The foreign business community in China, especially European firms, cheerfully applauded the historic China-EU agreement on China's accession to the World Trade Organization signed on Friday.
The pact is in the interest of China, the EU and the world economy in the long run, said a Chinese trade expert.
The pact removed the last major obstacle to China's 14-year bid for WTO membership. China now needs only reach accords with Costa Rica, Ecuador, Guatemala, Mexico and Switzerland and comply with the WTO's membership procedures to seal secure its place in the world body.
The timing of the China-EU accord was excellent because the US House of Representatives is expected to vote this week to decide whether to grant China permanent normal trade relations (PNTR) status, said Yukon Huang, director of the World Bank's China Program.
Obtaining PNTR status was the basis of a China-US agreement concerning China's entry into the WTO which was reached last November.
The pact represents "growing sentiment favoring China's entry into the World Trade Organization," Huang said. "With the signing of the agreement the US Government has further justification for persuading its congressmen to support the legislation (on PNTR)."
"It's definitely a welcome announcement," said Lily Yang, chief representative of Holland-based ING Insurance, which has been striving for a life insurance operating license in China for years.
The global financial sector will benefit much from the long-term economic upswing in China, the EU and the world economy to be brought by China's WTO accession, said Samuel Lau, manager of HSBC's Beijing Branch. HSBC believes it has much to look forward to in China, he said.
"The signing of the pact means a countdown on the opening of many markets in China will begin soon," said Rolf Berweger, head of corporate and institutional banking of the Standard Chartered Bank's China operations.
He said China's WTO membership will open a lot of doors (for foreign investors), so European investment will increase steadily.
"It will significantly improve business conditions for foreign investors in China as well as Chinese investors or exporters overseas," said Hans-Jorg Probst, chief representative of the Beijing Office of Allianz, one of the largest European insurers.
It will stimulate growth in the volume of trade flowing in and out of China and should help China's economy in the long term by bolstering China's economic reforms and advancing the rule of law, said a statement by Ericsson Co.
China's entry will further improve the industrial environment in China and this is more advantageous to Ericsson in providing the world market quality products from its production bases in China, the statement said.
Nonetheless, European firms also realize China's opening up will be a gradual process.
Yang from ING said her company understands that China's opening up should be step-by-step, and that companies should not expect too much from its impending WTO accession.
Probst said that after China joins the WTO there will probably not be too many sudden changes. The insurance market will be gradually liberalized, based on a general overhaul and improvement of the legal framework, more experienced supervisory bodies and improvements in consumer protection as well as the formation of voluntary insurance industry associations.
But, Probst suggested, if China seriously intends to become a genuinely global economic power - rather than just having the largest "market potential" - Chinese companies must face up to international standards and conditions as soon as possible.
(China Daily May 21, 2000)
