| Monday, November 12, 2001, updated at 12:11(GMT+8) |
Interview: Long Yongtu on China's WTO Entry |
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The following is the full text of an exclusive interview with Long Yongtu by our correspondent in Doha: At 9 O'clock on the morning of November 8, I came, according to appointment, to the room at Sheraton Hotel in Doha where Long Yongtu, chief negotiator from the Chinese Ministry of Foreign Trade and Economic Cooperation, stayed, and began discussing with him the following questions.
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At 9 O'clock on the morning of November 8, I came, according to appointment, to the room at Sheraton Hotel in Doha where Long Yongtu, chief negotiator from the Chinese Ministry of Foreign Trade and Economic Cooperation, stayed, and began discussing with him the following questions.
Correspondent: This time China is free from any suspense to attend the Doha meeting, everybody is just waiting for an already known result, as the "soul" figure in the negotiation on China's WTO entry, do you have a sense of relief from a heavy burden?
Long Yongtu: In the negotiation that has dragged on for so many years, we have had the taste of one kind or another, China has eventually been accepted as a WTO member, as far as I myself is concerned, I really feel a sense of relief, as if released from a heavy load. But the end of the negotiation on WTO accession does not mean the end of China's reform and opening up process, but rather China's reform and opening up program has stepped into a new process.
Correspondent: Do you think it is worthwhile for the 15 years of efforts China has exerted for entry into the WTO?
Long Yongtu:Fifteen years' time is indeed very long, but in terms of the process of the negotiation on entry into the WTO, this is a good thing. If, at the beginning, we had easily joined the organization, perhaps the significance of reform and opening up would not have been so important as it is today and its influence on the entire society would not have been so far-reaching as it is. Over the past 15 years, our marketization and modernization process has taken a giant step forward, and many profound changes have taken place in our old concept, we have got a better understanding of common international practices. The process of WTO entry negotiation has given a strong impetus to a farewell to China's planned economic system and to thoroughly doing away with the closed-door policy, along with the negotiation, China's reform and opening process is not decelerated, but rather is accelerated, during structural reform, we have evolved a new idea about market orientation, and during opening to the outside world, we have absorbed many internationally advanced civilization achievements, that's why I think the negotiation on WTO entry reflects, from one important aspect, the course of China's reform and opening endeavor. Although 15 years of endeavor is a long, painful and difficult process, we have not frittered away this period of time, so on the whole, it is worthwhile.
Correspondent: What are the decisive factors for success in the negotiation on China WTO entry?
Long Yongtu:The conclusion of the negotiation is the result of the joint efforts made by various social sectors. Concerned economic departments nationwide have, through negotiation, come to a common understanding: only by setting up an open market and introducing a competition mechanism into China, is it possible to give a stronger fillip to domestic economic construction, for instance, on the question of opening the service trade, I have resolutely overcome some unnecessary resistance. since you develop a modern economy, you must have a modern service industry.
Of course, any negotiation needs to have a political impetus. WTO was originally an international economic organization, along with the passage of time, however, the negotiation had gradually been politicized, it was not merely a simple economic and trade negotiation, but had evolved into a major political and diplomatic subject. A case in point was the negotiation between China and the United States, when relations between the two countries tended to become relaxed, negotiation could proceed smoothly, otherwise, the negotiation would come upon a snag and would even be suspended. For instance, the question concerning MFN status had long been the crucial factor for difficulties in China-US negotiation, US Congress' involvement in it had made the negotiation more politicized. The reason why China and the United States could reach a bilateral agreement is, to a great extent, due to the fact that leaders of the two countries, from a strategic perspective, treated and handled some crucial difficult problems, thus bringing the negotiation to a "win-win" result. When the negotiation came to a deadlock, political force often played a decisive role. In addition, trade negotiation was very complicated, without rigorous and hard technical operation, it was difficult to make the negotiation successful, China-US negotiation alone took more than 20 rounds, which often had to continue for several days and nights.
Here I want to point out that entry into the WTO would make future trade disputes between us and other countries and regions not easily be politicized, Japanese and US trade frictions have continued for several dozen years, but trade war between the two countries is trade war, and political relationship is political relationship, they are not interactive. Whereas in the past, once trade disputes we encountered, they would possibly affect our political relationship with the other side, enterprises had therefore been subjected to many discriminatory or unfair treatment, should this have continued, losses would have been very heavy. According to WTO rules, members are required that disputes, when occurred, should be handled by the technical level, and matter should be dealt with as it stands and avoid interference by political factors. This mechanism is very advantageous to China, the normalization of various trade disputes will help us establish stable, good multilateral and bilateral relations.
Correspondent: It is widely rumored that in promising commitments China has made one concession after another, what do you think about this?
Long Yongtu: Concession is not a derogatory term in trade negotiation, it is a necessary means for the two sides to reach a consensus and find the point of interest balance, without concession, it is impossible to make negotiation a success. As a matter of fact, in our daily lives, everybody is making concession. For instance, the action of a housewife bargaining with the peddler when she buys vegetables on the rural market is a kind of concession, and this is very normal. Concession made during negotiation is something indispensable, the most important thing is to see whether the result of negotiation is to the benefit of both sides. For instance, we had talked over the question tariffs for quite a long time, in the early 90s, China's general tariff level was 46 percent, such a level disqualifies one wanting to be a WTO member. We promised to lower tariffs and had constantly honored such promises. At present, China's general tariff level has been lowered to about 15 percent. Over the past few years, China's income from tariffs, instead of decreasing, has increased dramatically, our customs duty system is being standardized and getting closer step by step to common international practices, this fact shows that so-called concession is in keeping with the degree of opening to the outside world, tariff-cut is not an one-sided concession, but rather it is our initiative to make up for a "missed lesson", in a certain sense, it is a progress. The beginning of the launch of the reform. and opening up program, i.e., before the start of negotiation on re-entry into the GATT and accession to the WTO, we independently decided and adopted a series of preferential policies to attract foreign business people, can all these be regarded as concessions? One must not be suspected and censured just because concessions were made during negotiation.
Here I cite one example: Since the beginning of this year, the growth rate of contracted foreign capital China used has reached 30 percent, without foreign businesses' anticipation of China's WTO entry, foreign capital newly flowed in would not have grown so fast. First, foreign businessmen cast their eyes on China's tremendous market potential, second, they see China, after WTO entry, will perfect the legal environment under the framework of WTO and establish a transparent, stable and foreseeable economic and trade system. I have often said that in today's world, the question of confidence is a core question. Previously, foreign businessmen said that our capital invitation policy lacked continuity and transparency, and government work efficiency was low, related regulations were imperfect, and intellectual property rights was not effectively protected. To some extent, this had affected investors' confidence. Now our investment mainstay has turned from small and medium-sized enterprises to transnational companies, which is the focal point for the utilization of foreign capital, what the transnational companies regard as important is not preferential conditions of one kind or another, but rather is the legal environment. After entry into the WTO, we should open the market in great scope and deeper level, the WTO system based on rules will prompt China to comprehensively improve its investment soft environment, and attract more transnational companies to come to invest and set up factories in China, thereby enabling us to have more employment opportunities and tax revenue, bringing in more advanced technologies and fine-quality products, and boosting economic development in various localities, especially in the western region. If this is regarded as a concession, then what's wrong with it?
Correspondent: Is it that some people do not agree to your view about "merging into the mainstream of the world economy"?
Long Yongtu: I think under the situation of globalization, China's merging into the mainstream of the world economy is the general trend. China is a large developing country, we consider matters on the basis of this national condition. If China wants to develop from a large economic country to an economic power, it must become part of the mainstream of the world economy, otherwise, it will be put into the other register and will face the danger of "marginalization". Entry into the WTO is a rare opportunity, we should firmly seize it.
Correspondent: It is said that after WTO entry the greatest change facing China is that China will henceforth be incorporated into a system of rules. Do you think we can adapt to such a change? How can we be better adapted to the change?
