Possible benefits to the Chinese tourism and hospitality industry

Changes in the Chinese economy, the admission to the WTO, the granting of the 2008 Olympic Games and the improved relations with Europe

Term Paper 2002 10 Pages

Environmental Sciences


Table of Contents

I. Introduction

II. Admission to the WTO
A. History
B. Reasons for China to join the WTO
C. Positive Impacts
D. Negative Impacts

III. Olympic Games 2008 Beijing
A. Olympic Plans
B. Green Olympics

IV. European Investments in China
A. Transrapid
B. Others

V. Benefits for the Hospitality and Tourism Industry

VI. Conclusion

VII. Bibliography

I. Introduction

On the 11 December 2001 China became a full member of the World Trade Organisation (WTO). It was the final step in a long chain of events, which preceded the full membership of the communistic country. As China is the second biggest trading power in the world with a GDP of US$ 4.5 trillion, it could no longer be ignored by the western countries, and more and more other nations, especially in Europe, increased their bilateral relations with China. This country in the Far East has not only one of the oldest cultures in the world, but has also one of the biggest and most profitable markets to become accessible for western companies. With a population of 1.4 billion people China has also the highest population on this planet. Its main economic factors are agriculture (rice, soja), natural resources (coal, gold, oil) and industry (garment, metal). But tourism is playing a more and more important role for this country. With the granting of the Olympic Games 2008 in Beijing, the Chinese government expects a major boost in the hospitality sector over the next 10 years.

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China tried to change its economical structures more towards a social market economy over the last few years. It opened its borders for foreign investors to bring more money into the country and Chinas GDP increased by 9% annually between 1996 and 2001. Living standards doubled in the last decade, but still around 10% of the people live in poverty. The GDP per capita is relatively low with around US$ 3800, even though this figure is not very reliable as it comes from official Chinese sources and therefore it could be much lower in reality (geography; 2001). But the trend is obvious, because of the improved international relations with other countries, China has enjoyed the positive impacts of multilateral trading. Especially German companies are investing heavily on the Chinese market, whereby the Transrapid, build in Shanghai, is just one good example. With the Olympic Games 2008 China has been offered a tremendous chance to become a major tourist attraction in the world. Especially as this part of the world has been fairly undiscovered by western tourists so far. In this paper I will try to analyse the impacts of the admission to the WTO, the granting of the Olympic Games and the improved relations with Europe on the tourism and hospitality sector in the next years.

II. Admission to the WTO

A. History

The WTO was founded on the 1 January 1995 and succeeded the General Agreement on Tariffs and Trade (GATT), which was signed in 1949. The WTO goal is to create or increase market access for all members of the organisation on a multilateral base. It wants to strengthen the commitments in goods, services and property rights. China left the GATT in 1950, calling it a capitalist plot (BBC; 1999). In 1978 China started to open up towards the western world again and in 1986 they applied to join the GATT again. Not only because of the frequent violation of human rights, but also because of the steady hesitation to let foreign companies into their domestic markets, made it difficult for other countries to accept China as a full member. From 1996 onwards China adjusted more and more to the rules of a social market economy and started to restructure and privatise its economy. Imports increased from US$ 18.9 mio. in 1980 to US$ 166.7 mio. in 1997, exports from US$ 23.6 mio. in 1980 to US$ 207.2 mio. in 1997 (WTTC; 1998). Biggest international partners are the USA with 22% of trade volume share, Hong Kong (now Chinese) with 19% and Germany (geography; 1999). China slashed its tariff levels during the 90ies and made several bilateral agreements with the EU and the USA but under WTO rule they must open their market to all WTO members equally. On the 11 December 2001 China became an official member of the WTO (WTO; 2002).

B. Reasons for China to join the WTO

As China is one of the largest economies in the world it is essential for them, as for the rest of the world, to join the WTO. As China doesn’t want to miss the boat when the rest of the world is developing free trade, they must adjust to the general trade laws of the WTO to avoid economical stagnation. With the massive opportunities of the Chinese market it would be a major mistake to stick to the old communistic ideals. Further on it would give China a huge advantage towards the old enemy Taiwan, which hasn’t joined the WTO yet (WTO; 2002).



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Institution / College
César Ritz Colleges – Environmental Department
B+ oder 87%
With Chinese Trade Organisation) Olympic Games Europe




Title: Possible benefits to the Chinese tourism and hospitality industry