http://www.boston.com/dailynews/261/world/China_s_entry_to_WTO_hailed_bu:.shtml

China's entry to WTO hailed, but opponents worry firms will succumb to foreign competition

By John Leicester, Associated Press, 9/18/2001 08:30

BEIJING (AP) Foreign firms, Japan's government and Chinese advocates of reform hailed China's impending World Trade Organization membership on Tuesday, but others fretted that the country is ill-prepared for an onslaught of foreign competition.

After 15 years of grueling talks, negotiators on Monday agreed to rules allowing China to join the global trade club. China's government vowed to abide by common trade rules and open its markets, saying WTO entry would boost China's economy and unleash the huge purchasing power of 1.26 billion Chinese.

''Joining the WTO is an important strategic decision of the Chinese government against the background of globalization,'' said Foreign Ministry spokesman Zhu Bangzao. ''The Chinese government is busy making preparations for entrance so that the various commitments can be earnestly fulfilled.''

Foreign businesses were excited by the prospect of greater access to China's long-protected markets. But they also urged foreign governments and firms to help ensure that China fulfills promises to open up.

''The terms of China's accession are very specific, both as to goals and as to the time granted to China to achieve those goals,'' said Robert Kapp, president of the U.S.-China Business Council.

For some, the decision took on added significance because it came when the world and its markets are still reeling from last week's terror attacks in New York and Washington.

''When we see some very powerful forces trying to tear down the international order, to have the largest country in the world become a part of that order and make those type of commitments it is a very encouraging sign,'' said Timothy Stratford, vice chairman of General Motors China.

Chinese leaders are gambling that increased foreign investment and access to export markets will create jobs and prosperity. They also hope ailing state firms will be forced to reform.

But opponents fear Chinese industries and farmers will succumb to foreign competition, costing millions of jobs.

Police expect smuggling to decrease as tariffs drop and foreign goods become more available. But crime could rise as idle farmers and the unemployed flock to cities in search of work.

''I don't think we're adequately prepared,'' said Han Deqiang, an economics professor and author of the anti-globalization book ''Clash.'' ''The disadvantages outweigh the advantages.''

Han said that if he were China's leader, he would have delayed WTO entry until ''Chinese industries were competitive enough.'' He fretted that China would be unable to protect firms from more modern competitors.

''China's door has always been open, but the meaning of WTO is to rip the sill off the door too,'' he said. ''China needed that sill.''

Some Chinese supporters of WTO entry hope that economic change will force the communist government to allow political reforms too. Chinese consumers also have been looking forward to having a greater choice of cheaper foreign imports.

Bankruptcy consultant Cao Siyuan, one of China's foremost advocates of capitalist remedies for socialist industries, said WTO accession was as significant as China's bold decision two decades ago to begin opening its state-planned economy to market forces.

''With the first round of reform and opening up, China opened a window, stuck out its hand and shook hands with the world,'' Cao said. ''But after it joins the WTO, China will ride the waves of economic globalization, fully joining tracks with and embracing the international community.''

Foreign Minister Makiko Tanaka of Japan, which has the world's second-largest economy and is the United States' closest ally in the region, said Japan hoped the China's entry will bring ''further prosperity and stability in the world.''

The U.S. Department of Agriculture predicted a possible increase of $2 billion a year for American farm exports.

''We are very pleased,'' said Agriculture Secretary Ann Veneman. ''China has committed to specific market-opening measures that will benefit U.S. products, including reduced tariffs and an end to import bans.''

Trade ministers are expected to adopt the 1,000-page text laying out terms of China's membership at a meeting in November. That will allow China to join the WTO early next year, after the Chinese legislature approves the deal.

-- Anonymous, September 18, 2001