The two-China tango

11/27/2001

China's quest for entry into the World Trade Organization finally bore fruit when the organization decided to admit both China and Taiwan. There was a time when admitting two Chinese nations to the same international body would have been virtually unthinkable. But times change.

The two countries are still at loggerheads. When the WTO was voting on Taiwan's membership, China sought to push its smaller Asian neighbor out of the headlines by scheduling its formal signing ceremony and a news conference at the same hour. In the for-what-that's-worth department, such a gesture is not worth much, but the Chinese have been waiting a long time for this moment.

One economist said that China's long entrepreneurial tradition has been tied down for a long time by an overregulated, authoritarian system. “A sleeping giant” was the term he used for China.

However, even though the sheer size of China's economy will make a difference in the world picture, many business firms from around the world have found it difficult to do business with Beijing.

Of the country's estimated 1.2 billion people, only about one in six lives in anything remotely approaching a first-world economy. Most of its consumers are in the urbanized areas near the coast. The interior is hard to reach and is not an easy market to crack. And, as visitors to China frequently have noted, the sweat shop conditions under which most Chinese work are not enviable. In fact, to call them sweat-shop conditions may be an undeserved compliment.

With Japan's economy mired firmly in a deep recession, China hopes to make gains on the rim of East Asia and elsewhere. It already has a huge market in the United States, and many of us buy Chinese products without much regard to the conditions under which they are manufactured.

The world has changed drastically since the Osama bin Laden terrorist gang delivered its blow to the United States on Sept. 11. China has cooperated to some degree with the U.S. anti-terrorist effort, or at least it has not made very much mischief in this regard.

Taiwan, by almost any standard, deserves full membership in the WTO, which attempts to harmonize world trade. China's huge population and its very size make it difficult to ignore. Certainly, there would have been no support for Taiwan without concomitant membership for China. However, WTO members should bring along with them a very long set of chopsticks when they sit down to dine and discuss trade topics with that sleeping giant.