Introduction

China's transition from a statist to market economy over the past 15 years and its successful establishment of globally competitive industry are unprecedented historical events. Although China's entry into the WTO is not responsible for that transformation, it has played an important role. Accession to the WTO was used by the government as a means not only to stabilize access to foreign markets and increase the attractiveness of China to foreign investors but also to reorient internal policies in a way that deemphasized a profound shift in government attitudes.

One of the main reasons why the Organization for Economic Cooperation and Development (OECD) encouraged China's entry into the WTO was to enhance China's external economic linkages, thereby moderating its potential political-military adventurism. So far, the premise that a China highly integrated into the global economy would encourage moderate Chinese political policies appears to have been a sound one. And, so far, informed predictions that China would act as a responsible Member of the WTO, as it has acted as a member in other international organizations, such as the United Nations and IMF, have also proven sound.

However, the law of unintended consequences is always at work, and the rate of China's growth and success in world markets may have been unanticipated. Developing countries that for many years had pressed in the WTO for an agreement to eliminate textile quotas found themselves seeking to re-impose restrictions in the face of highly efficient Chinese producers. China is absorbing a large and increasing share of the world's natural resources, including oil and minerals, and Chinese demand is adding to global price and availability pressures.