Dmitry Litvinovich: Fifteen years of Chinese struggle

China will officially become a member of the World Trade Organization on Tuesday. It took Beijing 15 years to achieve that. China will get the membership in the largest trading organization a month after 142 WTO members formally ratified the Chinese application to join them and then Beijing officially confirmed, it was ready to fulfil the conditions and terms of the annexation.

This was preceded by long and complicated negotiations between China, the USA and the EU, at which Beijing had to prove that China was doing a lot in order to open its economy for the international competition. The program of the state subsidies for the agriculture became a stumbling block. As it is known, it is one of the basic conditions for the new countries to join the WTO. China was totally against cutting or changing it. The Chinese authorities claimed, they have made enough concessions, having agreed not to use the export subsidies. The WTO administration did not have a common opinion, if to consider China a developed or developing country. If it is a developed state, then the amount of the state agricultural subsidies is not supposed to exceed 5%. If it is a developing state, then the subsidies may reach 10%. For the time being the level of the state subsidies in the field of agriculture in China makes up only 2%, but China is insisting on the right to raise them any minute. The USA, Australia, Canada and Brazil are the opponents of this idea. Other issues, on which the WTO members do not have a joint opinion, are: the sales of services, funding the industrial manufacture, the rights of the foreign trading companies on China’s territory and the Chinese import control system.

The crucial moment came in November of 1999, when the American congress approved the trading contract, signed by China and the USA. The membership in the WTO is not a caprice for China – it is a vital need. This membership will give a powerful push for further development of the reforms in the country, and China is longing for it. This is a sales market for the Chinese goods and therefore – the development of the competitive branches and the new jobs. But there is also the reverse of the medal, and one should bear it in mind. According to the WTO rules, all the restrictions, working on the market of capitals, must be removed. Furthermore, the import goods and foreign companies must have an easier access to the Chinese market. The whole industrial branches will be reformed, which may result in the sudden increase of the unemployment level.

China has already agreed to cancel the migration rules for its citizens. The foreign companies will be rendered a right to arrange joint ventures - even in such fields as mobile telecommunication, insurance and banking business.

Nevertheless, everything is not as bad as it may seem at first sight. China’s membership in the WTO implies the foreign investments in the Chinese economy. Besides, taking account of the patriotism and discipline of the Chinese people, one may say that the Chinese economy is not threatened with the reduction of the purchase requirement on the home goods. The party took care of its producers.

Russia will become a member of the World Trade Organization in two years. These two years must not be spent in vain. We have to try to gain as much of concessions as possible, so as not to find ourselves among the countries of the third world, which did not get the equal rights even after they joined the WTO. Fifteen years of negotiations - this is something. Let’s not hurry.

Dmitry Litvinovich PRAVDA.Ru

Translated by Dmitry Sudakov

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