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China defends WTO record ahead of U.S. talks
2006-12-11
China defended its record as a member of the World Trade Organization on Monday, five years after joining the global trade arbiter and days before talks with U.S. officials who have said China is not pulling its weight. "Five years into its membership of the World Trade Organization (WTO), China is fully justified to take pride in its stellar performance as an increasingly important growth engine for the global economy," said the official China Daily on Monday. But the scorecard of China's WTO performance given by the U.S. Trade Representative, Susan Schwab, was far less rosy. "The record is profoundly mixed," she wrote in the Financial Times on Monday, days before she and other senior U.S. officials hold a "strategic dialogue" with their Chinese counterparts. "As part of this dialogue, we will clearly convey our view that a slowdown in reform hinders China's development and undermines the health of our bilateral ties," Schwab wrote. When it joined the trade group, China agreed to dramatically widen foreign investors' access to banking and other financial services as a part of a five-year schedule of promised reforms. Last month, China issued rules to let overseas lenders conduct retail banking nationwide, but foreign bankers fear Beijing will drag out approvals to give Chinese banks more time to get ready to face the competition. The two countries' contrasting assessments of China's WTO performance highlight the disputes that are likely to dominate when U.S. Treasury Secretary Henry Paulson leads senior Washington officials to Beijing for the talks starting on Thursday. Schwab laid out a series of gripes that Washington regularly raises with China, especially poor protection of patents and copyright, allowing rampant piracy of U.S. films, music, software and other goods. She wrote that China was using industrial policies to limit imports and shield domestic businesses. FORMAL COMPLAINT? Washington has said it may even formally complain to the WTO about China's rules on punishing intellectual property theft. And U.S. lawmakers are pushing for punitive tariffs on Chinese goods unless Beijing loosens exchange rate controls and allows the value of the yuan to rise, making Chinese exports more expensive. They say Beijing's exchange rate tethers are fuelling the U.S. bilateral trade deficit with China, likely this year to pass last year's record $202 billion. "The United States believes China can do more to reduce its trade surplus. We are encouraging China to introduce greater flexibility for its currency," Paulson wrote in a commentary in the Washington Post on Monday. But in a volley of official commentaries and statements on Monday, Chinese officials championed their trade policies, citing praise from the WTO's top official, Pascal Lamy. "China has shown the bearing of a responsible great power, and the WTO Director-General Lamy has awarded it a top grade of A-plus," according to the People's Daily, the official mouthpiece of China's ruling Communist Party. Since joining the trade watchdog, China has cut its average tariff for industrial goods from 14.8 percent before accession to 9.1 percent in 2005, and the tariff for farm goods has fallen from 23.2 percent to 15.4 percent, China's Ambassador to the WTO, Sun Zhenyu told the Xinhua news agency. More than 700 trade-related laws and regulations have been abolished, he added. The president of China's Stock Exchange Executive Council, Wang Boming, said in Beijing on Monday that since China joined the WTO, the country had made huge reforms in sectors such as banking, where three big state lenders had been listed. "The result has been win-win for all the parties involved in the WTO accession," Wang told a meeting. Keith Rockwell, spokesman for the Geneva-based WTO, told Reuters that China had done well, considering its size, developing economy and the tough reforms demanded. "An enormous amount was asked of China, and I think everyone would agree that they made a considerable effort and have done well," Rockwell said. In China, some experts and even officials have openly questioned the country's trade liberalization, warning that foreign competitors may overwhelm local companies and products. But the official who led China's negotiations into the WTO, Long Yongtu, said the country need not fear more liberalization. "The more the country opens up, the safer and more advanced we will be," Long, now secretary-general of the Boao Forum, told Xinhua. (Additional reporting by Alan Wheatley and Tamora Vidaillet)
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