USCBC Senior Vice President, Erin Ennis, testifies at this year's TPSC hearing on China's implementation of its WTO commitments.

China's Implementation of its World Trade Organization Commitments
Oral Statement of
Erin Ennis
Senior Vice President
US-China Business Council
Trade Policy Staff Committee hearing on
China's Compliance with WTO Commitments
September 21, 2016
China’s impact on the US and global economies 

Fifteen years after China joined the World Trade Organization (WTO), the global economy is very different. As part of its accession agreement, China’s import tariffs were lowered from an average 14 percent to 6.5 percent. China agreed to open some— but not all— of its economy to foreign participation. The agreement also changed the way most American companies were able to do business in China, such as allowing companies to distribute and service their own products in China.

There is a logical question that should be considered in this year’s assessment of China’s WTO implementation: is the world— and in particular, the American— economy better off since China’s entry into the WTO 15 years ago? There are a few ways to assess an answer. In 2000, the year prior to China’s accession, China’s gross domestic product was approximately $1.2 trillion, ranking it as the fifth-largest economy in the world. Fifteen years later, China’s GDP is roughly $11 trillion, making it second only to the United States. China has lifted more than 800 million people out of poverty as a result of its market reforms; and its thriving middle class not only benefits from the job creation facilitated through new investment, but also drives global demand for goods and services.  

By the US-China Business Council’s (USCBC) calculations, China was a less than $50 billion market for American companies in 2000, adding up US exports and sales by US affiliates in China, and eliminating overlaps. It is now at least a $400 billion market, putting it on par with Mexico as America’s second-largest overseas market, behind only Canada. The US economy has also grown dramatically during that period, even when taking into account the global recession in 2009.  

The bilateral trade deficit has also grown since China’s accession, from $83 billion in 2000 to $366 billion last year. However, focusing on just the bilateral trade balance misses an important change in the pattern of trade. The East Asia (including China) share of the US global trade deficit was 67 percent in 2015; it was about the same— 68 percent— 20 years ago, before China’s WTO entry. After China entered the WTO, suppliers from Japan, Korea, Taiwan, Hong Kong, and other economies moved their export manufacturing to China, and shifted our longstanding bilateral trade deficits with those economies to China as well. China’s proportion of the US global trade deficit has increased, while the rest of East Asia’s proportion has decreased.


Read the full testimony here.

Click here for a PDF of the written submission filed with USTR.