Gang Fan's spectacles sum up why China, already embroiled in a lengthening list of trade spats, is bracing for even more trouble once it joins the WTO.
The spectacles cost Fan just US$1, the result he says of China's technological progress and very low blue-collar labor costs that have not risen in 10 years.
"People increasingly argue that China is dumping, but the reality is that Chinese goods are cheap on international markets but they're even cheaper in China. That's not dumping," said Fan, director of the National Economics Research Institute in Beijing.
But that defense, he acknowledges, is unlikely to avert an increase in the number of anti-dumping cases against China once WTO membership gives its super-competitive industries even greater access to world markets. "This kind of trade friction is really an alarming issue," Fan said.
China hogged the headlines last week over an escalating trade row with Japan; it is also one of the steel producers that could face import curbs being considered by the Bush administration.
Yet Fan, trade-policy experts and businessmen who attended a recent conference in Hong Kong are perhaps more worried about the potential for conflict with poorer countries unable to match the cocktail of cheap Chinese labor and the muscle of multinational firms rapidly building up powerful export platforms in China.
"China will become by far the most important manufacturing country in the world, especially for labor-intensive industries. It'll happen almost overnight," a top Hong Kong businessman told the conference, organized by the Lausanne-based Evian Group, a forum that promotes a liberal global trade and investment agenda.
Brazil and India were seen among the bigger countries vulnerable to China's prowess.
A European official said smaller toy and textile exporters would be hardest hit and predicted a flurry of requests for the WTO to approve safeguards against cheap Chinese goods.
"The rest of the world is just going to have to adapt to China," a financial services consultant said. "There are going to be a lot of problems down the road for the world economy."
Several participants said no one would be more vulnerable than China's neighbors in southeast Asia, who have watched helplessly in recent years as more and more foreign direct investment has passed them by en route for China.
"Southeast Asia will have to find their niches, but I don't think they've worked out their competitive response so far," leading Hong Kong businessman Victor Fung said.
Fan, the Chinese academic, said Beijing was aware of the difficulties its neighbors would face. This was why it was striving for closer cooperation with them, for example by helping to set up a regional network of central bank swaps and exploring closer trade ties ASEAN-member countries.
"The most important thing is to try to keep trade issues from becoming politicized," Fan said.
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