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Monday, November 22, 1999

China faces wary people on WTO deal

IAN JOHNSON  
NOVEMBER 21: China is trying to sell the benefits of a global trade pact to wary citizens and officials, conceding that the deal will cause pain but hinting that the country will still protect key industries from foreign competition.

Unlike the Clinton administration, which must sell to the U.S. Congress the recently concluded deal that would allow China into the World Trade Organisation, Beijing faces little formal opposition to the pact. The country's parliament is likely to vote on it, but that body is firmly in the hands of the Communist Party, whose all-powerful Standing Committee, say government officials, has endorsed the pact.

Still, China's mandarins face enormous internal scepticism over the deal. Officials in many powerful industries, such as telecommunications, autos and energy, worry that lower tariffs and greater foreign access will destroy them.

Economic nationalism is budding as well. When China last April offered foreign companies a majority stake in some telecommunications sectors,Internet chat rooms filled with angry critics saying the government was selling out a strategic sector of the economy.

These fears have pushed the government into undertaking a WTO sell job in the media and behind closed doors for dubious bureaucrats.

Most news reports have been predictably upbeat, although a few have hinted at problems to come. One-time WTO opponent Wu Jichuan, the powerful minister of information industries, was cited in an article Thursday saying that ``entering the WTO will create a big shock for China's information industries'', although he quickly added that such competition would help in the long run because it would ``promote the development and raise the quality of Chinese telecommunications services''.

Other reports have hinted China will still protect key industries. Wednesday's China Business Information Times, for example, said in an article that many WTO members protect industries. Although tariffs will drop and imported goods become cheaper, the newspaper argued thatthe bureaucracy will retain other formidable weapons to restrict foreigners. Besides the media blitz, the government also has started holding a series of meetings with officials and managers in affected industries. The State Economic and Trade Commission, which is supposed to oversee most Chinese manufacturing industries, has started ``work meetings'' to ``study'' the WTO agreement, according to a commission official. ``They want to allay worries that WTO means the end of some industries,'' he said.

A conference that concluded on Thursday in the southern boomtown of Guangzhou had a similar message. Zhang Hanlin, a trade professor who addressed the group, said: ``People think WTO means pure free competition, but we're trying to show them that this isn't the case.''

-- The Wall Street Journal

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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