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To: JMD who wrote (26541)	4/9/1999 12:35:00 AM
From: Ruffian	Respond to of 152472

And China will be a problem> Friday April 9, 12:07 am Eastern Time INTERVIEW-WTO deal would help push China reforms HONG KONG, April 9 (Reuters) - China's drive to shake up its backward state monopolies and improve efficiency would be boosted if it can gain entry into the World Trade Organisation (WTO) this year, a prominent China-watcher and economist said on Friday. Beijing could use WTO membership to whip sluggish state-owned firms into action, Andy Xie of Morgan Stanley Dean Witter told Reuters Television in an interview. ''It will provide an anchor for China's domestic reforms. It is becoming increasingly difficult to break down monopolies in the state sector and an agreement with the United States will anchor China's reforms in an international agreement,'' Xie said. U.S. President Bill Clinton and Chinese Premier Zhu Rongji said on Thursday substantial progess had been made on bringing China into the WTO although more time was needed to complete the deal. Xie said he was ''quite confident'' a deal permitting China to enter the WTO, 13 years after it first applied, would be struck this year. Although agreement has been reached on a broad range of issues such as agriculture, aviation, insurance and telecommunications, differences remain on banking, securities, the audio visual sector and textiles. Xie said agreement reached so far between both countries would hurt some Chinese industries by giving greater market access to international firms, but he said China would benefit at the end. ''Some companies will be hurt, the telecommunications, energy, aviation, finance sectors. But in the long-term, it will be better for everybody because competition always brings out the best for all,'' Xie said. ''For those which are lazy and not doing their best...Mr Zhu Rongji can always tell them that if you don't improve, American companies are coming and you'll probably lose out.'' Xie said an agreement between Beijing and Washington to allow joint ownership ventures in the banking sector with full foreign ownership becoming legal after five years would power China's own drive to clean up its banking industry. ''The job is huge and the financial system has a lot of non-performing assets. This would be another incentive to push forward with financial reforms to clean up the banking sector.'' Hong Kong would benefit if China joins the WTO. ''The main benefit for Hong Kong is that the trading environment will be more stable. MFN (most favoured nation status) renewal by the U.S. would be automatic. Therefore Hong Kong's role as a transshipment centre for China would become more stable in the future,'' Xie said. Related News Categories: US Market News