The competitiveness mandated by WTO, and the removal of tariffs, is likely to kill off the most insolvent of the SOEs. This will create unemployment and serious social unrest by dismantling the subsidized welfare system. However, investors are cautioned to see how transparent is the process for acquisition before they plunge. The Internet, too, will change the rules of the game, with the power over time to lay waste to hierarchical organizations, given the speed and access to information. This could affect the powerful state structures, but all this is some way off.
China is only at the beginning of the transition to a digital economy.
The Rule of Law is another area for development and the need for better law enforcement. Compliance and monitoring will in future take up a deal of management and professional time. In fact, companies would do well to have a WTO strategy. They will need more flexible structures if they are to deal with the complexities of the post-WTO environment. The challenge for China will be to dispel skepticism about its own willingness to comply with WTO conditions.