Former Chinese Premier Zhu Rongji recently passed away. Attention has once again turned to one of the most consequential legacies he left to China and the world—his leading role in bringing China into the World Trade Organization (WTO).
At the time, the move was widely seen as a high-stakes gamble to use greater openness to force domestic reform. It rapidly integrated China into the global market and, over the following two decades, helped turn the country into the world’s manufacturing center. Vast supply chains shifted toward China, “Made in China” products spread across the globe, and the structure of world trade was profoundly transformed.
But there was another side to the story. As China’s economy expanded dramatically, the state-capitalist model dominated by the Chinese Communist Party did not gradually become more market-oriented and transparent, as some Western policymakers had expected. Instead, state-owned enterprises, government subsidies, industrial policy, and deep state intervention in the economy increasingly became central sources of trade friction between China and the West.
Looking back 25 years later, Zhu Rongji’s gamble not only changed China. It also forced the West to reconsider a fundamental question: Can the WTO’s original rules effectively constrain a massive non-market economy in which the CCP regime intervenes deeply?
Zhu Rongji Led China’s WTO Negotiations
In the late 1990s, China’s economic reforms were under multiple pressures, including losses at state-owned enterprises, problems in the financial system, and a worsening external environment.
Zhu Rongji personally led the final stage of negotiations for China’s accession to the WTO and played an especially important role in negotiations with the United States. In exchange for access to global markets, the CCP pledged to substantially reduce tariffs, open parts of its domestic market, revise relevant laws and regulations, and accept the WTO’s multilateral trade rules.
On December 11, 2001, China officially joined the WTO as its 143rd member, ending 15 years of accession negotiations.
At the time, the United States believed that admitting China could encourage political reform. More than two decades later, however, China has not moved in the direction Western policymakers had expected—toward political liberalization and more thorough market reform. Instead, it has been struggling with a property crisis, youth unemployment, and weak domestic demand.
China Rapidly Became the “World’s Factory”
After joining the WTO, China’s integration into the global economy accelerated dramatically. It quickly became a global manufacturing center, with “Made in China” products reaching nearly every corner of the world.
In 2021, the 20th anniversary of China’s WTO accession prompted widespread discussion over whether China’s entry had ultimately undermined the WTO.
In a retrospective marking the 20th anniversary, Voice of America noted that over those two decades, China became deeply integrated into the global economy and emerged as the “world’s factory,” while also reshaping the global trade system and the geopolitical landscape.
The figures illustrate the scale of that transformation.
Between 2001 and 2020, China’s exports increased from $266.1 billion to $2.59 trillion, an increase of about 8.7 times. In 2020, China’s GDP reached approximately $14.72 trillion, accounting for 17.4 percent of the global economy.
Large numbers of multinational corporations entered China, while China gained access to capital, technology, orders, and global supply chains. Huge export-oriented manufacturing clusters rapidly developed along the country’s coastal regions.
Clothing, footwear, toys, furniture, household appliances, electronics, and all kinds of industrial components increasingly carried the “Made in China” label. China’s enormous supply of low-cost labor reduced the production costs of many industrial goods, while vast quantities of inexpensive manufactured products entered global markets.
China gradually became the world-renowned “factory of the world.”
But the benefits of globalization were not distributed evenly.
The “China Shock”: The Price Paid by American Workers
The other side of China’s rise as the “world’s factory” was the enormous pressure placed on manufacturing industries and workers in some developed countries.
As Chinese goods flooded the U.S. market, manufacturing sectors exposed to import competition experienced factory closures, job losses, lower wages, and declining labor-force participation.
Research by economists Daron Acemoglu, David Autor, David Dorn, Gordon Hanson, Brendan Price, and others found that between 1999 and 2011, import competition from China caused an estimated net loss of around 2 million to 2.4 million U.S. jobs. The research also estimated that Chinese import competition accounted for roughly 10 percent of the decline in U.S. manufacturing employment during that period.
The phenomenon later became known as the “China Shock.”
