China marked five years of World Trade Organization (WTO)
membership on Monday with new regulations opening the financial
sector to foreign banks coming into effect, while business people
and economists counted the pros and cons of freer trade.
Once branded a "threat to financial security," the entry of
foreign banks into Renminbi business has sparked curiosity about
what new products and services will become available to Chinese
customers and whether new management mechanisms will affect the
market.
"The introduction of competition and strategic investors will be
conducive to improving innovation, management and profitability of
domestic banks," said Wang Zhaoxing, assistant to the chairman of
the China Banking Regulatory Commission.
Three of China's leading four state-owned commercial banks --
the Bank of China, China Construction Bank and the Industrial and
Commercial Bank of China -- have listed overseas. Their shares have
been well received, signaling confidence in the development of
China's banking industry.
The prediction that "free trade will come with threats," made by
Long Yongtu, China's chief negotiator for WTO membership five years
ago, has been replaced by awareness of the fact that threats failed
to come, but free trade has been difficult to achieve too.
WTO statistics show China has been subject to most of the
international anti-dumping litigations for 11 consecutive
years.
China's textile businesses had barely escaped the old quota
system before they entered a "new quota era" imposed by the United
States and the European Union, a move seen by the Chinese side as
protectionism.
The Wujiang Canhua Import and Export Co., Ltd., based in Jiangsu
Province, was subject to anti-dumping actions by the EU. It lost
export orders worth more than US$8 million, or 30 percent of its
total annual exports.
"This means we virtually lost the whole European market. More
than half of our workshops suspended production," said General
Manager Gu Yiming.
But Chinese companies have overcome the hurdles and matured.
"We must learn and adapt to the rules of game," said Wu
Xiaodong, head of the Changzhou Floor Board Association, also based
in Jiangsu.
Wu is awaiting final verdicts by the United States International
Trade Commission on actions by three US companies against the
association.
When Wu took up the post a one year ago, he knew nothing about
US trade law, but recently his association has been winning
lawsuits.
"This is WTO membership. It can bring opportunities, barriers
and mechanisms for solving disputes," Wu said.
WTO accession has also made a difference to people's lives.
Foreign travel and exotic items are now on Chinese consumption
indexes. Foreign-currency financial services and personal
investment products linked to overseas capital markets are no
longer unimaginable.
"It is not yet time to calculate gains and losses of WTO
membership," said Gao Heyun, head of the Jiangsu Research Institute
of Foreign Trade and Economic Cooperation. "What we should do is to
fulfill our WTO commitments in a better way and open wider at a
quicker pace."
(Xinhua News Agency December 11, 2006)