China's Censorship Policies Unaffected by WTO Membership

According to a recent story in The New York Times, China imposed more restrictions on the news media, "designed to limit the news and other information available to Internet users, and sharply restricted the scope of content permitted on Web sites." According to press reports "experts who follow the Internet say one of the most significant changes is the ban on self-generated opinion and commentary articles that accompany the standard state-issued news bulletins on major portal sites." In other words, if the government does not approve it, you are on shaky ground.

As China becomes more dominant in the global economy and an increasingly important market for American-based IT companies seeking a share of the new global pie, this is clearly bad news. It is curious how the Chinese are getting to be such a major force in our lives and the world economy. And as they do, appear to be tightening the noose on things like "freedom of speech" that most Americans and American corporations hold so dear.

A little over five years ago, China announced its plan to become a full-fledged partner in the world's trading system (WTO), and agreed to a series of important commitments all designed to open and liberalize its regime, and to integrate China into the world economy. In the process, it offered the U.S. and other trading nations a more predicable environment for trade and foreign investment in China in accordance with WTO rules and member expectations. The WTO is truly the only global organization with tough -- and importantly -- enforceable rules of trade between nations.

While China's entry in the WTO, for the first time in its history, promises unfettered access to the huge and growing China market, no one should expect sweeping or dramatic changes immediately-- certainly, it appears, not in the information sector of goods and services. And only over time -- in the market for manufactured goods or more traditional telecom services -- will anyone be sure that full and unrestricted access to this huge market has occurred.

While all import quotas were eliminated almost immediately, the time and condition of market access still depends upon the particular product or service, the industry sector, the geography and the year of proposed entry. For example, tariffs on information technology goods and services are being reduced gradually, over a period of many years. With regard to services, foreign suppliers are allowed to offer so-called valued-added services like electronic mail, voice mail, database retrieval and paging services but most must do so by having a strong local Chinese partner, as majority foreign ownership of telecom or information industry goods and services is still a distant dream.

To be sure, China wants to be able to control how foreign service providers enter the market and where. For example, during the first two years of operation such new ventures were limited to doing business in Beijing, Shanghai and Guangzhou.

Key to success of all the agreements is the extent to which both local and national taxes are applied uniformly to both domestic and foreign businesses and how much China sticks to its agreement not to enforce export performance, local content and other requirements as a condition of importation or investment.

Within weeks after the WTO agreement was signed, however, then-Vice Minister Wu Bangguo held a weekend conference to tell over 50 state-owned giants from sectors such as petrochemicals and telecommunications, that China won't abandon its strategy of backing favorite companies. He hinted that it would continue to subsidize state-owned companies, and help them raise capital on overseas stock markets.

Press and Internet Restrictions
How well and how fast China responds to its WTO promises remains to be seen. Of great concern to many observers is China's attitude toward the press and the