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trade will come with threats," made by Long Yongtu, China's chief negotiator for WTO membership five years ago, has been replaced by awareness of the fact that threats failed to come, but free trade has been difficult to achieve too.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)