Entry to the WTO should integrate the mainland economy into a global capitalist system that offers both tremendous growth opportunities and, potentially, ruinous competition.
Lower tariff barriers promise a flood of imports, narrowing the mainland's trade surplus and focusing attention on a potential devaluation of the yuan, as Beijing fights a deflationary spiral of falling prices and low growth.
Policy makers will be forced to re-focus on state-owned enterprise reform, with inefficient firms soon to experience bruising competition from foreign companies, which have long been denied market access except on the harshest terms.
While broadly welcoming a move that weds the mainland to the global economy, most economists predict a deepening economic downturn and sharply rising unemployment as domestic firms shape up to competition.
In the short term, imports are expected to surge, causing a deterioration in what had been an improving trade picture. The flood of investment from foreign firms looking to capitalise on direct market access will take longer to arrive.
'Surging imports and modest growth in exports means the mainland's trade surplus is likely to fall further next year, probably by 20 to 30 per cent,' said Frank Gong Fangxiong, global currency strategist at the Bank of America.
'I expect Beijing to undertake an effective devaluation early next year to boost exports and growth, and deter imports. This is likely to involve a widening of the yuan's trading band,' he said.
