Reuters | December 10, 2001
BEIJING - On the eve of China's WTO entry, Premier Zhu Rongji has ordered officials to prepare for wrenching but crucial reforms needed to drive development and warned them to toe the line in carrying out Beijing's commitments.
In remarks carried by state media on Monday -- a day before Beijing formally joins the World Trade Organization -- Zhu said China needed membership in the global trade group to improve the livelihood of Chinese but said it would come with a price.
"WTO entry is a necessary choice for promoting China's continued rapid and healthy economic development," he told local and central government officials.
"We must realize some industries, enterprises and products will inevitably suffer in the short term. Whether the benefits outweigh the disadvantages will depend on our work."
The end to China's 15-year quest to join the world trade body comes at a critical time, with the country's economic juggernaut faltering as the slowing world economy hits its exports.
Growth might slow to its lowest level in more than a decade, below the crucial seven percent needed to create jobs for tens of millions being thrown out of work by the streamlining state sector, analysts say.
"Next year is the first year for WTO entry and we are facing an extremely serious international economic environment. Doing well on economic work next year is very important," Zhu said.
China's trading partners fear if the economic situation worsens Beijing could pull back on WTO commitments.
"I don't think anyone expects compliance will be to the letter and on time in every respect. Political realities will impinge from time to time," said Michael Spencer, chief Asia economist for Deutsche Bank in Hong Kong.
KEEPING ITS WORD
WTO entry will integrate China further with the world economy, helping cement reforms put into motion when the country opened its doors in 1978.
It will also allow China to expand trade, attract more foreign investment and give private firms a greater role in the economy, analysts say.
Foreign investors hope the pledged market opening will bring them new customers through freer access to the country's 1.3 billion people, and offer a more predictable business environment in which to locate low-cost manufacturing bases.
But local officials, ignorant of WTO rules or deliberately trying to protect domestic firms, could be the biggest obstacle preventing China from keeping its promises.
China has yet to publish the full text of the WTO agreement, leaving many in the dark on the precise pledges.
A nationwide poll of Chinese by the official Xinhua news agency found 55 percent of respondents had little or no understanding of WTO.
A senior trade official said last week that a 900-page Chinese version of its WTO agreement would be ready soon, but there was no word on its release on Monday afternoon.
Zhu told local officials they must become familiar with WTO rules as soon as possible and toe the line on implementation.
"China is a country which keeps its word. We must earnestly implement our pledges," he said.
In recent days, authorities have announced a slew of new rules through the official media aimed at bringing China into line with WTO commitments.
In the latest, the central bank said that from Tuesday foreign banks could apply to conduct domestic currency business in two more cities -- Tianjin and Dalian -- in addition to Shanghai and Shenzhen.
Foreign companies could also apply to provide auto financing, in a concession that U.S. car firms lobbied strongly for during WTO negotiations.Reuters:
