Introduction

China is one of the World Trade Organizations G33 members. The G33 currently consists of 44 developing nations that face similar trade problems. They have proposed special rules to the WTO such as restricting access to their o n agricultural mar!ets. "fter #$ years of multilateral negotiations China became a member of the WTO on %ecember ##& '((#. This as the longest negotiation for accession into the organization. The Communist )arty of China on the Chinese Civil War in #*4*. "fter the )eople+s ,epublic of China as established in October #*4*& China adopted a political and economic order modeled on the -oviet e.ample in building up the socialist country. China adhered to a foreign policy of pro/-oviet and pro/communism and they practiced minimal trade ith foreign countries. 0n the #*1(s& in order to turn around its isolated situation in foreign trade& China 2opened up3 its borders to practice open trade ith many of the "sian and "frican countries. -ome do not consider China to be a developing country due to the fact that they have such a huge Gross %omestic )roduct 4G%)5. "s of '((6& the Gross %omestic )roduct of China as at 74.3 trillion. One of the main reasons China is considered a developing country is because the poverty level is so lo . There are some people that are living off& hat is e8uivalent to& # 9.-. dollar a day. The poverty rate of China has been reduced to 6: as of '((#. Chinas main industries are the agriculture& service& and manufacturing industries. They are all gro ing at steady rates and contribute significantly to ard the countries G%). China e.ports more goods than it imports. This means that China has a positive trade surplus. This is almost unheard of for a developing country and another reason hy some do not consider China to be a developing nation anymore. 0mproved infrastructure has helped Chinas economy. The late #*6(s sa a prioritizing of improving the rail ays& road ays& and ater ays of China. The 9-"/China WTO Trade "greement as the most influential trade agreement that China has entered into so far. 0t affected the 9nited -tates and China in such a drastic ay because each country is the number one trade partner of the other. The G%) of China improved drastically due to this agreement and the 8uality of living for many of the Chinese people as improved because business as opened up to them.

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Economy
China has become a ma;or player in the current orld economy due to the past 3( years of constant gro th. China is no one of the main economic drivers& along ith the 9nited -tates. They have had the fastest gro ing Gross %omestic )roduct 4G%)5 gro th rate out of any ma;or nation at #(.': per year. China is currently ran!ed 3rd in regards to G%)& behind the 9nited -tates and <apan. With Chinas 74.3 trillion G%) and a #(.': gro th rate it ill be the country ith the highest G%) ithin 4( years.

Chinas GDP starts to raise after the restructuring of the economy 0n the past 3( years the Chinese government has restructured and reformed their economy. The economy used to be a -oviet based central planned economy that as closed to global trade. 0n the late #*1(s the Chinese government reformed the economy to a mar!et socialist/oriented economy to open up its borders to orld trade. This reform made the private sector of Chinas economy gro at an incredible rate at first and the poverty rate ent do n from =3: in #*6# to only 6: in '((#. >ei;ing has initiated the move to upgrade the status of private enterprise. They ant to slo ly ma!e companies less state o ned. This ill force many companies to improve their basic fundamentals and start to rely less on state support. -ince >ei;ing is trying to change the business model that they have follo ed for many years& they ill be facing some very serious challenges. There has been a shift in strategy on the demand side. 3

"ccording to ?->C Global "sset @anagement& China has recently passed the 9nited -tates in regard to consumption. 0t has become the primary destination for the orld e.ports as of @ay '((6 4>urggraf& '((65. China imported nearly 7$.6 trillion orth of goods in the first seven/month period of '((6 alone. Consumption in China has become more of an economic driver than investment in recent years. 0n regards to supply& the service sector is e.pected to gro past the industry sector& hich ill contribute more to gro th for China. "ny decision on a ne strategy for China ill not happen until after the current recession. China& along ith the 9nited -tates& needs to figure out ho to fi. the current economic crisis before they can thin! about continuing their steps in the direction of strategy planning.

Main Industries
China has several main industries. They are the agriculture& service and manufacturing industries. They all contribute significantly to the G%) of China. Agriculture Industry The agriculture industry in China has been gro ing at about 3: per year. 4=: of Chinas labor force is in this industry. -ince the government decided to focus more on rural development& there has been a huge increase of investments into farming. >ecause of the large amount of money put into this sector& production as e.pected to rise by at least =: in '((6. 9nfortunately the pro;ected production increase as not achieved due to poor eather. ,ice is the main food crop& but tea& sugar and fiber crops are all important cash earners. China is also the orld+s biggest producer and consumer of cotton. Service Industry The service sector outperformed other parts of the economy in '((6. Gro th as supported by government efforts to boost consumption as ell as spending associated ith the Olympic Games. The ban!ing industry& hich faced holesale collapse in the late #**(s& has recovered. They are no more commercially oriented and non/performing loans have fallen sharply. Manufacturing Industry @anufacturers+ emphasis on high/volume& lo /cost methods are not or!ing ell. Aittle attention is given to 8uality& governance or brand development. The result has been several 2recall crises3& leading buyers to steer a ay from Chinese/made products. %omestic demand for vehicles has slo ed perceptibly but is still rising by more than #=: per year.

