International Trade
...greater cultural interactions with the West, Chinese will become more familiar with Western ideas (mainly U.S) and values. Western emphasis on competition and freedom will be extolled, particularly by Chinese intellectuals, entrepreneurs and students, who are at the front of change. But it should be challenge the traditional Chinese political image, and could make some unstable elements for political condition and society. 2. Ideas held by the WTO, such as the free market economy and minimisation of government interference, will help boost China's progress towards a “limited government”. They will also deal the remnants of the Planned Economy and the government system propping it up a final blow. As Chinese become used to a “limited government” in the economic sphere, the demand will soon extend to the political arena where a “limited government” is equally desirable. 3. The WTO also requires “transparency” in areas like government administration and the judiciary. The pressure the Chinese government gets from the WTO and the measures it adopts to make its policy more transparent will hopefully help it identify gradually with the principle of “openness”, which should extend from economic to political decisions. The need for a transparent and fair legal system will compel China to quicken the reform of its judiciary. This will help promote an independent and transparent judiciary which will have a more effective role keeping an eye on the government. A prerequisite of legal reform is separation of the government and the judiciary. 4. Chinese enterprises owned by the state and private individuals and foreign businesses will now being treated equally. This will stimulate the growth of private Chinese businesses. The growth of the private sector will boost the power of the community. Society's ability to act as a check on the government will increase and there will also give many opportunities for a civil society to evolve. All these are no doubt conducive to democratisation. But foreign business will lose some trade privilege in China. That is what U.S companies should attention. (www.zaobao.com) Even though China's ascension to the WTO is not without domestic political risks, Beijing seems confident that it has everything firmly under its thumb. Given its means of control, it is unlikely to allow the political impact of its WTO entry to lead to chaos. Political risks for China (People’s Republic China) are not only above points (internal), but also have an important external point is the problem of Taiwan (Republic of China). The external relations issue that westerners view as most important to China - Taiwan - is considered to be a matter of domestic politics for the Chinese. The China considers Taiwan to be an integral part of China's territory even though it has effectively functioned as a country since the nationalist government (KMT) fled in the mainland and set up shop there in the aftermath of the Communist revolution of 1949. According to many foreign and Chinese analysts this issue is so vital to the national psyche that it is the one thing that could trump rising living standards and economic growth as national priority number one. No China (mainland) leader wants to be known as the "man that lost Taiwan". The mainland China exerts military pressure on Taiwan but this is balanced by a strong Taiwanese military, U.S. military aid and weapons sales to Taiwan and the tacit understanding that the U.S. would come to Taiwan's aid if it were to be invaded by the mainland China. Furthermore, the consensus among China watchers is that the mainland China would only take aggressive action in the event of a Taiwanese declaration of independence. That causes Taiwan Channel being the most unstable element for China- U.S relation. Economic Risk: A Risk for China- U.S textiles trade The U.S. textile industry lost 8,900 jobs in July – the third highest monthly total. As imports of subsidized textile and apparel products from China hit new records. And this job loss figure does not even include the nearly 6,500 jobs that will soon be lost as a result of the announcement last week. When combined with the loss of 9,300 apparel jobs in July, this means the U.S. textile and apparel sector lost 18,200 jobs last month, accounting for fully one quarter of all manufacturing job losses in the United States. U.S. manufacturing job losses in July totalled 71,000 (www.atmi.org). That causes U.S government limit textile import from China. The U.S government planning to restrict and impose quotas on knit fabrics, brassieres and dressing gowns from China. A result of this action is making China retaliate (More detail see appendix). Social Risk for China and China Textiles Export Corruption is being the biggest social problem in China’s society. Public corruption is entrenched at all levels of government and throughout the bureaucracy. Offences run the full gamut from "facilitation payments" to secure permits or utility service to multi-billion dollar embezzlement schemes. China received a score of 3.5 out of 10 (1 being very corrupt, 10 being least corrupt) on the Transparency International Corruption Perceptions Index giving it a rank of 59 of the 102 countries included in the study (1 is best, 102 is worst). Corruption is one of the major causes of public discontent and foreigners' perception of China as one of the world's more corrupt countries is a barrier to the country reaching its economic potential. Governments at a number of levels have, for a number of years, conducted anti-corruption drives. Penalties are including execution, but the list of people actually punished is quite small. Notably, very few top government officials have been prosecuted. There are early indications that the new leadership team intends to take...