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Thu, Feb 20, 2003 - Page 12 News List

US trade official sees WTO seeping into China

MARKET OPENING A tour of Chongqing shows city authorities are counting on the requirements of WTO accession to help them catch up to eastern seaboard rivals

REUTERS , CHONGQING

The average tourist walking through back alleys of Chongqing in western China might stumble across an open market and find piles of fat oranges among the rows of fruit.

Crossing the street, he barely notices a new car moving along with the rumbling traffic.

US Trade Representative Robert Zoellick sees the oranges too.

But they're American oranges from Sunkist, and that car is a spanking new Ford, fresh off the assembly line from a fledgling joint venture in this sprawling city of more than 30 million.

Zoellick, after all, is the top trade official from the world's largest economy, on a visit to find out how well US goods and investment were faring in these once sheltered markets after China joined the WTO.

Many analysts expected the market opening pledges China made tied to its WTO entry in December 2001 would face resistance in far-flung provinces as entrenched local officials ignored central government diktat from 1,200km away in Beijing.

But after haggling for fruit at the market, test driving a freshly minted Ford and chatting with Chinese students about trade, Zoellick says he found more evidence that Chong-qing was using WTO as a means of catching up to its rich eastern cousins.

And Chongqing's Communist Party chief Huang Zhendong (黃鎮東) told Zoellick to come back, and bring his friends -- US investors.

"What's intriguing is that the local government is focused on the WTO and China's accession to the WTO. I think there's a reason to that," he said.

"If you take a city like Chongqing they know they're competing with the coastal provinces," he said.

Since China opened its economy in the late 1970s, the uneven development has become stark. Eastern provinces and cities like glittering Shanghai have attracted ever-growing levels of investment as standards of living spiral upward.

Inland provinces have been left in the dust. Inefficient industries languished as foreign direct investment concentrated along the coast in search of better infrastructure and services.

As China encourages state enterprise reforms, companies go bust and put millions out of work, producing social pressures that sometimes explode in protests by angry workers.

But Zoellick said WTO accession and its new rules and regulations helped draw some investment to the West that once would have gone straight to the eastern seaboard.

In Chongqing, "they don't just see the rules as new requirements, they see it as an opportunity to show they can do what other people in the rest of China have done," he said.

But the WTO also has brought real fears to China. As Zoellick bargained at the market, a nervous lychee peddler nearby reflected the worries of many Chinese about the pressures ahead.

"The competition will be immense," he said.

As trade barriers fall, cheap imports from abroad will squeeze a range of Chinese agricultural products, further pressuring a vast farm population that also has seen its income clipped by often crippling taxes and fees from above.

Indeed, Zoellick raised concerns about China's implementation of its WTO commitments and US market access in talks with Vice Premier Wen Jiabao (溫家寶), expected to take over from Premier Zhu Rongji (朱鎔基) in March, and Trade Minister Shi Guangsheng (石廣生).

He said the implementation process would take time.

"I think this is going to be an evolutionary and extensive process," he said.

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