Exports
One of the carriers leaving a Chinese port headed for the US

China ran!s first in the orld for farm outputs. "ccording to the 9nited Bations World Cood )rogram& in '((3& China fed over '(: of the orlds population hile having only 1: of the orlds arable land 4Dleine& #**15. China has only 1=: as much farmland as the 9nited -tates but still produces 3(: more than e do. This is thought to be because the population of China is so large that they have much more labor resources than the 9nited -tates. "fter the Chinese Civil War ended in #*=(& the Communist )arty redistributed the farmland from the landlords to about 3(( million peasants in #*='. The government then completely too! over the land and turned them into government/ operated farms. ,ice is the main food crop produced by China. Tea& apples& sugar& heat& cotton& potatoes& and peanuts are some of the other ma;or items produced by the Chinese as ell. Chinas agriculture sector has been gro ing at an average of about 3: per year. "pples have become a large e.port for China. This year China ill e.port *(: of the #=(&((( metric tons of concentrated apple ;uice it produces. @ost of this ;uice comes from the #(/'(: of 2bad3 apples& the apples that are too small or misshapen. "s of the beginning of '((=& China as responsible for 33: of the orld apples produced.

Imports
Chinas imports in '((6 ere over 7#.#3 trillion. The number one import for the Chinese nation is semi/conductors at 7=.* billion in '((6. This number is so high because China produces so many goods for the orld. "ll of these semi/conductors are used in the manufacturing of goods such as computer parts and accessories& hole computers& and items around your house such as coffee ma!ers& micro aves& and other small appliances.

-urprisingly& the number t o imported good is civilian aircraft. The amount imported in '((6 as 7=.3 billion. @ost of all Chinese imports are not end products. They are mostly all used& in some ay& for the manufacturing of e.ports. 0n '((6& Chinas imports for industrial machines topped out at 7#.*1 billion. These machines are all used to produce the goods that "mericans use every day. "lthough China produces a lot of cotton themselves& they still need to import more of it to ma!e the millions of shirts that they e.port each year. Cotton imports in '((6 reached 7'.# billion.

Infrastructure
Transportation is a ma;or factor in China+s national economy. Crom #*4* till the mid #*6(s Chinas transportation system occupied a lo priority in the countrys national development. This inade8uate system hindered the movement of coal from the mines to the end users and the delivery of imports and e.ports as e.tremely slo . This underdeveloped transportation system slo ed the pace of Chinas economic development. "s of the mid #*6(s& any long distance hauling as done by railroads and inland ater ays& and medium distance hauling as done truc!s and busses. The infrastructure of China at this time as very underdeveloped. The government decided to focus many of their resources on this problem. They anted to 2open up3 China and ma!e it more efficient for shipping. The rail ays ere state o ned and run by the @inistry of ,ail ays. The ater ay shipping as still o ned by the government& as as the national airline. >oth government and private enterprises o ned the truc!ing companies. When China decided to upgrade their infrastructure they developed a Cive/Eear )lan. This Cive/Eear )lan prioritized many of the transportation related pro;ects. This plan called for a 3(: increase in volume of the various !inds of cargo transportation by #**(. The plan ould update the passenger and freight transportation and improving railroad& ater ays& and air transportation. The government planned to increase state& local& and private investment to achieve these goals. The Cive/Eear )lan focused mainly on improving and building ne rail ays. Their goal as to build 3&$(( !ilometers of ne rail lines& electrify 4&((( !ilometers of e.isting rail ays& and double/trac! 4running one trac! in each direction to improve efficiency5 3&3(( !ilometers of e.isting lines. The plan also included the building and rebuilding of over #4(&((( !ilometers of high ays. >y the end of the Cive/Eear )lan there as to be # @illion !ilometers of high ay in China. F.isting airports ere to be upgraded and ne ones built to improve the efficiency of airfreight.

