BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Friday, 28 December, 2001, 07:05 GMT
US normalises trade with China
Electronics production line
China's biggest export - its highly competitive, low-cost labour force
After years of carrot-and-stick games with trade terms, the US has finally granted China permanent status as a normal trading partner.

President George W Bush signed a proclamation setting the decision in stone from 1 January 2002 at his ranch in Texas.

The move follows a Congressional vote last year ending an annual ritual of confirming trading rights, despite strong opposition from human rights groups and unions.

In previous administrations, normal trading - confusingly dubbed "most favoured nation" status despite referring to the vast majority of trading partners - was contingent on advances in human rights, or concessions on import opportunities to China.

But China's accession to the World Trade Organisation, which brings a package of market-opening concessions, sealed the switch to unconditional relations.

The deal under which China joined the WTO was at least as good as any the US has negotiated itself, according to both the US administration and Congress.

Tariffs in China on US-made goods are set to fall from an average of 25% to 9% by 2005, with duties on farm products dropping to 14% from 31%.

Open up

In a statement, the White House said the proclamation marked "the final step in normalizing US-China trade relations, and in welcoming China into a global, rules-based trading system".

It also pointed to what it said could be billions of dollars in new trading opportunities for US companies.

Aircraft maker Boeing, for example, said it was delighted.

"It's a great moment for us, because it allows a normal steady relationship with a huge market," said a spokesman for the company.

China's trade surplus with the US currently stands at $80bn a year.

But next year could be less rosy for China, its officials have admitted.

Foreign Trade Minister Shi Guangsheng told the China Daily newspaper that foreign trade could be in a "grave situation... shrouded with uncertainties".

"A declining world economy could have a worse impact on China's foreign trade than the 1997 Asian financial crisis, he said.

Despite predictions that trade will reach a record $500bn in 2002, export growth could slow to 5% - slower than the forecast import growth of 8% after this year's breakneck 27.8% expansion.

See also:

27 Dec 01 | Business
China publishes WTO terms in Chinese
21 Dec 01 | Business
Japan and China settle trade row
13 Dec 01 | Business
China firms 'fake' profits
13 Dec 01 | Business
China: an economic super power?
12 Dec 01 | Business
China grants insurance licences
12 Dec 01 | Business
Oil giants to sell petrol in China
Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories