Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Monday, October 18, 1999 Published at 07:14 GMT 08:14 UK


Business: The Economy

Eastern promise comes West

Beijing has been working hard on economic reform

Not since giant pandas Ching-Ching and Chia-Chia arrived at London Zoo in 1974 has the UK given such a warm welcome to such an important Chinese visitor.

Much like the reception given to the furry star guests 25 years ago, President Jiang Zemin's stay will be carefully organised and much-photographed.

This visit, just like the earlier one, symbolises a thaw in relations between the two countries.

But, unlike the pandas, President Zemin will have more on his mind than his comfort.


[ image: China celebrated its 50th anniversary this year]
China celebrated its 50th anniversary this year
China, the world's tenth-largest trading nation, has been campaigning for 13 years to be admitted to the World Trade Organisation, the body which sets the rules on international trade.

So the president has every reason to make a favourable impression. The country's leaders have been making strenuous efforts to bring about economic reforms - and show them off in an effort to win a seat at the WTO.

But organisation members have insisted the country open up its markets to international competition first.

America, rather than Britain, has been dragging its feet over allowing China entry. Prime Minister Tony Blair received the red carpet treatment on a visit there last year, and Chinese leaders hope he can persuade President Clinton to relent.

World competition for the country's exports is high so there are incentives on both sides to allow China in.


[ image: China's rural poor could benefit from trade agreements]
China's rural poor could benefit from trade agreements
From the UK's point of view, entry would be highly lucrative.

China - which has the largest population of any country in the world - is considered a massive market for exporting goods.

There is a huge exports imbalance: only 1.8% of American exports (about $14.3bn) and 0.5% of UK exports go to China.

But the US imports about five times as much from that country a year.

Trade with China dropped off sharply after the Tiananmen Square massacre in 1989 but has built up again.

Relations were also boosted by the UK's handing over Hong Kong to China in 1997.

But they were dealt a blow by the accidental bombing of the Chinese embassy in the former Yugoslavia in May and the on-off talks over China's membership were suspended.


[ image: The West wants China to open up to more competition]
The West wants China to open up to more competition
Negotiations have resumed again but concerns over human rights issues remain, particularly among international campaigners. They would not want to see China offered any favours without making progress, especially on the occupation of Tibet.

China has ostensibly made progress in welcoming foreign investment; in reality it has done itself few favours.

Last year, foreign investments in mobile phones were banned and industries such as iron, steel, coal and building materials faced a fresh clampdown.

More recently, Beijing has banned foreign investment in the Internet.

But Western and Chinese trade relations are by no means dead.

Last year, there were more than 2,000 joint ventures between firms in the two ideologically-opposed countries.

And each time a new deal is signed, ministers hail the increasing co-operation.


[ image: In an age of rapidly-expanding technology, China still has some old-fashioned habits]
In an age of rapidly-expanding technology, China still has some old-fashioned habits
Trade Minister Richard Caborn said last month during a trip to the city of Xiamen: "My visit has demonstrated that opportunities, and a large number, exist. Indeed, through meetings with my Chinese opposite numbers, it is quite clear that China wants foreign investment."

UK businesses, such as BT, believe membership would open up vast opportunities.

And earlier this year Manchester United began selling merchandise there.

For millions of ordinary people, events such as this and the arrival of giant pandas may be more exciting than endless rounds of trade organisation negotiations.

But if an agreement is pulled off, it could be worth millions - or even billions - of pounds' worth of trade for the West, supporting jobs and industry - and give China the satisfaction of winning a long, lonely campaign.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents


Relevant Stories

16 Oct 99 | UK
UK prepares Chinese charm offensive

29 Sep 99 | The Economy
China says WTO deal near

15 Sep 99 | The Economy
China bans Internet investment

12 Sep 99 | The Economy
US-China trade talks resume

26 Aug 99 | The Economy
China to rejoin WTO talks

23 Aug 99 | The Economy
China bans new investment

19 Aug 99 | The Economy
China proves fragile investment

21 Jul 99 | The Company File
Reds target China

16 Jul 99 | The Economy
China's economy slowing down

09 Jul 99 | The Economy
WTO boost for China

01 Jul 99 | The Economy
Asia's crisis: The country breakdown

04 Jun 99 | The Economy
Clinton's China trade pledge





Internet Links


US Trade Representative

World Trade Organisation

China.com


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree