China Pledges Support For Russian WTO Entry
China has pledged full support for Russia's entry into
the World Trade Organization at the end of a visit to
China by Russian president Putin. Earlier on, the two
countries recognized each other's economies as being full
market economies.
Russian accession to the WTO would mean that Russia would
have to adhere to organization rules for settling trade
disputes. This comes at a time when relations with the
EU and US have come under closer scrutiny because of Putin's
crackdown in his war against Chechen terrorists.
Russia's most important export to China is oil, which
the country badly needs to satisfy its expanding consumer
needs. Chinese oil production in the northeast is currently
falling. China's oil import deals were made with Yukos,
but that deal has fallen into doubt following the arrest
of the former CEO by the Russian authorities. While the
Chinese have sought reassurances that the Russians will
honor the deal, the Russians have been coy.
China joined the World Trade Organization (WTO) in November
2001. While there have been some disputes with other members,
most feel that the Chinese have generally adhered to WTO
terms. In the years since its accession, the Chinese economy
has shown rapid growth, becoming a factory site to the
world. In addition, Chinese consumer demand has exploded,
and is now expanding into the so-called tier 2 and 3 cities.
Most observers believe that there will be another wave
of global economic re-adjustment when textile quotas are
lifted at the end of this year. At that time, it is expected
that Chinese production of textiles will rise from the
current 18% to more than 50% in less than a year.
Under WTO rules, the Chinese financial sector will be
completely opened to non-Chinese competition at the end
of 2006.
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