China and the WTC – a real game changer

Book review: China, Trade and Power Allowing China into the World Trade Organisation was an attempt to bind it to the rule of law and give US exporters access to its markets. That plan has failed, says Stewart Paterson.

924-books-China-Trade-Power

Buy on Amazon

What was the most important event of the past two decades? Some might say 9/11; others the financial crisis of 2008-09. Stewart Paterson argues the real game-changer was China's accession to the World Trade Organisation in 2001. That was sold as an attempt to bind China to the rule of law and allow US exporters to gain access to Chinese markets. If those were the goals, then the move has failed, says Paterson.

Indeed, by allowing China to develop using a mixture of mercantilism and state capitalism, China's WTO accession probably slowed the pace of genuine political and economic change. Meanwhile, Chinese imports destroyed manufacturing in the developed world, increased income inequality and unbalanced the global financial system.

To solve these problems, the developed world needs to put pressure on China to raise consumption, open itself up and engage in genuine political reform.Its trade war with the US might not be a bad thing if it forces China to make these changes.

This is a short book and there are times when a bit more detail would have been useful. The author also at times overstates his case. Still, he's surely right that China has been taking unfair advantage of the world trading system and that its authoritarianism and state direction of the economy are no models to follow.

Recommended

Disasters, bunkers and financial collapse: a little not-so-light holiday reading
Books

Disasters, bunkers and financial collapse: a little not-so-light holiday reading

Merryn Somerset Webb picks a selection of books for you to dive into wherever you are holidaying this summer.
3 Aug 2021
My must-read of 2020: a page-turning biography of Keynes
Investment strategy

My must-read of 2020: a page-turning biography of Keynes

John Stepek recommends some of his favourite financial books for you to read as lockdowns continue, including a surprisingly gripping biography of the…
31 Dec 2020
Five books to put on your Christmas list
Investment strategy

Five books to put on your Christmas list

Even if they’ve done nothing else, lockdowns – in whatever guise – have given us plenty of time to read. Merryn Somerset Webb picks five books to enjo…
7 Dec 2020

Most Popular

A nightmare 1970s scenario for investors is edging closer
Investment strategy

A nightmare 1970s scenario for investors is edging closer

Inflation need not be a worry unless it is driven by labour market shortages. Unfortunately, writes macroeconomist Philip Pilkington, that’s exactly w…
17 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021