That threat comes with embedded risks like a major economic decline,
job losses and stunted growth in all countries, which could hit the
world's poorest the hardest, senior Chinese officials said.
Hence, certain reforms are needed to defend the vital role of the WTO and the multilateral trading system, they said.
A global wave of restrictive measures like higher tariffs and
stricter customs regulations has been threatening to drown international
The latest WTO report indicates that from last October to this May,
trade restriction measures across the globe, including tariff and
stricter customs regulation, increased, impacting a total trade volume
of about $84.5 billion.
Roberto Azevedo, director-general of the WTO, said increasing trade
restrictions may become a new normal for global trade in the near
That would threaten the global economic recovery and hurt growth as well as job creation, he said.
He further said the WTO will engage more with leaders of major world
economies and provide, if asked, consultations within the WTO framework
Eager to improve its standing and effectiveness, the WTO has struck
major deals like the Trade Facilitation Agreement, the abolition of
agricultural export subsidies and the expansion of the Information
Technology Agreement in recent years.
"This work must continue - and indeed discussions are continuing on a
range of issues which are vital for growth and development in today's
economy," said Azevedo.
Even though conversations on the WTO reforms are already underway
among world leaders and some have been floating ideas, consensus has
been elusive. There is no clarity yet on where such discussions should
lead and what areas may be more promising or more necessary to address,
according to Azevedo.
Experts said the world's march toward full globalization has been
slow after the Doha Round of World Trade Talks, which were ended by the
WTO's General Council in 2006 because of a number disagreements on
issues like trade in agricultural products.
Regional and bilateral free trade agreements were being signed one
after another by both developed and developing economies. Observers
believe such agreements may weaken the WTO's power.
"Whatever the answers may be, there's no doubt that we need to
redouble all our efforts to ensure the global trading system is more
responsive both to the members' needs and to the challenges of a
changing global economy," Azevedo said.
Researcher Mei said an increasingly inward-looking economic approach
adopted by the US may not blunt China's competitive edge in global trade
and the world economy.
But the unfavorable developments will make it more difficult for many
developing and less-developed countries to emulate China's export-led
economic growth model to expedite their own economic development.
Wang Shouwen, China's vice-commerce minister, said under such
circumstances, China will continue to support WTO reform, and hope any
such reform would address the concerns of most members and reflect their
"China hopes that the primary purpose of the WTO should not be
changed and its fundamental principle not challenged through gradual
reform," said Wang.
At the same time, China's Ministry of Commerce said WTO reform should
strengthen the latter's authoritativeness and leadership, and
consolidate the basic functions and role of the free trade principle and
multilateral trading system, to better promote global free trade and
"We should always stick to the overall framework of the multilateral
trading system and uphold multilateral trade order," said the ministry's
spokesperson Gao Feng, adding free trade arrangements among WTO members
are a helpful supplement and a positive driving force for the
multilateral trading system.
Though China could rely on its own resources alone to advance its
industrialization, it is still willing to seize development
opportunities overseas and share its experiences and economic gains with
its trading partners via imports and foreign direct investment, said
"Because the country knows its biggest contribution to the world
would be doing a good job at home and ensuring stable and sustainable
economic development, China will hope that its goodwill wins fairer
treatment for its personnel, goods and capital abroad," Mei said.
No WTO member has suffered economically due to China's participation
since 2001. On the contrary, all of China's trading partners at various
developmental stages have benefitted greatly. China has also become a
major trading partner of more than 120 countries and regions, he said.
For example, US exports to China surged from $26 billion in 2001 to
nearly $150 billion in 2017. China thus became the third-largest market
for US exports, up from No 11 in 2001, according to commerce ministry
China has also strengthened its legal system and law enforcement to protect intellectual property.
In recent years, it has revised the trademark law, and strengthened
it by introducing a punitive compensation system, while revising the
Anti-Unfair Competition Law and expediting the process for revising the
Patent Law and Copyright Law.
It has re-established the National Intellectual Property Bureau, too,
and emphasized that the judicial system will play the leading role in
intellectual property protection.
Toward that end, it has established three intellectual property
courts in Beijing, Shanghai and Guangzhou, while cracking down on online
piracy to protect patent rights.
Since 2001, the royalties China had paid for using foreign patents
increased on average 17 percent a year to reach $28.6 billion in 2017.
A number of foreign business leaders agreed that China, the world's
largest consumer market, offers enormous opportunities to global trading
partners under the WTO framework.
Denis Depoux, who heads the China unit of German consulting company
Roland Berger, said China has benefitted significantly from the WTO
rules. Having been the world's factory, China is now starting an
influential trend by growing its domestic market, upgrading the quality
of its products and services, and enhancing environmental requirements
in its manufacturing and industrial sectors.
"More opportunities, including a level playing field for global
companies, are arising in China for those who can adapt to this new
trend. Outbound Chinese investments, although selectively authorized in
the past, will also transform the country's economic influence," said
George Xu, CEO of the China unit of French aircraft-maker Airbus,
said there will be huge growth potential in China's civil aviation
market in the next decade.
"In recent years, outbound tourism has grown rapidly, but only about
10 percent of people in China hold passports. If that number grows to 20
or 30 percent, it will be a massive market, and we can foresee that the
market will grow robustly," he said.
China is the largest market for Airbus that has seen its highest
growth rate in the country. It delivers about one-fourth of its planes
to the Chinese market every year.
"Twenty years ago, most multinational companies simply wanted to
manufacture in China, but the nature of demand is very different now.
They are seeing China as an end market. That means they need to change
dramatically," said Bill Winters, group CEO of Standard Chartered Bank.
Amid growing concerns over isolationism and protectionism, German
chemical giant BASF announced in July that it will invest $10 billion to
build a chemical production site in South China's Guangdong province.
This would be BASF's largest investment project ever. The investment is
estimated to reach up to $10 billion by the project's completion around
By then, the WTO regime will have been strengthened on the back of
China-led efforts, and Guangdong and many other cities across the world
should be able to emulate Port Elizabeth, to emerge as shining symbols
of an efficient, just and equitable global trade system, experts said.