Asian countries nervous over China's WTO entry

Asian countries nervous over China's WTO entry

SINGAPORE (AFP): As the global community welcomes China's
entry into the World Trade Organization (WTO), regional
policymakers are nervously assessing how to cope with the Asian
giant's irreversible economic ascendency.

China's WTO membership, now just a formality, is expected to
escalate pressure on Asian countries to strengthen their
competitiveness against the might of the Chinese industrial
engine, regional officials and analysts said.

"Just as Japan was the 'world's workshop' after the Second
World War, China is becoming the 'factory of the world' in the
21st century," Singapore's Deputy Prime Minister Lee Hsien Loong
told a business conference Wednesday.

"China's entry into the WTO will hasten its integration into
the world economy, increasing the pressure both on other
countries and also on China's own long-protected and inefficient
state-owned enterprises," he added.

In particular, the 10-member Association of Southeast Asian
Nations (ASEAN), already reeling from a global downturn, faces
the arduous task of working together more closely than ever
before, said Bob Broadfoot, managing director of the Political
and Economic Risk Consultancy (PERC).

"ASEAN needs to cooperate more regionally to lower tariffs and
create a more unified market if it is to be seen as a credible
alternative to the 1.2 billion (people) market of China," Hong
Kong-based Broadfoot told AFP.

ASEAN, home to 500 million people, has come under fierce
criticism, particularly for not doing enough in the aftermath of
the 1997-98 regional crisis to closer integrate their economies.

ASEAN's members are Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Singapore, Thailand and
Vietnam.

All are already committed to the ASEAN Free Trade Area, or
AFTA, that will see the group's more developed members reduce
tariffs on most goods traded within the region to between zero
and five percent by 2003.

Singapore, one of Asia's wealthiest economies, is one of the
most vocal in warning of the challenges that Chinese WTO
membership will pose.

Lee Kuan Yew, the city-state's first prime minister credited
for turning the resource-poor island into an economic powerhouse,
has urged ASEAN members to forge bilateral free trade agreements
to counter the growing clout of the Chinese economy.

Lee's successor Goh Chok Tong has described the rapid ascent
of the Chinese economy as "scary" and said Singapore's "biggest
challenge is therefore to secure a niche for ourselves as China
swamps the world with her high quality but cheaper products."

But ASEAN secretary general Rodolfo Severino is more
optimistic that the grouping can cope with the Chinese challenge.

"Southeast Asia has known that China will be entering the WTO
from the beginning," he said by telephone from the ASEAN
secretariat in Jakarta.

It is not going to be a one-way street as China will also be
expected to lower its import tariffs in return for entry into the
WTO and this should benefit ASEAN members, said Severino.