China’s increasing openness: threat or opportunity?

China’s increasing openness has caused considerable concerns in the rest of the world. These concerns have been exacerbated by China’s recent accession to the World Trade Organization (WTO) and its recently signed free trade agreement with the Association of South-East Asian Nations (ASEAN). Many developing countries, especially those in Asia, fear that competitive manufactures from China will not only flood their domestic markets, but also replace their exports in third country markets, especially in industrial countries. As China becomes increasingly attractive to foreign direct investment (FDI) with its WTO accession, these developing countries also fear that FDI may be further diverted away from them, in addition to luring their domestic investors away from home.