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WTO Entry Could Cause Loss of Millions of Jobs in China - 2001-11-12

China's entry into the World Trade Organization after 15 years of trying is reassuring to foreign investors, who are pouring billions of dollars into the country. Some analysts say the foreign competition that comes with WTO membership is likely to cost China millions of jobs in outdated industries.

Author and lawyer Gordon Chang is skeptical about the benefits of WTO membership. He says China's economy is far too frail to withstand full international competition, because its banks are burdened with bad loans and its factories are inefficient.

Mr. Chang, an American who practiced law in China, says the situation is worsened by the poverty of the nation's millions of farmers who can not compete internationally.

In a recent speech in Hong Kong, Mr. Chang said economic strains caused by the WTO will add to the millions of unemployed people in China now. He predicts the resulting economic and political pressures could topple the Beijing government within a decade. "So I think that all you need is a little change to tip over the apple basket and certainly with WTO, the changes, I think will be more than just a little," he said.

Mr. Chang says China's auto industry is a good example. Earlier this year, a slight cut in China's stiff import tariffs sparked a big increase in imports. He says tariffs will fall even more under WTO, hurting the companies - and workers - making cars.

The incoming chairman of the American Chamber of Commerce in Beijing, Chris Murck says inefficient state-owned companies are particularly vulnerable under WTO. But he says they were doomed before China entered the WTO. "The slow-motion collapse of state-owned enterprises was proceeding of its own accord and would proceed in any case whether they went into WTO or not," said Mr. Murck.

Mr. Murck says that in the long run, there will be more jobs and prosperity, especially as trade barriers fall allowing in more foreign investment.

Some major companies already are betting that China will be stable and grow more prosperous.

Communications-equipment maker Motorola said Wednesday it is boosting its investments in China from around $3 billion to around $10 billion. Germany's Bayer drug and chemical company recently said it will spend more than $3 billion to make chemical products and polymers in China.