Twenty years after China's accession to the WTO

A few years ago, I wrote an article titled "China's Property Market Died in 2022", which was deleted by the whole network.

In fact, what I wrote is that the era of real estate has completely ended, and China's economic transformation is urgent.

Delete it, delete it, today we will explain this problem from another perspective.

From the perspective of the underlying driving force and engine of economic development, we look at the past few decades of China's economy and the next step of transformation.

Today, China's economic development has gone through three stages:

The first stage is agriculture to feed industry

In the second stage, after China's accession to the WTO, it will participate in international value chain competition

The third stage, overtaking in curves, leads the global economy

The first two stages are the past tense, the third stage is the future tense; now we are in the middle of the second and third stages, which is the most difficult stage of China's economic transformation and climbing.

Whether the transformation is successful or not will affect the national fortunes of the next few decades.

1

The economic base determines the superstructure.

There is a discipline called political economy, and politics and economics have never been one is one and two is two, but one out of two and one out of two.

So, as a group of founders of the new era who came out of the mountains, how should we create an economic system after the establishment of the political system in New China?

On June 14, 1950, the second session of the first session of the National Committee of the Chinese People's Political Consultative Conference was held, and Liu Shaoqi said the following paragraph:

The basic purpose of land reform is not simply to relieve the poor peasants, but to liberate the rural productive forces from the feudal land ownership system of the landlord class, so as to develop agricultural production and open the way for the industrialization of new China.

It can be said that the hammer is finalized, laying the foundation for urban industry with vast rural agriculture and supporting industry with agriculture.

This is the second stage of land reform, from the victory of the revolution in fighting the local tycoons and dividing up the land, to the period of all-round construction of New China.

The final result is that during the entire period of land reform, a total of 700 million mu of land was expropriated and distributed to more than 300 million landless and landless peasants, and the peasants who obtained economic benefits accounted for about 60 to 70 percent of the agricultural population.

Before the land reform, the peasants cultivated these 700 million mu of land and handed over more than 30 million tons of grain to the landlords every year. After the land reform, these remnants have become the strongest foundation to support China's economic construction in New China.

From 1953 to 1986, the state implemented centralized purchasing and marketing of agricultural products. Through the scissor difference between the prices of urban industrial products and rural agricultural products, a large amount of agricultural surplus was drawn for industrial development.

Here, the scissors difference refers to the scissors gap formed by the scissors gap formed by the unequal exchange of industrial products and agricultural products, when the price of industrial products is higher than their value, and the price of agricultural products is lower than their value.

Before the reform and opening up and foreign trade, this was the most important form of Industrial Accumulation in China.

In the 45 years from 1952 to 1997, farmers provided a total of 1,264.1 billion yuan in funds for the country's industrialization in the form of scissors and scissors.

Then there is the army of cheap labor made up of migrant workers in the city, who do the most tiring work, but for a long time they get the most basic wages.

It is through the wage difference and the lack of mandatory social security that farmers have accumulated more than 11 trillion yuan for urban economic development.

Some people have calculated that through scissors difference + cheap labor + cheap land acquisition, in the 60 years after the founding of New China, rural farmers contributed a total value of 17.3 trillion yuan to China's industrial and urban construction.

In this world, there is no country, no country of a race, can be so hard-working, no dispute.

It was not until 2001 that this situation was completely changed because of WTO accession.

2

Turn the clock back 20 years.

On November 10, 2001, China officially joined the World Trade Organization.

Just four months ago, Beijing was designated as the venue for the 2008 Summer Olympics.

These two images of WTO accession and olympic bid 20 years ago have been engraved in the minds of many contemporary Chinese and have become profound collective memories.

The Beijing Olympics are seen by China as an excellent opportunity to show themselves, just as the 1964 Tokyo Olympics and the 1988 Seoul Olympics, the three culturally similar countries of the East will host the Olympic Games as a propaganda platform to announce the rise of the country.

Although it is not as dazzling as the fireworks at the opening ceremony of the Olympic Games, the changes that China's accession to the WTO have brought to the country and even the world are profound and extensive.

The WTO was formerly known as the General Agreement on Tariffs and Trade (GATT). When the People's Republic of China regained its seat in the United Nations General Assembly in 1971, Beijing could have acceded to the GATT logically under the GATT.

However, at that time, the mind was not emancipated enough, thinking that it was a club of rich countries, dominated by Western countries, and it was not good for us, so we decided not to join.

It was only this unconfident decision that made China take more than a decade to react. Fifteen years later, in 1986, China formally submitted an application to join the GaTT.

However, after a full 9 years, the road to recovery is still far away. At this time, the GATT had been upgraded and expanded to the World Trade Organization.

After that, China's entry into the customs also became its entry into the WTO, and this entry into the customs was another six years.

However, it was later encountered that 9/11 incident. The terrorist attack has allowed the United States to devote resources and energy to the Middle East and the pan-Islamic world, while shaking hands with potential strategic rival China. This has unexpectedly opened a window of opportunity for China.

In the 15th year after 1986, after 9/11, China and the biggest obstacle country, the United States, quickly completed all the procedures, and then the European Union was also successfully taken, and a protracted war suddenly succeeded in reaching the top.

After joining the WTO, Zhu Rongji vigorously carried out exchange rate reform in the public opinion, abolished the dual-track system of official exchange rate and market exchange rate mobilization, withdrew the black market in foreign exchange, depreciated the renminbi by a large margin, highlighted China's advantages in foreign trade, and pushed China to embark on the road of the world's factories by cheap labor.

