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Manufacturers, Exporters, Wholesalers - Global trade starts here.
China Improves Int'l Trade Rules for Rural Development

Four years after its accession to the World Trade Organization, China is striving to play an active role in improving international trade rules to protect its vulnerable agriculture, among others.


"We've set the target of building a socialist new countryside, which aims to raise the efficiency of agriculture and the income of 900 million farmers," said Chinese Vice-Minister of Agriculture Niu Dun at the sixth Ministerial Conference, which ended on Sunday.


The "new countryside" policy, advocated by the Communist Party of China, is expected to activate the country's rural market and speed up social and economic building-up there, which lags far behind the booming urban areas.


"To do so, we have to turn our eyes to the international market in the process of globalization," Niu said.


China has fulfilled its commitments to the international trade regime and witnessed soaring trade of agricultural products, which hit US$51 billion in 2004, up 84 percent as against 2001 when it joined the WTO.


China also cut its overall agricultural tariff from 54 percent to 15.3 percent, which is expected to drop further to 15.2 percent in 2006. In contrast, the world's average agricultural tariff stands at 62 percent.


"Not a single member in the WTO history has made such a huge cut in such a short period of time, even the developed members," said Chinese Minister of Commerce Bo Xilai, who is in Hong Kong attending the WTO conference.


However, Chinese agriculture suffers from its own disadvantages, such as small size, poor infrastructure, lack of technology and investment, as well as foreign subsidies and unfair world trade system, which slowed down the growth of its farmers' income.


Though Chinese agricultural officials knew very well that the country had made extensive promises to open its market to the rest of the world, especially in the agricultural sector, they were still shocked by the first agricultural trade deficit in 2004, which hit US$5.5 billion.


"Part of the deficit was caused by foreign export subsidies, which lowered the prices of agricultural products such as grain, cotton and bean," said Cheng Guoqiang, a research fellow with the State Council Development and Research Center.


The United States, the world largest cotton exporter, offered more than US$3 billion of subsidy for cotton exports. Oxfam Group, a Hong Kong-based non-governmental organization, said that the subsidy drove 720,000 Chinese cotton farmers out of work.


The European Union's subsidies for sugar exports reduce the per capita annual income of Chinese sugar growers by 300 yuan (about US$38). The per capita income of Chinese farmers was 2,900 yuan (about US$363) in 2004.


Meanwhile, Chinese exports of such high-quality agricultural products as vegetables, aquatic and livestock products were kept out by tariffs or non-tariff trade barriers.


"Chinese farmers will feel more pressure on the international market, where agricultural trade is distorted by subsidies or trade barriers," Niu said, adding that such an unfair situation must be changed in the process of the WTO trade talks.


Niu said China will make the most of the domestic support measures permitted by WTO rules to improve the efficiency and competitive edge of its agriculture.


(Xinhua News Agency December 19, 2005)


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