Delivering a lecture on ‘China’s entry into WTO: Impact on developing countries’, here, Professor Richard Cooper, Maurits C Boas Professor of International Economics, Harvard University, said that since China will not have open access to the textile market in the US till 2008, other major textile-exporting developing countries, including India, should take advantage of the fact that they will not have to compete with China for four full years. These nations should use the time to establish themselves in the US market, he said at the lecture organised by the Federation of Indian Chambers of Commerce & Industry (Ficci) and the Indian Council for Research on International Economic Relations.
China’s accession to WTO at the WTO ministerial meet in Doha in November will create opportunities for everyone to increase their imports to the country as it has agreed to open its markets considerably in five years time and also slash import tariffs on agricultural and industrial goods, Prof Cooper said. However, Prof Cooper added, it would be too much to expect that China would actually change all its rules and regulations and make it WTO compliant by the end of five years. China will have to move away from the present system of using personal influence with the authority to get any thing done to a system based on more transparent rules. “It requires a full generation to change its ways of doing things.”
Ficci president Rajendra Lodha said China’s commitment to decrease average bound tariff level for farm products to 15 per cent and for industrial goods to 9 per cent had provided significant potential gains for Indian business in accessing Chinese markets. China’s entry into WTO will be attractive to foreign firms and also bring in substantial FDI into the country. China has, over the last 20 years, received $400 billion of FDI, third only to the US and UK, he added.
He said China’s reluctance to change its rules and make them more transparent may lead to a number of complaints from WTO members. China would then be forced to play a dual role of fighting its case at the WTO and also trying to convince its local government of the need to bring about changes in the functioning of the government.