The Impacts of China's Accession to the WTO on the exports of Asia Pacific economies

Abstract

China's entry into the WTO will dramatically change its trading partners, especially in regard to the developing countries. In the short run, developing countries will be able to improve their trade balance with China, as China accelerates its market-opening. The assessment of export opportunities for AP developing economies, based on the current levels of market shares, indicates that East Asian countries like Korea and Taiwan will benefits the most from the liberalization of the Chinese market, while benefits are limited for South Asian economies. China's accession to the WTO also poses a major challenge to some AP developing economies in other parts of export markets for textile and apparel. The market shares of AP developing economies protected by the Quota will be open to competition from China with the phase out of the MFA by 2005. Particularly, the less developed South-east Asian economies demonstrated impressive competitiveness in their textile exports. Nevertheless, South Asian economies are heavily dependent on growth of demand, indicating that increased competition in the world textile and clothing market with the phase-out of the MFA would lead to AP region-wide reorganization of textile production activities.