China needs to rethink its trade policy
- By Zhang Lijuan
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E-mail China.org.cn, April 26, 2011
China's foreign trade has surged rapidly over the past few decades, and most Chinese agree that this increased trade has created jobs. However, the vigorous export trade has severely harmed the welfare of the Chinese people. Workers in "Made in China" factories are not treated fairly in terms of wages, health insurance and working conditions. In addition, China has also paid a huge environmental price for its industrial development. It will take generations to resolve these complex and far-reaching issues.
Chinese consumers are also questioning the fairness and equity of our trade regime. China has indeed made great contributions to the world through exporting "Made in China" products, as these exports have been of better quality at cheaper prices than was otherwise available. However, an interesting and disturbing phenomenon is that these "Made in China" products sell at higher prices in China compared to countries like the US. Similarly, international brands, especially luxury goods, command much higher prices in China compared to Western countries.
Trade is, by nature, political. China's future trade policies should serve China's national strategic interests within the WTO multilateral regime. Such policies must be multilateral as well as regional in origin. Meanwhile, China must accelerate its economic transformation through structural diversification and expansion of domestic demand. New policies must address business concerns and improve the profitability of Chinese enterprises.
Trade expansion is important, but should not be the sole aim of Chinese firms. With the all but certain appreciation of the yuan, globalization of Chinese enterprises will not continue to bear fruit until the government initiates and takes actions to manage a national strategic trade policy. An effective trade policy will help China build a strong reputation in the world market as well as serve China's national strategic interests.
The author is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/node_7075405.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn
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