China has an Anti-dumping policy and with international trade plus having a market economy this policy can cause problems for industries like textile etc. The deregulation of banks has increased the number of local banks but foreign banks will have the ability to provide larger amounts of loan, hence spoiling the market for the domestic banks. This might accelerate liquidity issues unless some regulations are imposed to restrict short term foreign capital entering the companies and especially the state-owned enterprises. The finicial system inChinais not very strong and WTO reforms require effective monetary polices that the Chinese economy does not have the capability to implement, therefore, given the WTO China has to be careful in applying the reforms.
WTO has increased Chinese exports to foreign countries andChina’s increase in trade will result in suppression of exports from other developing nations likeMalaysia,IndonesiaandThailand(Yang, 2003; IMF, 2004). The increase in exports fromChinahas had particular effect on Asian countries and specifically the ASEAN-5 (Indonesia, Malaysia, Phillipines, Singapore and Thailand). But competition fromChinais mainly on the international front which proves that no threat exists from Chinese exports to ASEAN-5, therefore, they can in fact realize opportunities and benefit fromChina’s entry in the WTO (Liu & Luo, 2004). Chinese exports have negative total effect on Bangladesh, Pakistan, Malaysia and Cambodia, since these countries trade in consumer goods mainly so it’s the other countries likeKorea,Japan and Singapore that might benefit from China’s increasing contribution in the world trade after accession to WTO.China’s increasing exports have a negative effect on some countries whereas, they might benefit some countries in Asia.China’s increased trade after WTO has affected USA and also Mexico’s privileged position that it enjoyed over theUSmarket after NAFTA happened (Liu & Luo, 2004).
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