China 100 days young as a WTO member - Taurus - World Trade Organisation - Brief Article

Business Asia, March, 2002 by Tim Fischer

LATE LAST YEAR at Doha, Qatar, at the Ministerial Plenary meeting of the World Trade Organisation (WTO), China was readmitted to the WTO along with Chinese Taipei. Hong Kong-China has always been a member of the WTO and, of course, many years ago China was a founding member of the originating organisation built around the GATT -- the General Agreement on Tariff and Trade.

So China this month celebrates its 100th day as a fully-fledged member, but with years of transition and accession set to continue to unfold, no doubt involving considerable agony and job churn.

The West should not be unmindful of the huge reforms and changes to the economy of China that membership involves. Premier Zhu, along with many Ministers including Long Yong Tu, have been single minded about the advantages overall of membership and helped drive the process forward.

Premier Zhu has been a strong economic performer over the years, pushing along privatisation of Government-owned utilities and corporations. In addition, he has allowed some of the bigger and over stretched corporations to go bankrupt as part of a reality dose and reform agenda.

Lengthy and complex negotiations around the world over many years have been necessary, including those between Australia and China involving several sessions in Canberra, Geneva, Singapore and Beijing. The result has been very firm commitments for China to open up its trade, including wool quota allocations and improving access in other key areas of interest to Australia, particularly by the lowering of tariffs.

Equally, Australia continues to open up to trade from China with huge expansion in two-way trade to the benefit of both countries, some $9.5 billion in 1998 and well over $15 billion today.

Under the umbrella of the WTO, further expansion will now be forthcoming. As the China economy continues to grow, the next six years will in fact be six golden years of huge opportunities for trade in both services and merchandise, tourism expansion as well as investment expansion.

Notwithstanding such horrific events as 11 September, and the complex ramifications arising as a necessary war against terrorism continues, China will power ahead with growth spreading well beyond the coastal zone.

This will be especially so in the lead up to the Beijing Paralympics 2008, preceded by that "running in" event known as the Olympics 2008! This is not because of any construction boom or other matters directly associated with the Paralympics and the Olympics, but because there is a realisation there will be a good deal of stability and transparency and openness with China delivered by Beijing in the years leading up to 2008.

Of course, there will be changes of leadership in China involving some power plays between old guard and reform guard, but these are unlikely to get out of hand. Of more difficulty is the resolution of issues across the Taiwan Straits with Chinese Taipei -- this is a crucial and huge issue with real potential for things to get out of hand if mishandled. But the single minded focus of Beijing and the other power centres of China will be towards success in the build up to and conduct of the events scheduled for Beijing in 2008.

It was good to see President George W Bush return to China and conduct some high level diplomacy. This was one of the few countries he visited years ago when his father was Liaison Officer, or Ambassador Designate, in Beijing following the famous Nixon visit of 30 years ago this month. In fact, George Bush was even known to relax at the time and play tennis with various Australian diplomats and others, including Murray McLean, albeit with mixed results!

It is to be hoped that in the scheme of things, and the extremely busy life and necessarily limited focus of the occupant of the White House, these personal connections will ensure China remains on the radar screen of the USA and the USA remains engaged with China throughout this decade and beyond.

Certainly the smart and mature way China has handled the bugging of its Presidential 767 when being revamped in California points to a level of sophistication and capability which does create optimism. However, as a postscript to that particular saga, it is a bit hard to believe the suggestion that old-guard factional elements in Beijing were responsible for the bugging of the Chinese President's plane!

All in all the West, indeed the World, must remain engaged with China, and Australia in particular must continue to expand its trade, tourism and investment, along with its social and cultural connections.

Right now we are successfully exporting to China a huge raft of product and services, even granite from near Crystal Brook in South Australia. More and more demand exists for this particularly unusual trade, which is tailor made for the Adelaide-Alice Springs-Darwin Railway line due to be completed in March 2004.

The truth is the potential is unlimited, but there can be no complacency as the competition from other countries to trade with China will be aggressive.