(Editor's Note: This is a comment on an article by another author in Chinese.)

The drift of this gentleman’s complaint is that there are many factors involved in the question of withdrawing from the WTO.  His main point is that the WTO is necessary to China’s foreign trade.  And since China’s foreign trade account for some 80% of China’s GDP, then obviously if China withdrew from the WTO then its foreign trade will as a consequence collapse and China would suffer serious economic turmoil.   But I would say that it is this gentleman who has not seen nor understand the many factors that truly impact on China’s continued membership of the WTO.  Before the question of whether China should withdraw from the WTO, a bigger or more fundamental question must first be answered.  This is what is the purpose of China’s foreign trade and foreign direct investment (FDI)?  And before the question of what is the purpose of China’s foreign trade and FDI can be answered, we must first ask an even more fundamental question, which is what is the purpose of China’s economic policies?
 
China’s economic policies must be to increase the standard of living of the Chinese people.  In order to raise the standard of living of the Chinese people, the productivity of goods and services of the Chinese people must be increased through the mechanization and automation based on the advancement of technologies.  To produce more goods and services it will require technologies, energy, and raw materials.  Capital is only money and the government can initially create it in infinite amount, therefore we can disregard capital. 
 
Therefore, it should be obvious that China does not need foreign trade if it can develop its own technologies and has all the energy and raw materials it needs.  Only if China cannot develop its own technologies or does not have the energy or the raw materials, then and only then must it do foreign trade to obtain those things it does not have.  But since China has the largest pool of genius level people in the world, it is obvious that given the proper education and the research and development or R&D facilities, China could develop all the high technologies in the world.  With the advanced technologies, China can even replace many of the raw materials it does not have.  For example, oil can be replaced by hydrogen to power fuel cell cars.  And electricity can be produced by nuclear breeder reactors since China has a very large store of thorium and quite a lot of uranium as well.  China already has the biggest store of natural resources in the world.  For example, China has the world’s biggest store of rare earth, tungsten, tin, etc.
 
From this, it is obvious that the main emphasis of China’s development should be on the advancement of technologies and the education and training of its people.  All of this means China must have a dynamic internal economy.  It also means that the development of the internal economy and the advancement of China’s technologies will be mutually stimulative.  That is to say, the more China’s internal economy developed the more China’s technologies will advance.  And the more China’s technologies advanced, the more China’s economy will expand.  From this simple analysis, it is already clear that foreign trade will not benefit China in the long term while internal development is vitally essential.  Only a fully developed internal economy will ultimately allow the Chinese people to be fully employed and be fully productive.  And only a fully productive worker can earn the highest wages possible.  In other words, only a fully developed internal economy will make the Chinese people the richest in the world.
 
Now, let’s look at the consequences of expanding foreign trade.  If our friend is so knowledgeable about economics and the “benefits” of foreign trade, he must also know that the wages of the Chinese workers employed in the so-called processing trade must of necessity be the lowest in the world in terms of dollars.  That is to say, if the wages of the Chinese workers rise above $2,000, then the foreign funded factories will relocate out of China to countries with lower wages such as Vietnam or India.  So, the wages of the Chinese workers cannot exceed $2,000 by very much.  Therefore, foreign trade must condemn Chinese workers to perpetual poverty.  If China perpetuates 80% of GDP to foreign trade, then it will only perpetuate the poverty of the Chinese workers. 
 
Another problem with foreign trade is that China cannot continue to expand exports to advanced countries because the advanced countries have already reached their limit to import Chinese products.  The fact that America and European countries and Japan have already maxed out their peoples’ ability to spend is clear evidence that their ability to continue to trade with China has already reached their limit.  This means that since China cannot expand its foreign trade, it must expand its internal economy to provide jobs for its workers.  From the compelling logic above, it should be obvious that China must shift its emphasis of economic development from foreign trade to internal development.
 
And since it is obvious that China must shift its emphasis from foreign trade to internal development, it is now obvious that China must get out of the WTO so as to be able to formulate a more enlightened set of economic policies.  As long as China stayed in the WTO, it will be forced to allow foreign direct investments to acquire increasingly larger share of China’s domestic market which will impede China’s technological advancement and drain away China’s national profits.  If foreign companies can dominate Chinese economy to just 1/3, then it will ultimately drain so much profit from China that it would amount to trillions of dollars every year.  For example, if the per capita GDP of China reaches $50,000, then the total GDP would be some $65 trillion for a population of 1.3 billion.  1/3 of this would be $22 trillion.  And estimating just 10% profits, it would be $2.2 trillion.  In other words, foreign companies can drain away $2.2 trillion from China every year if they controlled 1/3 of China’s economy.  This will prevent China from ever achieving its full developmental potentials.  In fact, China will be kept perpetually backward and poor.
 
Therefore, we now see that if China stayed in the WTO and emphasized foreign trade and permit FDI, then it will be kept poor and backward.  Because of this, it is already very alarming that China’s foreign trade has reached 80% of its GDP.  This is why China’s technological advancement is so slow and why domestic development is so much less than foreign trade and why foreign funded companies are taking over so much of China’s domestic market share.  For example, foreign car companies are producing and selling some 83% of China’s total car production and sale.
 
And the effect on China’s ability to make independent national policies will be impacted adversely by influential foreign countries.  America, for example, can force China to implement policies dangerous to China’s sovereignty by threatening to stop Chinese exports to cause massive unemployment, which will threaten the collapse of the CCP government due to popular uprising.  Therefore, to prevent the collapse of its government, the CCP must kowtow to America and implement policies dangerous to China’s sovereignty.
 
One of the most serious problems now facing China is the growing gap between the wealth of the people.  An increasingly smaller fraction of the people owns an increasingly larger proportion of the wealth.  This is directly caused by the fact that the workers must be kept poor in order to enable exports that rely on cheap labor.  But the employers and exporters keep getting richer as they expand their exports.  Also those living in the urban areas will grow richer as they get the benefit of the foreign trade while the rural people are kept poor.  And the rural people become poorer because inflation reduces their purchasing power.  For example, right after the more than 50% devaluation of the yuan on Jan. 1, 1994, inflation in China spiked some 50% in the subsequent 3 years which reduced the purchasing power of the Chinese people by half and caused the greatest miseries to the rural workers.
 
The truth is that China is now repeating the dangerous times of the latter part of the Qing Dynasty when China’s internal economy was destroyed by the excessive export of silk and the import of opium.  While the coastal areas such as Shanghai grew excessively rich, the internal areas grew steadily poorer.  And where there was a robust internal trade between the north and south of China, the flow was shifted to one that flowed from the internal areas to the coastal areas or from west to east and then out of China.  In short, Qing China’s mode of trade was the flow of energy and resources out of China while opium flowed into China to sap the strength and will of the Chinese people.  And inevitably China became the sick man of Asia in body, mind, and economy.  China’s emphasis on foreign trade is now again repeating this flow of energy and resource out of China to the ultimate impoverishment of China over time no matter how rich the coastal areas may now appear.
 
In the final analysis, it is obvious that foreign trade now accounts for some 80% of China’s economy.  This obviously means that foreign trade is a very big part of China’s economy.  But it does not mean that this is a very healthy state of affairs for China.  In fact, it is a very anomalous and dangerous state of affairs for China.  It will prevent the healthy development of China’s internal economy unless it is quickly changed.  And before China can shift to emphasize its internal development it must first get out of the WTO so that it can formulate an enlightened set of comprehensive economic developmental policies that will put the emphasis on the advancement of technologies and the development of the internal economy through the urbanization of the farmers.