China's WTO membership -- now the hard part begins

By Willy Wo-Lap Lam
CNN Senior China Analyst

(CNN) -- Premier Zhu Rongji, who deserves the most credit for China's accession to the World Trade Organization, has also given the frankest assessment of the odds facing his country.

"Everybody is happy [about the accession]," Zhu said while attending a regional meeting in Brunei last week.

"But I am not that elated because I am worried."

He went on to say that WTO membership would bring with it "many questions" -- and that "the disadvantages may outweigh the advantages if the problems are not handled well."

Perhaps the single most daunting problem is to ensure that the Chinese Communist Party (CCP) and various levels of government stop interfering in the country's inchoate market forces.

More by Willy Wo Lap Lam Eye on China archive    CNN.com Asia More news from our Asia edition

As Vice-Head of the State Statistical Bureau Qiu Xiaohua pointed out, WTO accession would present big challenges to the government, enterprises and professionals.

The noted economist said government departments, which were "accustomed to non-transparent means of operation and ruling by fiat," would face the toughest test.

Qiu said the government's nature and role must be changed, and relevant laws and regulations perfected.

Conflicting signals

In this crucial area, however, conflicting signals are emanating from different quarters. And the momentum of change is clashing with the forces of stasis and self-preservation.

Late last month, the State Council abolished in one stroke 221 laws and regulations deemed to run counter to WTO norms.

The central government also pledged to drastically reduce the estimated 2,000-odd executive fiats, or government edicts on how the economy should be run.

The leaders of coastal cities have come out with unequivocal statements about the new goal of "small government, big society," or "small government, big service."

Shanghai's dynamic major Xu Kuangdi said last week: "What we must do immediately is to change the functions of the government."

Xu played up the importance of rendering institutions and systems more compatible with global standards.

Likewise, Executive Vice-mayor of Shenzhen Li Decheng said governmental structures and behavior would be transformed in three to five years.

"A government based on law and regulations will replace one based on power," Li said. "A service-oriented government will replace a command-type government."

Double-edged sword

And Vice-Premier Wen Jiabao, one of the most liberal of the Fourth Generation or younger leaders, said although globalization was a double-edged sword, there was no doubt that China would open up further after WTO accession.

However, WTO membership means much more than amending some laws and making promises about the partial retreat of the state. It requires a paradigm shift.

Some of President Jiang Zemin's aides have alluded to the need for a "thought liberation movement" akin to the one spearheaded by the late patriarch Deng Xiaoping in the late 1970s, when China was still under the yoke of Maoism.

Recent actions and speeches by Jiang and his colleagues, however, have showed that the top echelon is hardly ready for what Deng called "a change of the mind-set."

While certain aspects of the government may be liberalized or rendered more service-oriented and WTO-compatible, the authority of the CCP - still the ultimate arbiter of Chinese life - is being shored up.

According to Beijing sources, the leadership held a series of internal meetings the past couple of months on how to cushion the impact of WTO accession and economic globalization.

One conclusion was that the powers of the party must be boosted. This was behind Beijing's newest political slogan: "To run the country well, it is imperative that the party be run well first."

Raising party standards

As Jiang put it in an internal meeting, the CCP must "raise its standards as a ruling party." He added that "the party's leadership abilities must be strengthened."

Party cells are being set up within private enterprises, perhaps the most dynamic component of the socialist market economy.

Senior cadres also put a lot of store by augmenting the authority of the "leadership collective with comrade Jiang Zemin as its core."

In the mind-set of Jiang and company, the CCP still knows and does everything best, period.

While Beijing may have conceded a good chunk of the economy to globalization, it is making sure that the party's prerogatives as well as "traditional Chinese values" will not be hurt by the influx of new ideas and ways of doing things.

Jiang touched on ways to tackle WTO-related problems during an inspection tour to Hebei province last week. He admonished cadres to "prepare for the rainy day" by "doing solid work for the party and the people."

"We must concentrate our energy on handling our own affairs well," Jiang said. "We must ceaselessly boost our economic strength, the prowess of our defense [forces], and the people's cohesiveness."

"Handling our own affairs well" was a shorthand for ensuring that everything was under the party's control.

In many aspects of society, therefore, the trend is toward a tighter straightjacket.

Information revolution

Take, for example, information, the free dissemination of which is key to China's success in the knowledge economy.

It is ironic that while China had concluded major WTO protocols with America and Europe in 1999, the full texts of these accords have still not been published in the official media.

Fan Hengshan, a senior official at the Office for Restructuring the Economy said at a WTO forum last week that even the State Council's own research bodies had not received a copy of the full agreements.

Late last month, Beijing asked foreign TV networks to distribute their channels through a centralized, government-controlled broadcasting platform.

This is to facilitate the excision of pornographic -- and politically destabilizing -- material.

While talking to Hong Kong reporters last week about his WTO concerns, Zhu said his biggest worry was the country's 900 million farmers.

Indeed, while China's WTO status means all foreign enterprises would be accorded "national treatment," the same could not be said about the lowly peasants.

It was only a few months ago that Beijing decided to allow rural residents to live and work in small and medium-sized cities.

The premier was clearly afraid that peasants made jobless by cheap foreign produce might stir up trouble for Beijing.

Yet neither Zhu nor other cadres have thought of giving peasant representatives a say in party and government affairs so that a revolution of perhaps cataclysmic proportions can be avoided.