Wto Accession and Financial Reform in China

Top Chinese leaders regard the WTO accession as the second most important change in China’s economic policy regime, following Deng Xiaoping’s reform and opening-door policy in the late 1970s. This change will have undoubtedly profound impacts on the future course of China’s economic development. There are many discussions among academic and policy circles in China regarding the possible impacts of WTO accession on the Chinese economy. Some scholars and policymakers are very positive about the accession. They believe that any drawback will be overwhelmed by the efficiency gains, injecting new growth impetus into China’s reform and economic development. According to them, China will enter an entirely new development stage. However, other critics are worried that China’s weak economic base, due to the unfinished transition from a planned to a market economy, will not be able to sustain the tremendous external shocks brought about by entry to the WTO. They argue that the WTO accession will do more harm than good to the Chinese economy.