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Mixed Review for China Trade Offer

December 5, 1997

GENEVA (AP) _ China’s plans to open up its service sector to foreign companies were welcomed Friday as a step in the right direction _ but only a step.

``We’re making some steady progress,″ China’s vice-minister of trade Long Yongtu told reporters after a meeting of a group negotiating China’s entry into the World Trade Organization.

The group’s chairman, Pierre-Louis Girard, said China’s latest plans to liberalize its service market were ``warmly welcomed″ by WTO members.

But some expressed concern the offer was ``not as comprehensive″ as hoped for because such sectors as telecommunications were missing, said Girard, a Swiss diplomat.

There is general agreement China, the world’s most populous nation, should join the WTO, which governs global trade relations. But there are disagreements over terms for its entry.

Beijing wants to enter as a developing country, which would require it to take only gradual measures to cut barriers to imports of goods and services.

The United States, which has a big trade deficit with China, says the entry terms should be tougher as the Chinese economy is already well developed.

The huge service sector, which includes banking, insurance and retail activities, has long been a stumbling block in the discussions.

Beijing is reluctant to expose its state-owned banks, shipping companies and the rest of its service industries _ many of them rudimentary _ to advanced foreign competitors.

Long said China’s latest offer included a range of measures to improve access for overseas companies.

For instance, China would relax rules so it would be easier for foreign banks and insurance companies to establish themselves, said Long.

In the retail sector, limits on joint retail ventures from abroad would be gradually eased to allow foreigners greater access to China’s 30 provinces, he said.

China first sought to join the WTO’s forerunner, the General Agreement on Tariffs and Trade, in 1986. WTO membership is now one of its top foreign policy goals.

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