REFLECTIONS ON CHINA'S ENTERING THE WTO
THE ADAPTATION OF ECONOMIC SYSTEM
There are several principles for the WTO, and the fundamental one is "free competition". The government, however, shoulder the risk for the state-owned enterprises, which would result in subsidies and preferential policies directly or indirectly. If it is detected, disputes are unavoidable.
The problem is whether others have recognized the socialist market economic system that we have basically established, and it is related to the judgment of dumping. Market economy and non-Market economy differentiate on the criteria. According to the GATT, in a market economy country, normal values are set according to the sale price in that country, while a non-market economy country set the price according to the price of the same goods in the "substituting country". If China is regarded as a non-market economy country, the importing country will compare it with the price of "substituting country", and if it is lower, it will be labeled as "dumping".
The integration of economics and finance is the trend of development. One issue worth discussing is whether national economy should be protected and developed? The answer is surely definite. But how?
Generally speaking, whether an enterprise belongs to the state-owned economy is judged by the control of assets and capital, the exploration of products, and the market share. According to the practice of international laws, national entrepreneurs are judged by nationality.
Whether national economy should be protected and developed should consider whether it is favorable for the growth of GDP, the improvement of technology and productivity, and comparative advantage in the world competition.
To protect and develop national economy does not mean the protection of backwardness. The national economy can only prosper through competition and development.
For the long run, our economy has been dependent on macro adjustment, which is essential and needs strengthening after entering the WTO. Inappropriate deal or simply control of the international competition is wrong. Inappropriate interference will have negative effects, even resulting in entanglement, thus disturbing the normal process of international trade.
TRANSPARENCY OF INFORMATION
The current society is a society of information. Most of the commercial banks abroad are stock companies and corporations limited liabilities. The "company law" requires the exploring of important information and fiscal situation. The state-owned commercial bank belongs to the government, but its main debtees are the general public, and its profit or lose should have something to do with shouldered by people as well as government. On the other hand, the reveal of information will improve the creditworthiness of the commercial banks. It does not mean that all kinds of information should be disclosed. It is the international norm and practice that some information should be kept secret. In this sense, one of the challenges for the financial industries after entering the WTO is how to reveal what information.
(by Zeng Kanglin)