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avity model, all these three questions are quite consistent with their predictions and the GATT/WTO promotes trade significantly for advanced countries but not for developing countries. In fact, on one hand, Wei refutes Rose’s conclusion, on the other hand, this paper provides some supports to the trade theory for the WTO.

Moreover, Theo (2008) integrated Rose, Tomz and Wei’s methods into a comprehensive approach, which made the unobservable variables bias minimized and finally gained a result indicating that the WTO has no significant relation with the international trade but the preferential trade agreements (PTA) create strong trade effects. Despite a strong effect, it is unevenly. To be specific, PTA is a sort of trade agreement that the members of a unified organization provide a special tariff preference to part of or the whole commodities for its other partners by contracts. He concluded that if a country has a powerful ability to bargain for tariff reduction before accession into the WTO, it could be experienced a more positive and significant WTO trade effects when does a bilateral trade.

Besides, Rose (2000) set off a new wave of research about whether a currency union could probably increase trade. Rose and Glick (2004) give the answer to this question using a panel data covering 217countries from 1948 to 1997. Finally they find that a pair of countries which joined a currency union would almost double its bilateral trade. Baldwin and Di (2006) in their paper test this relationship with trade and provide a measure of the size of the common currency effect. They employ a very large disaggregated trade database, for twenty countries in their study, finding that the euro had a positive impact on trade. Actually, the opinion that using a unified currency can increase the volume of trade is also studied by many experts.

In terms of studying the impact of WTO and regional trade agreement (RTA) on China's trade, Chinese scholars also conduct a variety researches about the gravity model. Cao (2007) made an empirical analysis about the trade volume in China with the gravity model and found that entry into a regional trade agreement (RTA) could have a great impact on bilateral trade. In his study, he made an empirical analysis about the trade flows between China and its 34 largest trade partners in 2005. His result indicated that the Gross Domestic Product (GDP), distance and ASEAN membership are the main factors that affect China’s external trade. Besides, he also estimated China’s trade potential and obtained a country list which are great export market for China, such as India, Turkey, Denmark, France, Poland, Brazil and Mexico, etc. of course, this result is based on the analysis of Gravity model he used.

3. The World Trade Organization (WTO) and China

3.1 The Role of World Trade Organization

The WTO/GATT has attracted 155 members joining it since in 1995 and no one has exit during the past years. The WTO is responsible for supervising and managing trade policies and regulations of its membership regularly to ensure them justifiable. Subsequently, in order to achieve the stated objectives of the agreements and protocols, the WTO has the power to take active and effective measures to organize the implementation of trade agreements and arrangements under its jurisdiction. Additionally, the WTO has the responsibility to coordinate with the Intern