The battle within the US over China's membership of the World Trade Organisation continues to heat up.

The US business organisation, the National Association of Manufacturers, has pledged to make US Congressional approval of Chinese membership of the WTO its top priority.

US companies hope that by bringing China under the rules of the international trade organisation it will gain greater access to China's market of more than one billion people

China also wants to join the WTO, which would ensure that it would be able to sell its products freely in the United States and other Western countries.

But the deal, negotiated in November and endorsed by President Clinton, faces opposition from both political parties in Congress - especially in an election year.

Republicans are upset by China's alleged nuclear spying, while Democrats object to China's human rights record.

The political temperature has been raised by the failure of the World Trade Organisation to launch the new trade round in Seattle in December.

The talks were disrupted by demonstrations by trade union and environmental activists who argued that the WTO was undemocratic and unaccountable.

China negotiates with EU

Meanwhile, China still has to complete negotiations with the European Union over the terms of its accession to the WTO.

Talks will resume in Brussels on 25 January, with the EU looking for further concessions from China on trade and investment.

China needs to reach agreement with all members of the WTO before it can be accepted into membership, but after the US deal the EU is the main remaining hurdle.

Areas of concern to the EU include telecommunications, particularly mobile telephones, and tariffs on products like wine.

"We would like to have an agreement ... But we don't want to sacrifice substance for speed," EU Foreign Affairs Commissioner Chris Patten said.

Inward investment falls

Uncertainty over the climate for foreign investment in China has taken its toll.

Last year foreign investment in China fell by 12% to $40bn, while foreign direct investment, involving companies directly investing in new factories, was down 25%.

Investors were scared off by the possibility of currency devaluation, uncertainty about the solvency of Chinese partners and lingering effects of the Asian financial crisis, the China Economic Herald said.

Investor confidence is still suffering from concerns over the ability of Chinese borrowers to pay back foreign debt, after the bankruptcy of a provincial government investment firm, which owed billions of dollars to foreign lenders.

Some foreign investors have also been waiting for China to gain entry into the World Trade Organisation, a step that would require Beijing to dismantle many protective barriers that frustrate foreign businesses.