Oct 23, 1992

CHINA WORKING PARTY RESUMES, U.S. AND EC SEEK MORE INFORMATION.

GENEVA, 21 OCTOBER (TWN) The working party on the application of China to "resume" its status as a GATT Contracting Party heard Wednesday a Chinese presentation about Beijing's firm determination to move towards "socialist market economy", a policy that has now received the imprimatur of the party Congress.

A working party to draw up the terms of accession had been at work since 1988, but this work was virtually suspended since 1989, following the suppression of the "pro-democracy movement" and the Tienenmen square incidents.

But at the last meeting of the GATT Council, in return for allowing consideration of Taiwan's application to join the GATT as a separate customs territory, it was agreed that the work on the Chinese application should move forward. The statement of the Chairman of the GATT Council made clear at that time that there was a linkage between the two, and that there would be a sequence of the Chinese application and the report of the working party being brought up, considered and approved by the Council before the Taiwanese applications and report could be considered.

At the meeting Wednesday, the Chinese delegation viewed the resumption of work as a "new page of the negotiations" and marking the conclusion of the six-year long hard work on examination of China's foreign trade regime. The resumption of work of the working party coincided with the beginning of a new phase of China's economic structural reforms.

The just concluded 14th Congress of the Communist Party had taken an important decision on the objectives of the reform towards "socialist market economy", and the crystallisation of China's experience in economic reform. Practical evidence had shown that in China wherever market forces played an adequate role, there was a strong dynamic in the economy and greater momentum of development. In the coastal regions of China, market forces were progressively playing a leading role, and a series of measures had been adopted to give substance to the market economy. But in the course of building a market economy, "we shall keep a firm grip on two key links - transformation of operational mechanisms of enterprises and establishment of market-responsive price mechanisms the two issues of major interest to many contracting parties", the Chinese Vice-Minister Tong Zhiguang said.

Explaining some of the measures taken and proposed, Tong said that China had made a firm decision on building a market economy, and this would economic structure and policy closer to the GATT system. The discussions on the protocol of resumption should take full account of the latest developments of the economic reform.

China was ready to conduct serious negotiations with contracting parties and find a proper balance of rights and obligations in the negotiations. On resumption, China should enjoy most-favoured-nation treatment and all rights based on non-discrimination principle. In turn China was ready to assume its obligations and reduce customs tariffs and eliminate non-tariff measures.

The U.S. and EC representatives said they wanted to know more about how a "socialist market economy" would work in practice. The EC and some others also wanted more information on the recent U.S.-China bilateral accords.