The effect of China's less stringent trade policies on the global economy - Essay Example

rogress in conforming to WTO norms has been slow and a number of issues still to be resolved before China can be considered fully integrated into the international trade regime. Both China and her trading partners are reaping full advantage of their trade liberalisation but not to an extend due to a liberal trade regime and strong protection for foreign intellectual property requirements. Moving China’s economic system from central planning and command to market socialism has had to undergo several changes making her international trading and domestic regulatory regimes to undertake fundamental changes as a result of its WTO accession commitments.

In this way, China has had to reduce or eliminate a wide range of trade barriers and open its domestic industries to increased competition, the modification and addition of sections of her domestic legislation such as those relating to the protection of intellectual property in order to be in compliance with WTO protocols (USTR, 2003a). The central government has also committed itself to reduce the state’s role in the economy in order to satisfy both domestic and international calls for a more and better market-based system.

These changes will mean separating government from business, leading to the privatizing additional state enterprises, fostering a more independent central banking system and reducing corruption (The Economist, 2001a). The Chinese economy is expected to grow by 9% per year from 2006 – 2015 (even though a slow in growth is expected in 2015 – 2020) since her government began dismantling its command economy in favour of markets and opening its markets to foreign goods and investment. It is further predicted that by 2020 China’s GDP would have grown to US$10 trillion.

Since 1990, the Chinese economy has not witnessed a GDP of less than 4%. In 1992, the growth rate peaked at 14 percent (The Economist, 2000). Between 1997 and 2000, the economy grew by 24.7 percent. The growth rate for each year