China's WTO membership reflects its struggle to embrace future

Wednesday, December 11, 2002

BEIJING -- It reads like a surrealist's shopping list: Viagra and disposable cigarette lighters, rabbit meat and counterfeit "Scooby Doo" DVDs and dusty bonds dating to the collapse of China's final imperial dynasty.

But these items belong together. Each has played a role in a saga of money and economic change that affects the entire planet -- China's commerce with other nations during its first year in the World Trade Organization, the rules-making body of modern global commerce.

Beijing marks the first anniversary of its coveted WTO inauguration Wednesday much as it began membership -- eager to reap the benefits of open markets, wrangling its outdated business traditions into published law, promising it will play by the rules and vehemently objecting to anyone who doesn't.

And for foreign companies across the world -- hungry for the full access to China's market of 1.3 billion people that some say they still aren't getting -- progress can't come quickly enough.

"China has demonstrated a desire to comply with its WTO obligations. But in some instances, its implementation has fallen short," said Charlene Barshefsky, the former U.S. trade representative who led U.S.-Chinese negotiations on China's WTO entry.

Wanted protection, reform

Membership in the WTO, a body founded to promote free trade, was a cornerstone of China's move from a planned economy to a market-driven system.

Long a target of criticism for huge trade surpluses with the United States and other economies, Beijing wanted the protection that comes with the WTO requirement to submit trade disputes to independent judges.

But Chinese planners also hope WTO requirements will force reform on coddled state companies, binding them into global rules and bypassing local political bosses intent on protecting their fiefdoms.

Exports and imports are still rising, officials say. Economic growth remains at around 8 percent.

"We have won more applause than criticism," Foreign Trade Minister Shi Guangsheng said in a WTO speech Sunday, quoted by the party newspaper People's Daily.

Yet as it overhauls clunky state firms and grapples with endemic local protectionism, China is watching international commerce rumble across the land.

Millions have been put out of work in heavy industry, migrants are streaming into cities, farmers are jittery about an invasion of cheap foreign food and the Communist Party is frantic to keep progress moving and retain its monopoly on power.

The government of the world's largest developing economy is caught between challenges -- wary of creating instability by opening markets too quickly, yet duty-bound to do so by the organization it lobbied so vigorously to join.

Perhaps the biggest WTO-related challenge for China's new communist leadership is to make sure policies made in Beijing are heeded by powerful municipal-level cadres.

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