WASHINGTON-Despite China’s making new promises to open its telecom market to competition
and foreign investment, the Clinton administration is avoiding making any commitments to endorse Chinese entry into
the World Trade Organization in advance of a U.S. government-industry trade mission to China later this week and
Chinese Premier Zhu Rongji’s visit here next week.
U.S.-Sino relations, already strained by alleged satellite
technology transfer, espionage charges against China and the U.S. $57 billion trade deficit with China, grew shakier
last week as China (and Russia) voiced strong opposition to U.S.-North Atlantic Treaty Organization military
intervention in Yugoslavia.
The confluence of these events appears to have slowed progress on U.S.-Sino telecom
trade, following seemingly positive talks in Beijing just a few short weeks ago between Chinese leaders and a U.S.
delegation that included trade representative Charlene Barshefsky, Commerce Secretary William Daley and Secretary
of State Madeleine Albright.
“There is no strategy of getting a deal for the sake of a deal,” Stanley Roth,
the State Department’s head of East Asia and Pacific affairs, told a Senate trade subcommittee last week. “There’s
no desperate search to get a WTO agreement so that there will be a sense of peace for the Zhu Rongji visit … There will
only be a deal if it meets our needs, one which provides considerably improved, vastly improved market access for
American exporters.”
Zhu’s U.S. visit is slated to begin April 8, when some believe he may make a major
telecom market-opening concession as a sweetener for U.S. support of Chinese WTO membership. The gesture could
pertain to Code Division Multiple Access technology into China or possibly China’s willingness to sign a global
agreement to de-tariff telecom and information technology equipment by 2000.
Zhu, speaking with reporters in
Beijing recently, declared: “China is prepared to make the biggest concessions within its abilities.”
At
the same time, the Chinese Ministry of Foreign Trade and Economic Cooperation acknowledged the United States is
“holding out for better access to the world’s fastest growing telecommunications markets.”
“China
Telecom is reducing prices,” said Zhu. “But I do not think the reduction is far enough. I think the prices
should be reduced continuously and over several times. The way for that is to introduce competition. Now we are
reforming the system of China’s telecommunications industry and trying to break the monopoly and encourage
competition. Secondly, we should open the Chinese telecommunications market to foreign investors.”
That
Zhu might make a CDMA announcement here suggests the U.S. government may have been lobbying as aggressively
to pry open China’s wireless market as it has to persuade the European Union to end its lockout of CDMA
technology.
“The gap between the positions of China and its partners is narrowing … But there remains a
considerable gap,” said Zhu. “As long as the two sides can make concessions based on the larger interest
and out of the large interest in promoting prosperity and stability and in respect of the world market and trade, I am
very hopeful that we will be able to reach an agreement.”
Leon Brittain, trade ambassador of the European
Union, is set to go to China on April 22 for talks on China WTO accession.
“I’m not sure things are as
gummed as they might appear,” said Eric Nelson, vice president of international affairs for the
Telecommunications Industry Association. “We’re hopeful China will understand telecom liberalization is as
much in their own interest as it is to companies that want to come in from the outside.”
Nelson said high-level
Chinese officials realize telecom reform is key to maintaining the momentum of economic growth.
“We are
quite hopeful all these political controversies swirling around will have no impact or very minimal impact on telecom
regulatory reform in China,” Nelson stated.
Zhu is said to be more amenable to telecom reform than the more
conservative Jichuan Wu, head of China’s Ministry of Information Industry.
China’s huge, largely untapped market
offers immense overseas opportunities for U.S. wireless manufacturers and service providers.
While American
suppliers Motorola Inc. and Lucent Technologies Inc. have made inroads in China, U.S. operators have been effectively
barred from wireless joint ventures in the giant Asian nation.
Daley is leading a telecom industry delegation
(organized by TIA) to Guangzhou, China, March 30-April 21.
While recent events potentially could undermine
U.S.-Sino wireless trade, some politicians have seized upon the situation to argue for a retreat from free trade policies
so strongly embraced by the White House.
Various news services contributed to this report.
