China became a member of theWorld Trade Organization (WTO) on 11 December 2001,[1] after the agreement of the Ministerial Conference of the WTO.[2] The admission was preceded by a lengthy process of negotiations and required significantchanges to the Chinese economy. Its membership has been contentious, with substantial economic and political effects on other countries (some times referred to as theChina shock) and controversies over the mismatch between the WTO framework and China's economic model.[3][4] Assessing and enforcing compliance have become issues in China-US trade relations,[5] including how China's noncompliance creates benefits for its own economy.[6]
Until the 1970s, China's economy wasmanaged by theChinese Communist Party (CCP) and was kept closed from other economies. Together with political reforms, China in the early 1980s began to open its economy and signed a number of regionaltrade agreements. China gained observer status withGATT and from 1986, began to work toward joining that organisation. China aimed to be included as a WTO founding member (which would validate it as a worldeconomic power) but this attempt was thwarted because theUnited States, European countries, andJapan requested that China first reform various tariff policies, includingtariff reductions, open markets and industrial policies.
The process was envisioned and endorsed byUS PresidentBill Clinton,CCP General SecretaryJiang Zemin andChinese PremierZhu Rongji, without whose decade-long efforts it would have come to naught.[7]
After the1997 Asian financial crisis, China sold off or merged many unprofitablestate-owned enterprises. In 1998, China reformed theState Council to greatly reduce the mandate of theState Planning Commission and increase the mandate of the State Economic and Trade Commission. This shift also corresponded to the change in premiership fromLi Peng toZhu Rongji, the latter of whom strongly believed that China needed deepereconomic restructuring. This, which had been happening since the 1980s, includedcrackdowns on corruption and the establishment ofchambers of commerce.[8]
If theWorld Trade Organization Ministerial Conference of 1999 and related1999 Seattle WTO protests were the penultimate step before Chinese accession,[9] the May 2000 passage of PERMANENT NORMAL TRADE RELATIONS WITH CHINA by the House of Representatives underSpeaker Hastert was the crowning glory of Clintonian foreign policy.[10][11][12] TheDoha ministerial conference of November 2001 marked the ultimate step prior to China's accession.[13]
Formal diplomatic relations between the United States and the People's Republic of China were notestablished until 1979, and even afterward, trade relations were hampered by the high tariff rates of theSmoot–Hawley Tariff Act of 1930. After the two governments settled asset claims dating from theKorean War in 1950,Congress temporarily granted Chinamost favored nation status in 1980. Chinese-American trade was still hindered by theJackson–Vanik amendment of 1974, which made trade with the United States contingent on certainhuman rights metrics.[14]
By 1984, the United States had become China's third-largest trading partner, and China became America's 14th largest. The annual renewal of China's MFN status was constantly challenged by anti-Chinesepressure groups during UScongressional hearings. For example, U.S. imports from China almost doubled within five years from $51.5 billion in 1996 to $102 billion in 2001.[15] The Americantextile industry lobbied Congress for, and received, tariffs on Chinese textiles according to the WTOAgreement on Textiles and Clothing. In reaction to the1989 Tiananmen Square protests' suppression, theBush I administration and Congress imposed administrative and legal constraints on investment, exports, and other trade relations with China.[14]
In advocating for China's accession, US policymakers articulated political and ideological expectations. PresidentBill Clinton argued that China's entry into the WTO would promote peace and reform, stating, “Today the House of Representatives has taken a historic step toward continued prosperity in America, reform in China, and peace in the world”;[16] PresidentGeorge H. W. Bush had similarly stated that “no nation on Earth has discovered a way to import the world’s goods and services while stopping foreign ideas at the border,”[17] implying that greater trade openness would eventually lead to democratic development. (see:Democracy and economic growth;Democratic peace theory) However, these expectations are gravely challenged. According to theCouncil on Foreign Relations, WTO membership strengthened theChinese Communist Party’s control, with economic gains reinforcing its authoritarian model rather than encouraging political reform.[18]
TheClinton presidency from 1992 started with anexecutive order (128590) that linked renewal of China's MFN status with seven human rights conditions, including "preservation of Tibetan indigenous religion and culture" and "access to prisons for international human rights organisations"—Clinton reversed this position a year later. Other challenges to Sino-American relations in this decade included theinvestigations into Chinesenuclear espionage which produced theCox Report, the persecution of Taiwanese-American scientistWen Ho Lee for unproven allegations of espionage for the PRC, and the 1999United States bombing of the Chinese embassy in Belgrade. CCP General SecretaryJiang Zemin visited USA from October 27 to November 3, 1997, and Clinton paid a return trip June 25 to July 3, 1998. United States and China reached agreement on terms for China's entry into WTO after talks in Beijing in November 1999, subject to approval by Congress.[19]
Relations warmed after the September 2001 initiation byGeorge W. Bush of thewar on terror.[20]
These changes were difficult steps for China and conflicted with its prior economic strategy. Accession meant that China would engage in global competition according to rules that it did not make. China's admission was "an enormous multilateral achievement" that marked a clear commitment towardmultilateralism.[21]
Under Article 15 of the protocol by which China joined the WTO, China was recognized as a Non-market economy (NME). This status allows special treatment within the WTO. The status was set for 15 years and has been disputed after 2016, the year when the 15 years had passed.[22]
When China joined the WTO, it agreed to considerably harsher conditions than other developing countries.[23][24] Furthermore, China had to deal with certain concerns linked totransparency andintellectual property that the accession to WTO underlined.[25][26] It comprehensively amended itsTrademark Law,Patent Law, andCopyright Law after it joined the World Trade Organization in 2001.[27]: 52
After its entry into the WTO in December 2001, China began pursuing export-led growth and became a key link in global supply chains.[28]: 235–236 Chinese businesses were encouraged to trade directly with foreign companies (instead of working throughstate-owned enterprises as previously), with the exception of certain state monopoly sectors deemed critical to national security.[29]: 39 After China's WTO admission, Chinese businesses had lower tariffs in foreign markets.[30]: 46
China's service sector was considerably liberalized and foreign investment was allowed; its restrictions on retail, wholesale and distribution ended.[31] Banking, financial services, insurance and telecommunications in China were also opened up to foreign investment.[32]
China's industrious and cheap labor also proved attractive to foreign investments.[28]: 235–236 China accumulated large trade surpluses andforeign currency reserves, which greatly increased government resources.[28]: 235–236
In the 2000s, China was the world's largest exporter of rare earths; it sought to restrict exports and these policies resulted in major disruption to global supply and significant price increases.[33]: 5 In response, the United States, European Union, and Japanbrought a case against China in the World Trade Organization in 2012.[33]: 5 They contended that China's export controls effectively subsidized downstream industries relying on rare earths (such as steel, photovoltaics, andsemi-conductors) by keeping inputs low.[33]: 5 The WTO ruled against China, determining that its export controls were not justifiable according to the exceptions that China had contended.[33]: 5 China complied with the ruling, which also prompted increased policy coordination by central ministries and provided the impetus for further domestic reform.[33]: 5
In 2007, the U.S. brought a WTO case against China challenging China's intellectual property laws.[27]: 21 This resulted in China's further amendment of domestic IP laws to comply with the WTO panel's decision.[27]: 21
In 2024, the WTO stated that there is an "overall lack of transparency" in the Chinese government's financial subsidies for key industrial sectors.[34][35][36]
On 24 September 2025, Chinese PremierLi Qiang announced that China will no longer request so-called Special and Differential Treatment (SDT) benefits, which arise from itsdeveloping country status, in WTO negotiations on future deals.[37]
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