light of the region's trade agreements with the EU, welcoming Karim El Aynaoui and Uri Dadush to the Backstage series on 'The Sound of Economics'.

By: The Sound of Economics Topic: Global Economics & Governance Date: November 27, 2018
Read article Download PDF More on this topic

Policy Contribution

Assessing the European Union’s North Africa trade agreements

In this Policy Contribution, the authors provide an economic assessment of the trade agreements between the EU and North Africa. They argue that the common view of the agreements is overly negative, and point to policy conclusions that could increase regional integration.

By: Uri Dadush and Yana Myachenkova Topic: Global Economics & Governance Date: November 26, 2018
Read article More on this topic More by this author

Podcast

Podcast

Deep Focus: The G20 in a changing world order

In this episode of Deep Focus, Bruegel fellow Suman Bery joins Sean Gibson to elaborate on his recent Policy Contribution on the G20's performance over the past decade, and the forum's future prospects.

By: The Sound of Economics Topic: Global Economics & Governance Date: November 20, 2018
Read article Download PDF More on this topic More by this author

Policy Contribution

The G20 turns ten: what’s past is prologue

This Policy Contribution assesses the performance of the G20 since its first summit held in November 2008 to understand what could lie ahead for the institution.

By: Suman Bery Topic: Global Economics & Governance Date: November 15, 2018
Read article More on this topic More by this author

Blog Post

Is this time different? Reflections on recent emerging-market turbulence

Since the beginning of 2018, currencies of two large emerging-market economies – Argentina and Turkey – suffered from substantial depreciation. Other currencies also recorded losses. Which factors are determining macroeconomic and financial stability in emerging-market economies? And what can be done to prevent a crisis and avoid its economic, social and political costs?

By: Marek Dabrowski Topic: Global Economics & Governance Date: November 14, 2018
Read article More on this topic More by this author

Blog Post

US mid-term elections and the global economy

Democrats won control of the House and Republicans held onto the Senate in the most consequential US mid-term elections in decades. Bowen Call reviews economists’ and scholars’ analyses of the impact this might have on the world economy.

By: Bowen Call Topic: Global Economics & Governance Date: November 12, 2018
Read article More on this topic More by this author

Opinion

The global economy’s three games

In this column, Jean Pisani-Ferry portrays the current international economic and geopolitical order as increasingly reminiscent of chess. Three key players: the US, China and a loose coalition of the other G7 members play three games simultaneously, and no one knows which game will take precedence.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: October 29, 2018
Read article More on this topic More by this author

Podcast

Podcast

Backstage: Japan’s inflation problem and monetary policy options

Bruegel senior fellow Zsolt Darvas welcomes Sayuri Shirai, professor at Keio University, visiting scholar at the Asian Development Bank Institute and former Member of the Policy Board of the Bank of Japan (BOJ), for a discussion of the Japanese monetary policy outlook. 

By: The Sound of Economics Topic: Global Economics & Governance Date: October 26, 2018
Read article Download PDF More on this topic More by this author

Policy Contribution

Should we give up on global governance?

The pervasive gridlock affecting the traditional global governance approach calls into question the idea of broadening its scope beyond its core remit, and it calls for alternatives, either as substitutes for obsolete arrangements or to address emerging collective action problems in new, inadequately covered fields.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: October 23, 2018
Read article More on this topic More by this author

Blog Post

The United States-Mexico-Canada free trade agreement (USMCA)

While final ratification of the USMCA (also known as Nafta 2.0) is pending, we review economists’ assessment of the agreement.

By: Silvia Merler Topic: Global Economics & Governance Date: October 22, 2018
Read article More on this topic More by this author

Opinion

How could Europe benefit from the US-China trade war?

Under pressure from the US, Beijing is set to be more open to making new allies.

By: Guntram B. Wolff Topic: Global Economics & Governance Date: October 18, 2018
Load more posts