Treaties
!u "intao Gives #hum$s%Up for US% China #rade Agreement USA%China &#O #rade Agreement The most influential treaty for China as the 9-"/ China WTO Trade "greement. This deal as signed in #*** and helped both countries involved. There ere significant cuts in tariffs for both sides. Tariffs ere cut to an average of *.4: overall and 1.#: on 9- products. This deal made China participate in the 0nformation Technology "greement 40T"5& hich eliminated all tariffs on products such as computers& telecommunications e8uipment& semiconductors& computer e8uipment and other similar products. China cut the auto tariffs from bet een #((/6(:& do n to '=: by '((1. The largest cuts happened in the first years after the agreement. "uto parts tariffs ere cut do n to an average of #(: by the end of '((1. Tariffs on ood and paper ere also cut. The ood tariffs ere bet een #'/#6: and the paper tariffs bet een #=/'=: but these levels ere brought do n to =: and 1.=: respectively. China also lo ered tariffs on most chemicals do n to $.=: from #6:. The 9nited -tates agreed to eliminate 8uotas generally by '((3& but no later than '(($ because the WTO bars 8uotas and other 8uantitative restrictions. China has agreed to eliminate these restrictions ith phase/ins 4changes that occur over several years5 to most products. The 8uotas on most products ould gro at a #=: annual rate in order to ensure that the Chinese mar!et ould not be over helmed ith a sudden increase in product. One of the biggest 8uotas eliminated as the auto 8uota. 0t as agreed in the deal that the 8uota ould be phased out by '(($. The treaty also opened the door for 9- companies to conduct business in China ithout so many restrictions. >efore the treaty& companies ere only allo ed to distribute goods that ere produced in China. The treaty changed the distribution rules and allo ed companies to import goods to China for sales. Telecommunication services ere previously restricted because they ere a state o ned entity. The treaty opened up the telecommunication services and allo ed companies to operate this service. China then became a member of the basic Telecommunication "greement. >efore the deal& foreign ban!s ere not allo ed to do business in mainland China ith a fe minor e.ceptions. China had severe geographical restrictions on the establishment of foreign ban!s. With the signing of the agreement& China agreed to full mar!et access in five years for 9- ban!s. Aocal currency business ould start t o years after accession.

#he 'conomic Cooperation (rame)or* Agreement The Fconomic Cooperation Crame or! "greement is bet een Tai an and China that is currently being revie ed. China has ;ust recently started trade negotiation tal!s ith Tai an. The Tai anese )resident& @a Eing/<eou& ants to improve relations ith >ei;ing. ?e says that an agreement is needed to ease trade barriers to !eep Tai an competitive. The agreement is e.pected to be signed during the tal!s in Ban;ing& China. The agreement ould permit the free flo of many goods& services& and capital mostly for Tai an. -ome of the advantages to the signing of the agreement ould be that ban!s ould be allo ed to open branches in each others territory& Chinese ould be able to invest in mainland Tai an& and both countries ould cooperate in criminal investigations. 4"ssociated )ress& '((*5

Conclusion and Recommendations

0n conclusion to this formal report& China has a lot to offer the orld in regards to trade. 0t is a country that has an abundant supply of labor and capabilities. They have sho n that they are able to 2rise from the ashes3 hen they restructured their economy. This restructuring spurred the enormous gro th rate that China has had since the early #**(s. 0t has helped millions get out of e.treme poverty and improve their 8uality of living. 0 thin! that China has 8uite a long ay to go to bring up the horrifying poverty level that it currently has. "lthough China has come a long ay in this regard& it is unacceptable to ;ust stop attempting to get the remaining #(( million people out of e.treme poverty level hich is currently at less than 7#.'= per day. This is a target that needs to be achieved for the Chinese. 0t is not a ;ob for ;ust the Chinese thoughG it is a ;ob for the entire orld to or! on. The 0@C& the WTO and any country that trades ith China needs to have this goal on their mind to be able to someday get as close as possible to eliminating e.treme poverty in China. The agriculture sector of China is very impressive. The fact that they have been able to feed '(: of the orlds population ith only 1: of the arable land is something for the 9nited -tates to study. China out produces the 9- by 3(: ith only 1=: as much land as us. 0 thin! that as long as China doesnt have a year of bad eather they ill continue to out produce the 9nited -tates in regard to agriculture. The 9-"/China WTO Trade %eal opened up many possibilities for both countries involved. The 9- as able to conduct much more business in China because of this deal. This treaty helped raise the Chinese G%)& hich in turn helped raise the poverty level. 0 thin! that this agreement as one of the best things for China because of all the advantages China gained from it. The agreement helped strengthen the Chinese economy to a point here it had never been and their economy continues to gro at a steady rate. Word Count H '&**1