New frontier of economic globalization The significance of China's accession to WTO

摘要

The rationale of economic globalization is firmly rooted in the mutually beneficial gains that international trade promises. International trade and division of labor among nations open an unlimited horizon for individuals and nations in their pursuit of enhanced welfare. Globalization driven by people's and nations' self-interests can be interrupted, as it was by the two world wars, but can never be stopped. As long as the enormous benefits that the theory of comparative advantage and increasing returns to scale predict are yet to be exhausted, the drive to deepen globalization will not cease. Nevertheless, globalization does not benefit every nation equally and automatically. It takes vision and foresight to see the fundamental trend of this unfolding process. It also requires courage to open one's door to unfamiliar people, exotic cultures and foreign competition. Most of all, it demands hard work and wisdom to find flexible institutions to adapt to this precarious historical process socially and institutionally before a nation can benefit from it.The probability that the current round of economic globalization will succeed is much higher than before. This is the first time that almost all nations, especially the major powers, finally agree that the world should be integrated through free trade and market competition. In earlier rounds of globalization, at least one power was opposed to being integrated. Before 1840, almost all East Asian nations followed a sakoku policy (locking one's country up policy). Meanwhile, the fierce military rivalry among some European powers for dominance of world often interrupted globalization. During the period of the cold war, Russia and China openly challenged the idea of globalization through free trade and market competition. Fortunately, the cold war ended when China decided to open up and to adopt market mechanisms, and the Soviet bloc collapsed. The triumph of the nations who have been advocating free trade and free market not only demonstrates to the world the correctness of the free trade theory, but also the highest living standards and most dynamic and democratic societies.