Buying and manufacturing products in China could be even more advantageous in 2017. For 15 years, until December 11th last year, its prices have been subject to strict anti-dumping rules imposed by the World Trade Organization (WTO). The aim was to prevent China from selling at prices below those of production in the buying countries. With the expiration of the 15-year quarantine, China is negotiating one by one the elimination of anti-dumping barriers and its formal entry into the WTO. As a result, hundreds of products and raw materials may flood markets at much lower prices.After arduous negotiations, China joined the WTO in 2001 in an attempt to open up to the global market by breaking down barriers and facing the enormous challenge of reducing state subsidies and protections. The Chinese market and industry opened up to foreign competition, which provided a significant incentive for its exports and foreign investment in the Asian country.The elimination of anti-dumping barriers for China would imply a significant reduction in the prices of exports of products that have been controlled by the WTO so far.Last December marked the 15th anniversary of China’s entry into the WTO, a period during which the country has experienced strong economic growth. China has become the world’s second-largest economy during this time. Thanks, among other things, to its integration into the WTO, the total volume of Chinese exports and imports increased from $0.51 trillion in 2001 to $3.96 trillion in 2015.Chinese prosperity has also created business opportunities for other countries. The figures make it clear: its contribution to real GDP growth worldwide has evolved over these years from 0.53% to nearly 25%. Over the next 5 years, foreign investment in the Asian country is expected to reach $750 billion, and China’s total volume of exports and imports is expected to reach $8 trillion.
A new status for China in the WTO, the first step towards eliminating anti-dumping barriers
Since December 12th, 2016, China should be considered by the WTO as a market economy with all the implications that entails. One consequence of this change in status lies in the modification of anti-dumping measures that have been applied until now, which would benefit the prices of Chinese imports in Spain for products that have been restricted so far.The process is not automatic, and China has requested the elimination of these economic barriers, which implies changes in the legislation of various WTO members in the field of price discrimination to prevent unethical practices.Since joining the WTO, China has complied with most of the rights and obligations that come with being part of the General Agreement on Tariffs and Trade. One of the main exceptions was in the area of dumping, as China was established as a non-market economy due to the unrealistic conditions of its market.Currently, China is negotiating a modification of these restrictions to be considered as an economy where the same market conditions as the rest of the WTO members prevail. It remains to be seen how the process unfolds, as China must demonstrate compliance with those conditions. The next step would be the adaptation of the legislation of the other countries to grant China its new status.
