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China's WTO Entry: Effects on Its Economy and Implications for the Philippines

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  • Palanca, Ellen

Abstract

This paper investigates the implications of China’s accession to the World Trade Organization in December of 2001 for the Philippines based on an analysis of Philippines-China bilateral trade structure, a presentation of the commitments made by China for its WTO accession, and a discussion of this significant event on China’s own economy. The main commitments of China to WTO are market liberalization and the rule of law consistent with the legal framework of WTO. In the long run, China’s competitiveness will increase and its economic growth will experience another surge. For the Philippines, the positive impact of such developments includes: greater market opportunities for merchandise and service trade, greater foreign direct investment flows to and from China, and better protection for Philippine business interests and professionals in China. However, reduction of trade barriers for China and the rise in its competitiveness imply that the Philippines will find it increasingly difficult to compete with China particularly in third-country markets. Moreover, China’s rosy economy also makes competition for foreign direct investments difficult for the Philippines. This study includes recommendations for the Philippines so as to maximize the benefits from the available opportunities and minimize the negative impact of the unavoidable challenges.

Suggested Citation

  • Palanca, Ellen, 2004. "China's WTO Entry: Effects on Its Economy and Implications for the Philippines," Discussion Papers DP 2004-41, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:dpaper:dp_2004-41
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    File URL: https://www.pids.gov.ph/publication/discussion-papers/china-s-wto-entry-effects-on-its-economy-and-implications-for-the-philippines
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    References listed on IDEAS

    as
    1. Austria, Myrna S., 1998. "The Emerging Philippine Investment Environment," Discussion Papers DP 1998-27, Philippine Institute for Development Studies.
    2. Mr. Harm Zebregs & Ms. Wanda S Tseng, 2002. "Foreign Direct Investment in China: Some Lessons for Other Countries," IMF Policy Discussion Papers 2002/003, International Monetary Fund.
    3. Gerald Epstein & Elissa Braunstein, 2002. "Bargaining Power and Foreign Direct Investment in China: Can 1.3 Billion Consumers Tame the Multinationals?," Working Papers wp45, Political Economy Research Institute, University of Massachusetts at Amherst.
    4. Austria, Myrna S., 1998. "The Emerging Philippine Investment Environment," Philippine Journal of Development JPD 1998 Vol. XXV No. 1-b, Philippine Institute for Development Studies.
    5. Unknown, 2002. "Letters to the Editor," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 17(4), pages 1-1.
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    Cited by:

    1. Lazaro, Dorothea C. & Wignaraja, Ganeshan & De Guzman, Genevieve, 2011. "Factors Affecting Use or Nonuse of Free Trade Agreements in the Philippines," Philippine Journal of Development PJD 2009 Vol. XXXVI No. 2, Philippine Institute for Development Studies.
    2. Wignaraja, Ganeshan & Lazaro, Dorothea & DeGuzman, Genevieve, 2010. "FTAs and Philippine Business: Evidence from Transport, Food, and Electronics Firms," ADBI Working Papers 185, Asian Development Bank Institute.

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