Sat, Dec 10, 2005 - Page 9 News List

China keeps low profile ahead of WTO talks


The future of free trade is at stake, but as negotiators gear up for a showdown in Hong Kong next week, China -- the world's fastest growing trading power -- is treading oh so quietly.

The WTO talks should be one of China's biggest events of the year -- a global effort to salvage commitments to slash subsidies, tariffs and other barriers to global commerce, and to use trade to help poor nations.

So far, though, Beijing has had little to say in the days leading up to the Tuesday through Sunday meeting. Despite China's status as ultimate host of the gathering, analysts don't expect it to play a prominent role.

One key reason is that China's trade policies are not at the heart of the current impasse between the EU, US and developing nations over farm subsidies and tariffs that threatens to scuttle the whole summit. Beijing doesn't want to wade into that hornet's nest, analysts say.

"What is China going to say that's going to change things? It's a stalemate," said Bob Broadfoot, director of the Economic and Political Risk Consultancy in Hong Kong.

Also, given the pressures to meet its earlier commitments since joining the WTO in 2001, China is in no position to offer new concessions.

And with its trade surplus surging to US$100 billion this year -- and double that with the US -- it's ill-placed to make demands on other countries, says Stephen Green, senior economist for Standard Chartered Bank in China.

"The sense is that China is still digesting the last round of reforms," Green said.

"They're keeping their head under the parapet," he added.

Four years after joining the WTO, China is still working on carrying out its commitments to open its markets. It has run ahead of schedule on slashing tariffs on manufactured goods and has expanded the range of operations allowed to foreign retailers, banks, insurance companies and other financial institutions.

But foreign officials and business groups complain of delays and a lack of transparency in many areas, of arbitrary limits on farm imports and of persistently lax enforcement of China's laws against counterfeiting and other forms of commercial piracy.

Beijing has given no sign of backpedaling on its earlier market-opening commitments, but the new generation of Chinese Communist Party leaders who took power in 2003 are preoccupied with other urgent issues: environmental catastrophes, woefully inadequate schools and health care and the potentially explosive gap between rich and poor.

Other regional export powers like Japan and South Korea, which have come under fire for their policies on rice, are also sticking to the sidelines, making the Asian locale of the Hong Kong gathering "largely irrelevant," Broadfoot said.

Expectations for significant progress at the summit are extremely low.

The so-called "Doha Round" of talks, kicked off in 2001 in Qatar's capital, have been deadlocked for some time, mostly over farm trade. The best the 148 members of the Geneva-based WTO can hope for is an agreement next year or by 2007.

Still, it's in China's interest that the meeting yield at least some progress -- and not descend into chaos like past summits in Seattle and Cancun, Mexico.

"We hope the Hong Kong meeting will achieve essential progress," Zhang Xiangchen (張向晨), head of the Commerce Ministry's Department for WTO Affairs, told reporters in Beijing on Monday.

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