ABSTRACT
Since Deng Xiaoping initiated economic reforms in 1978, China’s policy of
‘opening to the outside world’ has been consistently deepening and broadening,
reflecting Beijing’s efforts to respond actively to the changing conditions of the
global and regional economy as well as the changing conditions of the Chinese
domestic economy, so as to best serve the national objective of rapid economic
development. In this process, two policy decisions that the Chinese government
has taken over the part two decades are of particular significance, namely, the
decision to join the General Agreement on Tariffs and Trade (GATT) in 1986 –
the World Trade Organization (WTO) after 1995 – and the decision to form a
free trade area (FTA) with the Association of Southeast Asian Nations (ASEAN)
in 2001. These two important policy decisions not only reflect a sea change in
the Chinese leadership’s perspective on China’s foreign economic relations, but
they also reflect the substantive change in China’s economic relations with the
outside world. While these are two separate policy decisions, which were made
at different times and driven by different motives under different conditions,
they are no doubt logically related to each other.1
