DATE=11/15/1999
TYPE=BACKGROUND REPORT
TITLE=CHINA W-T-O
NUMBER=5-44760
BYLINE=AMY BICKERS
DATELINE=HONG KONG
INTERNET=YES
CONTENT=
VOICED AT:
INTRO: After more than a decade of fruitless talks,
Washington and Beijing have broken the deadlock and
agreed to a landmark trade pact. As Amy Bickers
reports from V-O-A's Asia News Center in Hong Kong,
the deal represents a major step towards integrating
China into the global economy.
TEXT: With the Sino-U-S trade accord now signed, a
major hurdle in China's long-time bid to join the
World Trade Organization is removed.
While China still needs an agreement with the European
Union, the accord with the Washington has far reaching
implications for China.
Frank Gong, a Hong Kong based-economist for the Bank
of America, says the market-opening steps and legal
changes required to become a W-T-O member will
transform much of the country's economy.
/// GONG ACT ///
I think this is a very positive long-term
development. It shows the commitment to reform
is still there from the highest leadership
because opening markets is a very painful
process and China may suffer on a lot of fronts
for the short term.
/// END ACT ///
Mr. Gong says Chinese companies will be forced to
adopt international standards for business practices,
which will ultimately energize the nation's industry.
But he warns in the short term, the tremendous changes
will take their toll on unprofitable firms --
especially in the state-run sector. As a result, the
economy will suffer.
/// GONG ACT ///
First of all China's trade balance will go down
because imports will go up and tariffs will
drop. Foreign goods will come in to compete with
domestic goods, and China still has deflation
going on. That will put even more pressure on
China's domestic producers, and you may see
deflation get worse next year and unemployment
rise.
/// END ACT ///
Monday's deal, which came after six days of grueling
talks, will force China to allow American companies
and products into the country on a scale not seen
since the Communist system was put in place half a
century ago.
At the same time, China will have improved access to
the U-S market, the wealthiest in the world, worth
billions of dollars annually.
While the nature of the deal is economic, some
analysts are already wondering how it will effect
other aspects of bilateral relations and China's
overall foreign policy.
Martin Lee, an outspoken pro-democracy leader in Hong
Kong, is hopeful that the opening of markets will lead
to an increase in other kinds of freedoms as well.
/// LEE ACT ///
I think China's economic reform is on its way
towards a fully developed market and economy.
And I think one naturally looks at political and
legal reform as well. Many years ago Deng
Xiaoping said you cannot have economic reform
without the corresponding political reform, and
I think in some way he must be right.
/// END ACT ///
Mr. Lee and other experts also say the rule of law in
China will also be greatly improved by the trade pact,
which will oblige Beijing to follow international laws
in areas such as commerce. But the transformations on
many levels that will result from the agreement will
not be easy or painless, since they will open the door
to greater foreign competition and international
scrutiny. (SIGNED)
NEB/AB/FC/JO
15-Nov-1999 06:04 AM EDT (15-Nov-1999 1104 UTC)
NNNN
Source: Voice of America
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