17-3 |
The meaning of China's entry into the WTO: A U.S. perspective |
S. T. SONKA, Dept. of Agricultural & Consumer Economics, Univ. of Illinois, 170 Environmental & Agricultural Sciences Bldg., 1101 W. Peabody Dr., MC-635, Urbana, IL 61801-4723 For us in the food sector, the prospect of the world’s most populous country entering into a regime that fosters expanded trade has to be exciting. Clearly there are numerous uncertainties as to the speed and extent to which this entry actually occurs. Further, those implications include political and other factors that extend well beyond the food sector. However, decision makers and firms in the food and agribusiness sector cannot ignore an event that has potentially momentous consequences. A framework for evaluation of these potentials is provided in this paper. That framework will examine the potential for future business interactions along four dimensions; commodities, products, technology, and direct investment. Within agriculture, there is a tendency to frame expectations primarily in terms of exports and imports of commodities. However, doing so limits our perspectives of potential effects. A growing middle class and the concentration of that population segment in urban areas, especially along the seacoast, suggests greater opportunities for import and export of finished product. For agribusiness firms, technology transfer to the vast Chinese agricultural economy also has promise. For both products and technology, maintenance of intellectual property and capturing value created are significant issues that will be significantly affected by the actual implementation of WTO procedures. One approach to responding to these issues is direct investment of US food and agribusiness firms into China. Although necessarily speculative and prospective, this paper will explore the potentials for US firms and managers as China moves into the WTO and implements procedures that are accepted in that framework.
Session 17, Business opportunity in post-China WTO: Part 1: Current status and perspectives
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