Since then, China has officially caught the fast lane of the global economy and achieved results with explosive results.

In the past 20 years, China's GDP has increased by 8 times, becoming the world's second largest economy, accounting for 17.4% of the world economy from 4% in 2001 to 17.4% in 2020, and China's exports of goods have increased by more than 7 times, becoming the largest trade country in goods, ranking first among developing countries with foreign investment.

In addition to the data, there are several points that have the greatest impact on China:

The first is industrial accumulation.

From the very beginning of the steam age, to the power age, and then to the information age, the world's industrialization has undergone 300 years of development and renewal iteration before it has developed into modern times.

So, at this time, what are China's advantages? Is it in the global industrial chain and value chain, or a blank piece of paper.

However, China has great strategic depth. Whether it is the coastline, the population, the land, it is like a cake that has not been bitten.

This gives China a strong latecomer advantage.

When the West completely eliminated the low-end industries, China accepted it all and landed madly.

The result of this catch-up is that China eventually took more than 20 years to catch up with the industrial accumulation that the West took 300 years to achieve.

This has laid a solid foundation for China's manufacturing industry, and is also the foundation and cornerstone of china's economic transformation in the next step, intelligent manufacturing and digital economy.

This has even affected the world political landscape.

In the 20 years since China's accession to the WTO, China's steel production has accounted for 57% of the world's total output, while the United States has accounted for only 4%.

This eventually led to the birth of a large number of rust belt areas in the United States, and eventually to the political populization of low-income groups, and the rise of Trump.

So, after Trump took office, the first thing was to return manufacturing to China and fight a trade war with China to make the United States strong again.

The second is institutional rules.

Every rule of the WTO accession negotiations has had a profound impact on China's economic system.

It turned out that all of China's trade activities were monopolized by dozens of state-run state trading companies, and there must be quotas for imports and exports. However, joining the WTO means that everyone is on the same starting line and completely breaking the original monopoly.

In order to join the WTO, China has revised tens of thousands of articles that are inappropriate for the market economy and thoroughly innovated them conceptually, practically, and institutionally.

Joining the WTO has become a key move in China's reform and opening up.

After joining the World Trade Organization, market competition has been introduced in key areas of China's economy, and China's industrial structure has been greatly improved. Foreign investment, in particular, brings capital and technology, driving employment and economic growth.

These increases, in turn, can raise government taxes and household incomes and expenditures, as well as support technological innovation.

From a global perspective, China's accession to the WTO has enabled China to integrate more fully into the global economy and created China's important position in regional and global value chains.

The third is to strengthen the determination of reform and opening up.

There is no doubt that China is the biggest beneficiary of economic globalization and expanded opening up.

Today's world economic structure and trade structure are undergoing profound changes. One of the biggest shifts is that unilateralism and protectionism are rising sharply, and economic globalization is being challenged.

At this time, China has become a staunch supporter and defender of multilateral trade, while resolutely opposing unilateralism and protectionism.

Domestically, it not only opens up the whole of Hainan Island as a free trade port, adds the Pudong Free Trade Port, but also sets up dozens of free trade zones inland.

Internationally, actively participate in various regional free trade organizations. Just on January 1, 2022, RCEP was officially implemented.

It is the first regional free trade agreement led and promoted by China without U.S. participation, and the world's largest.

3

Today, China's economy has reached its third stage.

The global economy is currently at the end of the last long cycle of technology. Therefore, the global economy is in a zero-sum game of stock.

China's absorption and digestion of the existing industries and value chains under the leadership of Western science and technology has reached a stage of full saturation.

The current global economic situation, Liu He said very clearly in the "Comparative Study of the Two Global Crises".

The global economy is in dire need of a major technological revolution that will once again liberate productivity to a great extent.

Each technological revolution has had a profound and fundamental impact on social structure, geopolitics, and the balance of national power.

In the first technological revolution, Britain became the dominant player in the world economy; in the second technological revolution, the United States became the dominant player in the global economy.

At this moment, China is no longer a catch-up country, so it must complete the transformation of identity.

After joining the WTO, China's strategic opportunities were mainly manifested in overseas market expansion and international capital flows, and we seized the opportunity to become a global manufacturing center in one fell swoop.

The current opportunity lies in the global industrial transformation led by technology.

In the first 10 years of the 21st century, scientific and technological reserves have been nurturing new industrial changes and spawning a new round of long-term technological cycles. The historical experience of the rise and fall of great powers under the guidance of technological revolution tells us:

Only countries and enterprises that can take the lead in achieving structural adjustment and technological leapfrogging will win development opportunities and initiatives in the new round of long technological cycle.

The ancients said that everything should be planned and then moved, and under this framework, we can understand the great significance of going all out to rely on real estate, competing for technological innovation and industrial transformation.

Kissinger began his famous book "Great Diplomacy" by pointing out that every hundred years a new global power appears in the world. This judgment may be confirmed again.

It has been nearly 100 years since the rise of the United States in the Great Depression of 1929.

At present, it is the moment of the global power reshuffle, and it is also the key moment for China to climb the slope. Whether you are optimistic about all this or not, respect the efforts of the participants.

There can never be a utopia in this world, and governing and being governed by people is the only two existential relations, which is the true meaning of global competition.

This is a harbinger of what kind of environment our children and grandchildren will live in. Is it to be sniffled everywhere, to be harvested everywhere, or to be in your sleep and the whole world is creating GDP for you.

All the keys are in this fight!