China a step closer to WTO membership

By Batuk Gathani

BRUSSELS, SEPT. 6. The one-day Sino-European summit concluded on Wednesday night with China predicting that it would become member of the World Trade Organisation in November, provided the European Union was able to resolve an outstanding problem over the terms of entry for European life insurance companies into the Chinese market along with American companies.

European officials see this as a ``litmus test'' of China's bona fides in reforms and free trade in anticipation of WTO membership. The European Trade Commissioner, Mr. Pascal Lamy, would soon open negotiations with U.S. authorities to establish a `Euro-U.S. policy consensus'.

The Europeans note that an American company AIG has already entered China, gaining favourable terms compared to European companies.

The importance China attached to its dialogue with the E.U. at the summit level is highlighted by the fact that it was attended by a high-power delegation of 135 members including 12 from the Government.

The team was led by the Prime Minister, Mr. Zhu Rongji. The Chinese made it ``abundantly clear'' to the E.U. officials that their country intend to ``abide fully'' by the terms of bilateral agreements with the E.U. and the U.S. The spade work for China's entry into the WTO will be finalised by Sept. 14.

The current perception is that in all probability, China's accession to the WTO will be concluded at the November meeting of the organisation in Doha, Qatar.

The Sino-European discussions also covered a wide range of topics which included bilateral relations, political dialogue, human rights, fight against illegal migration and trafficking in human beings.

Although currently illegal Chinese migrants do not rank among the biggest of such groups arriving in E.U. countries, their number are increasing.

Both China and the E.U. consider the issue a serious problem. Analysts point out that with prospects of some three to four million Chinese workers and farmers losing their livelihood due to WTO reforms and ensuing competition, illegal Chinese migration may increase with greater degree of freedom for movement within and outside China. Hence, the WTO membership for China has become a hotly debated issue among Chinese reformers and hardliners.

Europeans are fascinated by and enamoured of the prospects of operating in China's 1.3-billion market and on their part, the Chinese are hoping to benefit from the vast investment and trading opportunities. Since the eighties, European business - like its counterpart in the U.S. - has been overwhelmed by China's trade and investment prospects.

It is not often realised that China is still a developing country. Its current gross domestic product is roughly on par with that of Italy. Western investment in China is modest and even at its peak, the American investment there was less than that in Holland.

China has yet to make an impact on the global economy. Mr. Gerald Segal, former director of the Economic and Social Research Council's Pacific Asia programme wrote: ``With a bankrupt banking system and state-owned industries producing three per cent of the GDP that rusts in warehouses, China's nominal growth rate of seven per cent is suspect and unimpressive''.

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Section  : International
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