WASHINGTON-Despite China’s agreement to open its doors to Code Division Multiple Access technology, differences over telecom foreign investment and other matters make it doubtful a deal will be struck on Chinese entry into the World Trade Organization during Premier Zhu Rongji’s visit here later this week.
The Clinton administration, sending out conflicting signals all last week, appeared to be torn between wanting to strike a high-profile deal on Chinese WTO membership-something that might take controversial China-related stories off the front pages of major dailies-and making a deal it might regret later if Republicans choose to exploit it for political purposes.
U.S. Trade Representative Charlene Barshefsky’s abrupt departure for Beijing early last week fueled speculation the United States and China were close to an agreement on China WTO membership.
But Barshefsky’s presence was not enough to produce the concessions U.S. trade negotiators wanted. By mid-week, she said “substantial gaps remain … on critical areas of trade” and talks on the expert level will continue.
“The United States will set no artificial deadlines in these negotiations; progress will only be driven by substance,” said Barshefsky.
One of the sticking points appears to be the level of foreign investment in Chinese telecom carriers. China is willing to allow foreign firms to hold up to 35 percent in wireless and other telecom service providers. The United States is angling for 51 percent.
China, desperate after 13 years of trying to be a WTO member, also has offered to sign onto a global trade agreement to phase out tariffs on telecommunications and information technology equipment after the turn of the century. But it is unclear whether its offer is up to par with Washington’s expectations.
The U.S. wireless industry sees China, a country of 1.2 billion people lacking telecom infrastructure, as one of the best overseas export opportunities on earth. That’s what makes China’s acceptance of U.S.-developed CDMA technology a potential boon to Qualcomm Inc., Motorola Inc., Lucent Technologies Inc. and other American wireless firms.
RCR first reported March 29 that Communist China was close to allowing CDMA technology into the country. It was made official last week after a meeting between Commerce Secretary William Daley and Minister of Information Wu Jichuan.
“China will allow companies to introduce CDMA networks across China,” Daley announced from Guangzhou, where he and a group of U.S. high-tech executives participated in a U.S.-China telecom summit.
“This agreement represents an important market opening by China in a sector poised for tremendous growth,” Daley added. “American companies are market leaders in this technology and can look forward to vast market opportunities in China.”
At the U.S.-China telecom meeting, Motorola reportedly snared a $100 million contract of the $2 billion in telecom transactions between U.S. and Chinese companies during the trade mission.
Complicating Zhu’s meeting with President Clinton on April 8-which will be followed by trips to Denver, Chicago, New York and Boston-is China’s strong objection to U.S.-led NATO bombings in Yugoslavia.
In fact, as late as Friday, there was speculation Zhu would cancel his U.S. visit just as Russian Prime Minister Yevgeny Primokov did a little more than a week ago in protest of air strikes against Serbian military targets.
But China confirmed Zhu would make the trip, despite the ill-timing and awkward circumstances.
Also contributing to the strain in U.S.-Sino relations are allegations of Chinese nuclear espionage, U.S. satellite technology transfers to China, a $57 billion trade deficit with China, human rights and military issues.
The GOP-led Congress, scrambling to find an issue to use against Clinton, would like to capitalize on the anti-Chinese atmosphere it has help foment in recent months.
As such, there has been speculation that a highly damning 700-page House report on Chinese acquisition of U.S. high technology might be released during Zhu’s visit.
