A
Currently, economic activities in China remain controlled by a government that often makes its decisions based on the unpublished rules, and when the rules are published, they are often vague and unclear to the public and overseas businesses. Appeals are made all the more difficult with no public basis for the initial decisions. The WTO requirements of transparency and justice will help the Chinese state make arbitrary decisions over business activities and economic life.
B
By requiring the clear publication of quotas and tariff rates-by making them more transparent and public-the arbitrary discretion of local officials to determine whether and at what price a local enterprise can import a foreign product that might be an important input to goods or service will be taken away. In doing so, this agreement not only promotes economic efficiency for American exporters, but also undercuts arbitrary control and promotes the ability of local entrepreneurs to freely contract with foreign importers based not on party connections but on what makes economic sense. Economic freedom and economic efficiency gain at the same time.
C
The same is true for the free movement of goods. Currently, anybody who does business in China will view distribution as, at best, a headache. The Chinese government controls virtually all aspects of the movement of goods, whether goods can be imported at all, the terms under which it enters, who can bring it in, and who can distribute, sell and service it. Importing and exporting, and distribution rights are privileges granted by the Chinese government to only to a few.
D
China's WTO commitments in these areas are quite significant. The agreement changes these scarcely allotted privileges into rights that will be widely available to both Chinese and foreign businesses. China has agreed that in 3 years, all individuals and entities in China will be able to import most products into any part of China, and that foreign firms will be able to set up, own and operate their own distribution and related services. It will certainly help promote and enhance the economic activities and people throughout the world would enjoy the freedom of businesses.
E
Again, however, the benefits go beyond economic efficiency. Every time the multiple areas in which people must seek permission from the government for distribution or trading are reduced, the potential for a larger number of business transactions between Chinese entrepreneurs and American entrepreneurs is increased. As the weight of the government on everyday transactions becomes lighter, layers of middlemen are eliminated, and more and more Chinese salesmen, repairmen, and consumers will come into direct and daily contact with each other and with foreign companies.