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A cautious China to host, negotiate crucial WTO talks

Analysts say Beijing will take a quiet approach as it lobbies vital issues at Hong Kong summit

A cautious China to host, negotiate crucial WTO talks

In the four years since joining the WTO, China has carved out a powerful role for itself as the world's factory floor, a shining example for developing countries on the potential benefits of global trade.

Yet when China hosts a crucial meeting of the World Trade Organization in Hong Kong from December 13 to 18 it will almost certainly not flex its newfound economic muscle, favoring instead a quieter, even guarded approach.

To some it may even appear that China is deferring to others - particularly emerging economic giants such as India and Brazil or established powers like the European Union and the United States.

Center stage is not Beijing's preferred position.

Analysts said China will negotiate hard to ensure its strategic economic interests are protected but probably from the sidelines of the meet when 148-member states will attempt to push forward the Doha round of trade talks.

"Chinese diplomacy has always been more active in bilateral negotiations," said Guiheux Gilles, director of the French center for Research on Contemporary China.

Even from that vantage point many also argue that Beijing is still a tyro in the WTO arena and its comparative weakness to its two largest trade partners - the EU and the U.S. - means it must take a non-confrontational tack.

This could matter if China is to live-up to the stance advocated by U.S. Trade Representative Rob Portman who wants to enlist Beijing's help in convincing the European Union into doing its part in breaking down trade barriers.

The Doha round began in the Qatari capital in 2001 and stalled in Cancun Mexico two years later mainly over European agricultural subsidies.

But Li Yueyin, a trade expert at the Shanghai WTO Consulting center, says China's clout is restricted amid growing signs of protectionism after temporary quotas were introduced this year in the EU and U.S. to limit Chinese textile exports.

"China is the world's third largest trader, it is an important country, it is a major trading country but it's not a major world power," Li said. "China as a new (WTO) member does not have much negotiating power."

In recent months, world leaders have played down the chances of pushing forward negotiations in Hong Kong to allow a Doha conclusion by the end of 2006.

Instead, success in the Chinese enclave is being defined through brokering a trade deal and access to markets which will help alleviate poverty among poorer members while safeguarding protected agricultural markets in the West.

Prior to China joining the WTO, when its trade with the rest of the world totaled only some US$510 billion, the Asian giant had always championed the cause of developing and third world nations.

It's a point still not lost on Chinese Foreign Minister Li Zhaoxing who recently stressed the importance of developing countries in the WTO and implied bilateral, as opposed to universal, negotiations could dominate the agenda.

"China is a member of the developing world and also a member of the WTO so we will work together with other parties to seek more progress," he said.

"We hope that the WTO round in Hong Kong will be of a constructive nature and bring benefits to the members of the WTO, particularly the developing members."

But as Beijing's trade with the globe climbed to US$1.2 trillion in 2004, the public rhetoric has also taken on the overtones of a country keenly interested in freer trade on a much wider stage.

In October Chinese President Hu Jintao called on WTO members to "display greater political sincerity and demonstrate the necessary flexibility to vigorously push forward the Doha round.

"We should energetically support the establishment of an open, fair, reasonable and non-discriminative multilateral trading system," Hu said.

The Chinese leader's sentiments were echoed by Portman.

"China and its neighbors in Asia have as much to gain as anyone from a successful Doha round because these countries in the Pacific Rim and China trade substantially," Portman said in Beijing last month.

"That's why we need their voice at the negotiating table to push for an ambitious and successful result in the Doha round."

But whether or not Doha can be pushed forward or a deal struck for developing countries, Li Yueyin pointed out that the focus for China like all WTO members would remain self interest.

"After all, the biggest contribution China could actually make is to continue developing itself," said Li.

Updated : 2021-07-24 01:23 GMT+08:00