The Washington Post / By Clay Chandler / Washington Post Foreign Service
SHANGHAI, May 10 -- Premier Zhu Rongji told a group of investors here today that the Chinese government stands ready to rewrite its trade and investment laws to attract more foreign capital and bring China's economy into greater harmony with members of the World Trade Organization.
Zhu, addressing a group of nearly 1,000 foreign investors and business leaders at a dinner sponsored by the Asia Society, said that in exchange for acceptance into the Geneva-based global trade body, China is willing to throw open to foreign competition a host of key economic sectors, including energy, transportation, telecommunications, banking and insurance.
"We will review and, if necessary, amend the existing foreign-related laws and regulations in light of the requirements of the WTO rules," Zhu declared. He said China hopes to "set up an economic and trade system consistent with both international practice and our national conditions at an early date."
Zhu, who has pushed hard to implement market-oriented policies in his country's inefficient socialist economy, acknowledged that increased global competition will bring hardships to many segments of Chinese society. But he argued that greater openness is worth the sacrifice in the long run because it will speed revitalization of China's troubled state-owned enterprises and boost growth of the economy as a whole.
Zhu's comments came weeks ahead of a key vote in the U.S. Congress on whether to grant China permanent normal trade status. At issue is whether the United States should permanently extend to China the same low tariffs it routinely offers its other major trading partners. Under current law, Congress must vote each year on whether to grant low-tariff trade privileges to China.
Zhu's speech also preceded a visit to Beijing next week by Pascal Lamy, the top trade negotiator for the European Union, to discuss terms of China's entry to the WTO. The EU is the last significant trading partner with which China has yet to reach accord on terms of its admission to the trade group.
In an earlier speech to the investors, Endymion Wilkinson, the EU's ambassador to Beijing, expressed optimism that Lamy's visit will prove to be the "final round" of negotiations between Beijing and Brussels on China's bid for WTO admission. But he stressed that the EU will insist on a deal that reflects the economic interests of its member countries and is unwilling simply to rubber-stamp terms for China's WTO accession that were worked out between Beijing and the Clinton administration in November.
Zhu said that China's 14-year bid for admission to the international trade regime is "picking up speed."
Investors listening to Zhu's speech expressed broad agreement that China is a market with vast potential. Many said acceptance into the WTO will significantly boost this nation's prospects for long-term economic growth.
Earlier in the day, for example, a top executive of Eastman Kodak Co. explained in a presentation that if his company could get China's consumers to use as much film as those in Taiwan, the overall market for film in China would increase by 50 percent. Even so, with the WTO question unresolved and the commitment of China's leaders to genuine market liberalization still in doubt, many foreign investors said they remain wary of committing large sums in this economy.
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