ABSTRACT
The rocky and lengthy process of China’s GATT/WTO accession detailed in the preceding chapter suggests that in the contemporary world domestic and external politics is closely interwined and nation-states are increasingly politically and economically linked with each other. In this context, any major international deal, which has far-reaching domestic effects and which involves uneven distribution of costs and benefits for a wide range of political and economic groups, is possible only when leaders of the nations involved skillfully manage domestic and external politics and interaction. In this chapter the case of the difficult and eventual conclusion of the China-US WTO agreement would be closely analyzed and governmental adjustment to WTO entry in China would be briefly discussed. Particular attention will be paid to complicated and unexpected interaction of domestic-external politics and how leaders of the US and especially China managed the interaction, overcame strong domestic backlashes and opposition, and brought the agreement negotiation to a successful conclusion. In addition, the series of adjustments undertaken by the Chinese national and local governments in the wake of the agreement will be examined. These adjustments suggested that indeed leaders could borrow external pressure to forge ahead with domestic reforms. On November 15, 1999, China concluded an agreement with the U.S regard-
ing its accession to the World Trade Organization (WTO). Since the US is the largest and most influential WTO member, the agreement paved the way for China’s accession to the WTO. The China-US negotiations regarding China’s WTO membership in 1999, however, were full of thrills and suspense, and could be depicted as “sailing through a perfect storm”. The three twists surrounding the talks included (1) Clinton’s refusal to seal the agreement despite Zhu’s considerable and politically bold concessions in April, (2) the termination of the talks after NATO’s bombing of the Chinese embassy in Belgrade, and (3) the impasse of the negotiation days before the agreement. These dramatic events transformed the WTO talks into a perfect storm, parallel to the one in a recent disaster movie of the same title.1 One huge difference,
however, exists between this real storm and the one depicted by the Hollywood filmmakers. Unlike the movie’s ill-fated fishing ship Andrea Gail, the Chinese and American negotiators, to many analysts’ surprise, successfully sailed through the heart-pounding waves to their destination. A question naturally results: How and why did the Chinese leaders weather
all these crises and reach the WTO agreement with the US? In particular, how did the Chinese leaders manage the domestic fallouts against trade concessions to the US and secure the conclusion of the agreement? An investigation of the questions will help us to understand the leaders’ management of domestic-external political interaction in a potentially volatile political world. This chapter suggests that the top Chinese leaders circumvented the bureaucratic and popular opposition to the agreement by adopting “bamboo” tactics. In the presence of strong opposition against the agreement at home they proposed tougher terms for the US and delayed the negotiation to calm down nationalist sentiments. However, they bent only moderately to ease opposition without giving up their stance favoring an agreement. When the opposition forces subsided they renewed the negotiations and tried hard to reach an agreement. In addition, the Chinese leaders made the agreementrelated decision-making exclusive, controlled the coverage of the news media, and bypassed layers of the bureaucracy. This style of political management facilitated the negotiations and enabled the final conclusion of the agreement. It also left the leaders with a formidable task of gaining the cooperation of the bureaucrats in implementing the WTO rules. The chapter also explains in detail the reasons for China’s conclusion of the agreement. The Chinese leaders favored an agreement because the WTO membership could improve China’s international relations, stimulate economic growth, and propel the reform process. Drawing on news coverage as well as experts’ insights, this chapter dis-
cusses the decisions, moves, and reasons to conclude the agreement. This chapter first reviews the history of China’s bid for WTO membership. It then reveals the Chinese leadership’s determination to enter the WTO, its attempts to downplay the accession talks amidst the turbulent events described above, and the reasons for China to determine to join the WTO. This chapter focuses on the Chinese side of this issue, because it is more manageable to do so given the length limits of the chapter.
