GENERAL NOTICE TO CHINA WATCHERS........
LGOV, CAOL, HRCT, XNET and others may start to really fly now.....!!
ABCNEWS.com
B E I J I N G, Nov. 15
Chinese and U.S. negotiators signed a breakthrough agreement today that removes trade barriers and clears the biggest hurdle to China's entry into the World Trade Organization, a milestone that will throw open a vast market of 1.2 billion consumers to unprecedented access by foreign firms.
U.S. Trade Representative Charlene Barshefsky and China's trade minister, Shi Guangsheng, signed the agreement after six days of grueling negotiations. Shi hailed what he called a '..win-win..' agreement and said he hoped China could join the WTO this year.
The deal sent stock prices in Hong Kong soaring to their highest level in more than two years. It also brought congratulations from neighbors like Japan and South Korea as well as the Geneva-based WTO.
"I have said many times that we are not a world trade organization until China has joined," said WTO Director-General Mike Moore.
Highlights of China-U.S. WTO accord
Following are highlights of today's agreement between China and the United States paving the way for China's entry into the World Trade Organization (WTO), as stated by U.S. officials.
AVERAGE TARIFF LEVELS: China agreed to cut its average tariff level to 17 percent from 22.1 percent.
TELECOMMUNICATIONS: China will allow 49 percent investment by foreign telecom providers from the date of accession, with the figure increasing to 50 percent after two years.
INTERNET: U.S. companies will be allowed to invest in Chinese Internet content providers.
AUTOS: China will cut its import tariffs on automobiles to 25 percent from current levels of between 80 percent and 100 percent by 2006. U.S. firms will be allowed to provide auto financing in China.
BANKING: Foreign banks will be able to conduct local currency business with Chinese enterprises two years after China's WTO entry and retail business five years after entry.
AGRICULTURE: China agreed to cut import tariffs on agricultural products to between 14.5 percent and 15 percent and establish tariff rate quotas for wheat, corn, rice and cotton, with a substantial share reserved for private trade. China also agreed to phase out state trading of soy oil.
EXPORT SUBSIDIES: China will eliminate export subsidies.
DISTRIBUTION: China will allow distribution rights for U.S. exporters.
Reuters
(..do-nothing..) Clinton Hopeful (..to take undeserved credit..)
According to WTO rules, the U.S. Congress must grant Beijing so-called Normal Trade Relations before Washington can gain the benefits of China?s more open markets within the WTO.
U.S. President (..not for long..) Bill Clinton pledged an all-out effort to secure congressional support.
"The China WTO agreement is good for the United States, it's good for China, it's good for the world economy," he said during a visit to Turkey.
"Today China embraces principles of economic openness, innovation and competition that will bolster China's economic reforms and advance the rule of law," he said.
"In opening the economy of China, the agreement will create unprecedented opportunities for American farmers, workers and companies to compete successfully in China's market, while bringing increased prosperity to the people of China," Clinton said (..as he read from a paper prepared by a staffer who copied it from some media wonk..).
Demands on China
A U.S. statement said China agreed to reduce its average import duties to 17 percent from 22.1 percent. Export subsidies will be eliminated and tariffs on farm goods will come down.
U.S. firms will be granted access to China?s distribution networks, and auto companies will be permitted to offer vehicle financing. In addition, Washington has demanded that China submit to quotas on textile shipments and anti-dumping measures to prevent surges in low-cost exports.
The deal will also benefit banks, insurers and telecom companies, the statement said without elaboration.
Urgent Deadline
The agreement removes a major hurdle to China's 13-year bid to join the WTO, world trade?s rule-making body. China now needs agreements with other key trading partners, particularly the European Union, in order to become a WTO member. Negotiators raced against the clock to hammer out a deal to try to secure China's WTO entry before a November 30 deadline, when ministers of its 134 members meet in Seattle to launch a new trade round.
Although China still needs separate agreements with the European Union and other key trading partners, and significant differences remain to be bridged in those talks, diplomats in Beijing say others will fall into line behind the Americans.
U.N. Secretary-General Kofi Annan, who is visiting Beijing, said in a statement released in New York today that he hopes the agreement will pave the way for China's quick entry into the WTO.
"This is a major step toward the culmination of China's long-standing efforts to resume its rightful role in the multilateral trading system, and to the achievement of universality of the system itself," the statement said.
Benefits and Drawbacks
WTO membership will bring benefits and drawbacks to China.
WTO membership will force fundamental changes to China's state-run economy by introducing fiercer competition from abroad.
U.S. and other non-Chinese firms would be able to sell products and services directly to Chinese consumers, giving them greater choice at cheaper prices. But unemployment, already running at 8 percent in cities, will swell short-term as state factories and small family farms fail. It will also run the risk of rising social turmoil as indebted state factories go to the wall, throwing millions out of work.
If the deal can be steered through Congress it will be a major victory for Clinton (..desperate to try and upstage Nixon..), who was eager for a breakthrough trade pact with China to help secure his (..tarnished and soon forgotten..)legacy.
Failure almost certainly would have been a devastating blow to China-U.S. relations, now in a fragile recovery following the bombing by U.S. aircraft of the Chinese embassy in Belgrade in May.
Reuters and The Associated Press contributed to this report.
China Stock Markets Seen Gaining
U.S. businesses in China expressed immediate delight at news of a deal and predicted that U.S. companies would invest more once China is bound by the WTO?s trade rules. The deal would lead to increased trade that will benefit both countries, they added.
"Implementation of WTO standards will reduce many of the distribution and regulatory hardships that U.S. businesses now face in China," said John Sullivan, vice chairman of the American Chamber of Commerce in China. "That means more growth potential for American companies and creation of more jobs back home."
Chinese stocks are expected to rise in the short term, analysts said. But the agreement could also bring long-term pain to many listed companies, they said.
"It is absolutely a major positive factor to the stock market both in the short-term and long-term,? said Zhang Lei, a senior manager at Shenyin & Wanguo Securities. ?It will benefit traditional sectors, including textile and trade companies, in the near term."
Analysts said Chinese textile firms would benefit as the United States and other countries eased quotas. Several textile issues surged on the Shanghai and Shenzhen stock markets today in anticipation of a deal.
Both trade and transport companies would also gain from the increased traffic that the deal would bring, analysts said.
But lumbering state firms in formerly heavily protected sectors, such as chemicals and steel, would now have to face the music of greater competition, analysts said.
"The general view is short-term gain, long-term pain as it helps to create more competition," said an analyst at a foreign securities firm in Shanghai of WTO membership.
China's bid to join the organization will also give a boost to foreign banks and insurers in the Chinese market, but the gains will be gradual, businessmen said today.
China has agreed to let foreign banks handle local currency business for domestic companies after two years but it cannot open the market wider just yet because of a weak financial and regulatory system, they said.
"It won?t make a huge difference in the immediate period, but it will allow an eventual opening in banking as well as insurance," said a Western banker. |