Long Yongtu: It is very difficult to be used to such a change, it needs a long-term process. We are used to dodging rules, or adopting an attitude of pragmatism toward rules, thus causing chaos in the market economic order. The phenomena, such as smuggling, tax fraud, the corruption of officials, fake and shoddy products, are resulted from the lack of rules and the sense of credit. Given this situation, it is foreseeable that government departments and enterprises alike will not be used to the change after WTO entry, but they have to pass the test of the new situation. In many cases, it is hard to get rid of old habits, often it is impossible to solve the problem by relying on one's own strength alone, a sound, effective external force can impel us to accomplish something which we want to do but have delayed to accomplish..
As to the question of adaptability, I think: first, it is necessary to sort out, revise and perfect related laws and regulations in accordance with common international practices, here the point I want to emphasize is there is now a mistaken view, thinking that after WTO entry, the whole society has to conscientiously study various WTO regulations , in fact, it is more necessary to study various laws and policies formulated in accordance with WTO rules. It is really unrealistic to ask an ordinary person to get to know a thick book about related WTO accords and rules, because that is the task for the professionals. But, as Chinese citizens, they should get to know and be familiar with the laws and regulations revised and perfected after WTO entry. That is what is closely related to our daily lives. Second, the whole nation should foster a sense of rules and credit, that is the foundation for us to honor our commitments. Third, we should continue to crack down on illegal acts of disrupting the market economic order, otherwise, implementation of the rules will become an empty talk.
Correspondent: Currently, there are divergent views on the advantages and disadvantages, gain and lose after entry into the WTO, in your opinion, what should be the standard for judging advantages and disadvantage?
Long Yongtu: It is my consistent view that WTO entry will neither bring in great disaster, or fierce floods and savage beasts, so to speak, nor bring forth economic miracles overnight. The yardstick for judging advantages and disadvantages should be the need to see whether it can effectively safeguard our country's economic sovereignty and economic benefit. Some technology and capital-intensive enterprises may sustain a certain impact as a result of further opening the market after WTO entry. A market economy means to select the superior and weed out the inferior, furthermore, this is required by structural readjustment. But for some enterprises with only a short period of development and immature conditions, we had held firmly to the base line during negotiations, regarding this, we did not make any substantive promises. For instance, we exercised tight controls on the "degree" of opening such sectors as finance, insurance, telecom as well as culture. In short, what have promised, we must ensure its fulfillment; what we have promised, but have not accomplished it at the present stage, we should set a timetable for its fulfillment; we must not do what we cannot accomplish. All in all, what we comply with is globalization and not integration, over the past two decades and more since it was opened to the outside world, China has not lost an iota of sovereignty , we still keep in our own hands the main economic means, our fundamental interests will not be harmed. This is true of WTO entry, on the whole, advantages outdo disadvantages.
Correspondent: Among high-ranking Chinese officials, you have met with much censure because you are chief negotiator in the talk about WTO entry, the extraordinary hardship of negotiation itself has also brought tremendous pressure on you, what's your attitude toward all these? What's the force that has pushed you forward over the past 10-odd years? Did you have the thought of giving up?
Long Yongtu: Either reform or opening would inevitably touch holders of vested interests or those who stick to old practice, the encounter of censure is unavoidable, don't care about it. My consistent faith is this: China must follow the road of an open economy. When it comes to WTO entry, it is necessary to combine whole interest and partial interest, and long-term interest and short-term interest, and this is identical with the general orientation of reform, I have no doubt about this and have never wavered. The central and local governments and entrepreneurs have given me valuable support, this has reinforced my confidence in carrying the negotiation to the end. What gratifying me most maybe that I have not given up the negotiation for WTO membership halfway.
Correspondent: You are head of the Chinese Negotiation Delegation. Now ther is much rumor about your future post, what's your plan in this regard? Will you retire after winning success and merits?
Long Yongtu: I once said that WTO entry will mean a new beginning, there are still lots to do in connection with international practice, at the moment I have no plan to quit this post. Since I have persisted in this work for so many years, then why not further exert myself? I hope to see a more open and powerful China.
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