China starts its next revolution The Chinese may not realise how much industry, and institutions, must change after yesterday's entry to the World Trade Organisation
John Gittings in Hong Kong Wednesday December 12, 2001 The Guardian China formally joined the World Trade Organisation yesterday, a move seen by many as the biggest revolution since the communist victory half a century ago. Press and TV hailed it as a "great day for China", with some predicting that this "opening to the outside world" would lead to social as well as economic reform. But officials were at pains to warn that China would not have an easy transition: there would have to be radical changes to commerce, agriculture and the legal system. "Most people in the cities just hope that prices of imported goods will get cheaper," a WTO researcher in Shanghai said. "Everyone's waiting for the day when they can buy a car. They don't think about what the effect may be on workers' jobs or on peasants in the countryside." China's entry follows 15 years of negotiations. Its leaders hope that more investment and more exports will flow from WTO membership, as foreign manufacturers are lured by cheap labour and the country's vast internal market. In return, China is meant to open up its financial, retail and telecommunications markets during the next five years and to cut tariffs. But for the ordinary person, many details have remained obscure. The foreign trade ministry finally released the English version of the WTO agreement on its website yesterday, but is still working on a Chinese translation. The site crashed as hundreds of thousands logged on for details. The government also hopes that WTO entry will force a massive shake-up in inefficient state industries. Yet this week it announced a plan to create 50 new state-owned companies to seek capital overseas and try to compete in the world market. Whether reforms will reach the local level is another huge question. "China has a lot of work to do: government and industry will have to learn new rules," the former chief negotiator for WTO membership, Tong Zhiguang, said at a Shanghai seminar last week. "We have obligations to honour as well as rights to enjoy." Companies will have to meet world standards. "It won't be enough just to cut prices." Beijing admits that millions of farmers will be hit by cheaper imports, particularly in bulk products such as cereals. They are being urged to increase quality. And the legal system will have to be transformed to meet WTO requirements, the president of the supreme people's court, Xiao Yang, warned yesterday. Younger Chinese hope that WTO entry will lead to more democracy. "In the long run, China can't operate in the world economy if its political system lags behind", said an MBA student this week in Shanghai.
