China Closer To WTO Entry

Following a breakthrough intervention by China's premier, senior U.S. and Chinese trade negotiators held a flurry of talks Saturday, moving toward an agreement to bolster Beijing's entry to the World Trade Organization.

The negotiations were billed as China's best chance to break a half-year stalemate and clear the biggest hurdle in its 13-year bid to join world trade's rule-making body. Talks verged on collapse after three days until Chinese officials set up Saturday's meeting with Premier Zhu Rongji.

U.S. Trade Representative Charlene Barshefsky had a "productive" session with Zhu inside the Communist Party leadership compound, her spokesman Tom Tripp said.

Afterwards, she went twice to the Chinese Ministry of Foreign Trade and Economic Cooperation for discussions with trade minister Shi Guangsheng on opening China's relatively closed markets.

Although both sides declined to reveal details, the Zhu meeting "set off a high-level of activity. That's a good sign," said a Western diplomat on condition of anonymity.

Pressure has been building on both governments to come to terms on a market-access agreement, a precondition for joining the WTO. China must negotiate a similar pact with the European Union next week.

All sides are facing a self-imposed deadline of Nov. 30, when the 134-member WTO considers new global trade liberalization. If those talks are launched, Beijing could be shut out of the Geneva-based group for months - if not years - and would have no say over the new rules.

By intervening in Barshefsky's talks with Shi, Zhu gave one of the surest signs that he and other reform-minded Chinese leaders have regained the offensive. In four sessions over three days, Shi had shied away from significant concessions in sensitive service sectors - a key U.S. demand.

Zhu and other reform-minded Chinese leaders believe WTO membership will prod reluctant state industries and their political backers into making the government-ordered changes they have resisted for nearly two years.

WTO membership will force China to abide by a set of trade rules and allow U.S. and other foreign companies to sell goods and services directly to the blossoming Chinese middle class. Tariffs and other barriers to trade and investment would fall.

Chinese consumers will immediately benefit, gaining access to everything from cheaper cars and better phone service. Foreign investment will boost economic growth and create needed jobs. Industries pampered under central planning will be forced to change or whither under the competition.

"The success of my country's 20 years of reforms has largely, almost all of it, been due to learning modern methods from abroad," said Mao Yushi, an economist with Unirule, a Beijing-based think tank and consulting firm. "We have not only benefited from technology, but even more from the market system."

Written By Charles Hutzler