For consumers and multinational corporations, globalization brought lower costs and access to larger markets. But for workers and communities in some traditional industrial regions, it meant factory closures, job losses, and long-term economic and social pain.
A deeper issue was that some Western policymakers had expected China’s integration into the global economy to push the country further toward marketization and greater openness.
More than two decades later, that expectation has not fully materialized.
China became deeply integrated into global markets, but the role of the state—the CCP regime—in the economy did not diminish. On the contrary, as China’s economic scale expanded rapidly, state-owned enterprises, government industrial policies, subsidies, and other forms of state involvement continued to play major roles in the economic system.
Voice of America once cited Alexander Hitch, a trade and economics fellow at the Chicago Council on Global Affairs, as saying that more than 20 years ago, the United States and other Western countries did not anticipate that a “non-market economy” like China’s could grow to such an enormous size within the WTO framework.
The CCP Does Not Follow WTO Rules
In recent years, the United States and other Western countries have increasingly criticized China over state-owned enterprises, government subsidies, market access, and certain technology-transfer policies, arguing that the WTO’s existing rules are not sufficient to fully address these issues.
As a result, 20 years after China joined the WTO, a question began to be debated again in the United States: Was allowing China to join the WTO a mistake?
Voice of America reported that the United States and other major Western countries believe China failed to fully honor some of its WTO accession commitments. At the same time, China’s rapid economic expansion has also created new challenges for the WTO’s original rules.
Meanwhile, the United States and Europe have increasingly turned to national-security measures, export controls, investment screening, tariffs, and “de-risking” policies in an effort to reduce their dependence on Chinese supply chains.
From the “World’s Factory” to a “Global Risk”
This year marks the 25th anniversary of China’s accession to the WTO.
On May 13, organizations including Taiwan Public Policy, Taiwan Thinktank, the Taiwan Association of University Professors, the Taiwan Youth Generation Exchange Association, Taiwan Youth Foundation, Radio Taiwan International, Newtalk, Taiwan Civil Rights Alliance, Taiwan Inspirational Association, and US Taiwan Watch jointly held a Y’s Day “Wednesday Youth Day” forum titled “From the ‘World’s Factory’ to a ‘Global Risk’: How Changes in China’s Economy Are Shaping the World’s Future.”
The forum examined the spillover effects of China’s economy on Taiwan and the rest of the world.
At the event, Tsai Ming-fang, a professor in the Department of Economics at Tamkang University in Taiwan, said that China had once been the “world’s factory” and the largest source of U.S. imports. However, after the United States imposed additional tariffs on China in 2018 and the COVID-19 pandemic erupted, China’s economy gradually declined.
From 2018 to 2024, he said, China’s exports to the United States fell by more than $100 billion, contributing to problems of “insufficient effective demand” and “overproduction.”
China then shifted toward low-price dumping into markets around the world, with Europe among the first to bear the impact. The European Union had attempted to impose anti-dumping tariffs on China, but later backed away and instead adopted price floors.
Wang Kuo-chen, an associate research fellow at the First Research Division of the Chung-Hua Institution for Economic Research, said bluntly that China continues to export its excess capacity. In 2025, China recorded an unprecedented trade surplus of $1.2 trillion, while exports continued to grow at a double-digit pace in the first quarter of this year.
He said China’s economic and trade coercion has become increasingly “giant-baby-like,” with foreign sanctions expanding in scope. China has also used measures such as its “Foreign Investment Security Review Measures” and “blocking rules” to obstruct foreign investment and punish foreign companies.
This has also given rise to the issue of internationalizing the renminbi as a means of circumventing international sanctions, he said, further turning it into a financial support system for criminals and countries belonging to the “axis of evil,” creating even greater disruption to the global economic and trade order.
Zhu Rongji’s “high-stakes gamble” ultimately changed the West’s understanding of China—and of the CCP. It also forced the world to confront a larger question:
When a country can use globalization to strengthen itself without simultaneously undergoing the institutional transformation the West expected, how long can the existing rules of globalization continue to function?
Translated into English from the Chinese-language article at
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