Long wait over as China joins the WTO

BEIJING, China -- China has ended its 15-year quest to join the World Trade Organization and will officially become a fully-fledged member of the international trading system on Tuesday.

China's membership follows a meeting of 142 members of the WTO in Doha, Qatar a month ago which ratified its application allowing Beijing to formally approve the deal.

Much wrangling and negotiation has taken place as China sought to assure trading partners, particularly the U.S. and the European Union, that enough reforms were taking place to open up its economy.

International investors have been waiting expectantly for the opening of potentially the world's largest market of 1.3 billion. China, on the other hand, is hoping that increased integration will assist its transition to a market economy.

Beijing said it would abide by its WTO commitments and send delegates to WTO headquarters in Geneva, Switzerland, state-run media said on Tuesday.

"China will enjoy all the rights the WTO gives to other members, and will observe the WTO regulations and its obligations to the organization," a trade ministry official said in a Xinhua news agency report.

Concern over pledges

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It has been a major year for China.

Entry into the WTO follows Beijing winning the right to host the 2008 Olympic games and Shanghai staging the Asia Pacific Economic Cooperation leaders summit.

Optimism the WTO membership would usher in a new era of reform for the communist state has been tempered by concern from trading partners about China's ability to meet WTO pledges.

Chinese Premier Zhu Rongji has told officials to prepare for wrenching but crucial reforms and warned them to toe the line in carrying out Beijing's commitments.

In remarks carried by state media on Monday, Zhu said China needed to join the global trade group to boost the livelihood of Chinese, but said it would come with a price.

"WTO entry is a necessary choice for promoting China's continued rapid and healthy economic development," Reuters news agency quoted him telling local and central government officials.

"We must realize some industries, enterprises and products will inevitably suffer in the short term. Whether the benefits outweigh the disadvantages will depend on our work."

Critical time


WTO entry will integrate China further with the world economy

The end to China's 15-year quest to join the world trade body comes at a critical time, with the country's economic juggernaut faltering as the slowing world economy hits its exports.

Growth might slow to its lowest level in more than a decade, below the crucial seven percent needed to create jobs for tens of millions being thrown out of work by streamlining the state sector, analysts have told Reuters.

"Next year is the first year for WTO entry and we are facing an extremely serious international economic environment. Doing well on economic work next year is very important," Zhu said.

China's trading partners fear if the economic situation worsens Beijing could pull back on WTO commitments.

"I don't think anyone expects compliance will be to the letter and on time in every respect. Political realities will impinge from time to time," Michael Spencer, chief Asia economist for Deutsche Bank in Hong Kong, told Reuters.

Keeping its word

WTO entry will integrate China further with the world economy, helping cement reforms put into motion when the country opened its doors in 1978.

It will also allow China to expand trade, attract more foreign investment and give private firms a greater role in the economy, analysts say.

But local officials, ignorant of WTO rules or deliberately trying to protect domestic firms, could be the biggest obstacle preventing China from keeping its promises.

China has yet to publish the full text of the WTO agreement, leaving many in the dark on the precise pledges.

A nationwide poll of Chinese by the official Xinhua news agency found 55 percent of respondents had little or no understanding of WTO.

Zhu told local officials they must become familiar with WTO rules as soon as possible and toe the line on implementation.

"China is a country which keeps its word. We must earnestly implement our pledges," he said.