We'll All Gain from China's WTO Entry
The escalating trade dispute between China and Japan is a sobering reminder of how disruptive China's rise as an economic power could be and how much the rest of the world has to gain from China's rapid entry into the World Trade Organization. Only by bringing China into a rules-based system is there hope of ensuring that it is a force for progress.
Fortunately, China and the U.S. have just announced that they've settled the remaining disputes standing in the way of WTO entry. Concerted negotiations could see Beijing join around the time a new round of trade talks kicks off in Qatar in November. The agreement marks a welcome pragmatism in both Beijing and Washington following the recent spy-plane incident. China, in particular, has toned down the militaristic rhetoric to cut a pragmatic economic deal.
The WTO isn't going to solve all the problems between China and its trading partners. Tremendous social dislocation is in store for hundreds of millions of farmers and workers at state companies once markets are opened up and the winds of global competition blow through deeply into China. But the world got it badly wrong a century ago as Germany and Japan clamored for a seat at the table of the rich and powerful, and didn't get it. We can't afford to make the same mistake with China. Rising trade tensions with Japan show it is time to fully integrate China into the world economy system.