A Tale of Two Cities: Beijing: After More Than a Decade of Stalemated Negotiations, One Man in China Finally Risked His Career to Cement the World-Trade Deal. If the Country's Shaky Economic and Political Systems Can't Handle the Systems Can't Handle the Shock, Zhu Rongji Will Be the One Who Pays for It
The man who made it happen was nowhere to be seen. More than anyone else, it was Prime Minister Zhu Rongji who closed the deal with the United States, bringing China's 13-year campaign to join the World Trade Organization to within sight of its goal. Early last Monday morning American negotiators had packed their bags and were threatening, once again, to go home. Then Zhu startled them by arriving unannounced at the Trade Ministry in Beijing to help hammer out a breakthrough. But that afternoon he stayed away from the signing ceremony, where one giddy Chinese official burst into tears of joy. Nor did he appear at a celebration hosted by a beaming President Jiang Zemin in the Zhongnanhai leadership compound. Initial Chinese press accounts avoided using Zhu's name in their reports on the last-minute negotiations; they said only that a "senior-level official" had intervened. The WTO agreement was a personal triumph for Zhu, but it also made him China's invisible man.
Several sources said it was the prime minister's own decision to make himself scarce after the breakthrough, allowing Jiang to claim the spotlight. The blunt and assertive Zhu, 71, has already become the focus of criticism from nationalists who think the WTO will infringe on Chinese sovereignty and from vested economic interests threatened by foreign competition. The chief U.S. negotiator, Trade Representative Charlene Barshefsky, said she was pleased that "Jiang immediately took ownership" of the agreement. But his P.M. took most of the risk. "Zhu has been willing to sacrifice himself to promote reform," says Chinese political analyst Wang Shan, who calls entry into the WTO "the most important such event since Deng Xiaoping launched China's open-door reforms" in 1978.
Zhu apparently believes that membership in the WTO is the best way to revive flagging economic reforms and foreign investment in China. An official think tank predicts entry will add a full percentage point to the country's annual growth rate. If they are implemented properly--a very big if--the terms of the deal will reverberate deep inside Chinese society. Already, Yuppies in Beijing and other cities are excitedly planning to buy cheaper cars with foreign auto financing, to shelter their savings in the greater safety of foreign banks and to log on to America Online--options they never had before. Telecommunication has been a particularly sore subject in China, with the minister who oversees the industry, Wu Jichuan, fighting to protect the backward, state-run China Telecom from foreign competitors. Last week Internet chat rooms exploded with WTO buzz; a popular portal called sina.com recorded 1.5 million hits in 24 hours. One visitor pleaded: "Americans, please come soon! One hundred million China Telecom clients wait for you to rescue us from this burning hell!"
If handled well, the WTO's terms will help China become more competitive, more modern, even more pluralistic. If managed poorly, the country could face an explosion of rural poverty and the disintegration of central control. "China could become like Indonesia--except much, much worse," warns an economist in Beijing. For the moment, the optimists are carrying the day. In a recent survey of city dwellers, more than 62 percent approved of the deal, while less than 5 percent opposed it. Yang Dali, a China-born political scientist at the University of Chicago, says the most important aspect of the agreement may be "the emphasis on rules--global rules at that, subject to adjudication by third parties in Geneva."
Yet even Zhu's supporters acknowledge that China could be in for severe stress. Unemployment is expected to rise after China joins the WTO, with uncompetitive state-owned enterprises laying off more workers. And because last week's agreement gives American agricultural products much more access to the Chinese market, millions of Chinese farmers will be pushed into the cities, adding to the social dislocations that already plague the country. …