Let China into the WTO, Then Work to Reform It the Country Should Be Allowed a Gradual End to Its Trade Barriers as a Condition of Membership

Article excerpt

Imagine that you belong to a group that wants to change the behavior of a powerful but erratic individual outside the group. What's the best way? Most would agree that letting the individual join the group and gradually socializing him or her would be the best way.

But when it comes to China's membership in the World Trade Organization (WTO), some members aren't sure. And with the next vote on the issue coming later this year, media accounts indicate that China is still fighting an uphill battle. Many WTO members, especially the United States, see China as a developed country. But China considers itself a developing country and therefore seeks a gradual, rather than an immediate, end to its trade barriers as a condition of membership.

To consider China anything but a developing country is to misunderstand China. For while it is a vast country and is headed down the capitalist road, China is hardly the developed market some in the US see it as. Westerners look at China's population - 20 percent of the world's population - and see a market of 1.2 billion people. But the size of the Chinese market is exaggerated, and its potential is uncertain and unclear. The exaggeration comes about because most assume that the 1.2 billion people in China are automatically consumers. What's the first thing a consumer market needs? Money. The Chinese are not wealthy, or even close. The average per capita income is $500 a year, and 73 percent of the 1.2 billion Chinese live in generally poor rural areas. The population of cities is hardly representative of the country, and there is a growing economic gap between rural and city residents. How do consumers learn about consumer goods? Word of mouth, of course, plays an important role. But so do newspapers, radio, and television. In fact TV, more than anything, created a mass market in the US and could do the same in China. Government control Could. With the news media controlled by the government, its value is immediately discounted as an advertising outlet. Who would believe an advertisement in the People's Daily, knowing that the "news" in the paper is determined by the Communist Party? Besides building credibility for the news media, the Chinese need to have more media outlets. China is a country of 1.2 billion people but only 2,200 newspapers, 274 AM radio stations, and 202 TV stations. China is a country of 1.2 billion people but only 215 million radios. It's a country of 1.2 billion people but only 75 million television sets. …