In the long run, WTO membership is expected to aid economic reforms and improve rule of law at home.

But the elation over the expected entry can not ward off long-existing worries by local experts over the nation's key industries. Chinese trade experts believe that the telecommunications, banking, insurance, auto and agriculture sectors will experience an instant backlash after the accession.

A more direct outcome will be that millions of Chinese are likely to lose their jobs as some ailing State-owned enterprises succumb to foreign competition after WTO entry, they said.

Although China has had time to prepare during its 15-year quest, long-protected sectors are still likely to feel the chill as the country opens up further to imports and foreign investors.

Meanwhile, some local analysts are calling for a balanced view towards the future competition.

"The accession won't result in a boom overnight, nor will it destroy the Chinese economy overnight," said Liu Guangxi, a WTO expert in Shanghai.

Xue Rongjiu, director of China's WTO Research Center, also urged media on the Chinese mainland not to play up the negative effects of entry but to highlight the overall rights and obligations of membership in the trade club.

In the telecommunications sector, China has in the past few years nurtured three major operators - China Telecom, China Mobile and China Unicom - and helped them build up a network infrastructure capable of competing with transnational giants.

Nonetheless, these State-owned telecoms giants may be hit as domestic competition heats up and foreign operators beef up their infrastructure and services.

The domestic auto industry is likely to be one of the hardest hit, with a shake-out looming upon WTO entry.

The Chinese Government has invited foreign heavyweights into the domestic auto industry, hoping that major domestic auto companies could tap the expertise and capital strength of their foreign counterparts while sheltered by the government.

Experts said cheaper imports due to import tariffs cuts could hurt these Sino-foreign auto joint ventures, such as Shanghai General Motors and Shanghai Volkswagen, which have better quality products and services.

China's creaky banking sector is also scrambling to expand services, forge co-operative pacts, list stocks, shed bad debts and merge to contend with foreign competition.

But foreign banks could end up with more than half the domestic market for fee-based banking services, which include trade financing, credit card transactions and cash management, Chinese bank officials speculated.

Five to 10 years after WTO entry, foreign banks could capture 15 per cent of the market for foreign exchange deposits, 10 per cent of yuan deposits, 20 to 30 per cent of foreign exchange loans and 15 per cent of yuan loans.

Overseas impact

The worries over China's entry to the global trade body extend outside of China as well.

China's WTO entry is seen by most club members as a chance to tap its vast market, but some Asian economies fear Chinese goods will swamp the global market at their expense.

After China's accession, the great potential of its market will be gradually translated into actual purchasing power, providing a huge open market to the world.

US Trade Representative Robert Zoellick said the deal would "strengthen the global economy and the international rule of law for trade."

"China has made a firm commitment to the rest of the world to open its markets and adhere to international, market-based rules, which will help American workers, consumers, farmers and exporters," he said.

(Business Weekly 10/01/2001)