Govenrment and Business Environment Case Study

China’s Credentials as a Market Economy

OR

Abstract:
China's commodity trade, prior to the late 1970s was determined almost entirely by economic planning. The State Planning Commission's import plan covered more than 90% of all imports. The economic reforms that started in 1978 gradually reduced the interference of the state into the trade activities. China's accession into the World Trade Organisation (WTO) in 1991 further hastened the process of reform. However, China always had conflicts with its trading partners on different issues, the key ones being undervaluing its currency and the dumping of goods. Even by 2004, most of the substantial trading partners of China, including the United States and the European Union (EU), were not willing to recognise the country as a 'market economy'.

Pedagogical Objectives:

• To discuss the factors that held back the US and the EU from granting a market economy status to China
• To discuss China's stance on the issue and how it was trying to leverage its strong economic position to become recognised as a market economy.

Keywords : China's market economy status, World Trade Organisation (WTO), Economic planning, State-owned enterprises (SOE), Foreign Trade Corporation (FTC),Government and Business Environment Case Study, Township and village enterprises (TVE), Special economic zones (SEZ), China Centre for Economic Research (CCER), General Agreement on Trade and Tariffs (GATT),Business Environment Case Study, Foreign direct investment (FDI), Non-market economy (NME), Free Trade Agreements (FTA), Yuan, renminbi, Anti-dumping, protectionism, Gross domestic product