THE UNITED States has effectively removed the last barrier to the communist China joining the World Trade Organization (WTO). The European Union has already welcomed the principle of Chinese membership. Now it seems that Beijing will shortly take its rightful place at the WTO.
It was always absurd that the world’s demographically largest marketplace should ever have been excluded from debates on world commerce. However China has not been blameless in this matter. In the pell mell rush for economic growth, the Chinese authorities turned a blind eye to a good many illegal trade practices, the most obvious of which was the outright copying and piracy of specialized goods designed and developed in other countries. Indeed there were allegations that this theft of intellectual copyright was actually for a while officially encouraged.
China was not unique in these practices. At the beginning of its economic take-off 45 years ago, Japan itself indulged in similar activities, to be followed by Singapore and then British-run Hong Kong and finally by Taiwan, Beijing’s ideological Nationalist enemies on the island of Formosa. WTO membership will oblige Beijing to crack down openly and effectively on any such activities in future. But in the estimate of many analysts, the Chinese economy no longer needs to behave in that illegal way.
A cursory check around any home or office here in the Kingdom will almost certainly show computer peripherals that are Chinese- built, or clothing items ranging from specialist sports garments to highly sophisticated trainers, that have been made in China. Few economists doubt that Asia is the new emerging hub of the global economy. How long it will be before Americans or Europeans are eagerly learning Chinese as a second language, remains to be seen, but it is hard not to think that this is the century in which the fulcrum of world economic power will move to China.
The current fashion is to refer to the new boom area as “The Pacific Rim” economies. This thus embraces not only Asia but also Australia and the Pacific coasts of the United States and Canada as well as Russia’s Eastern territories, centered around Vladivostock. This certainly represents the primary trading market for Chinese and Asian output, but the assumption is that the Russian, Canadian and US partners will somehow be equal partners in this new trading bloc. This seems unlikely. At best they will be used by the dominant Asian economies to establish local manufacturing plants.
The commercial dominance of the West is slowly coming to an end. The British Empire overtook the dominant economies of Continental Europe. It was in turn overtaken by the United States. The last century of the old millennium was assuredly the American trading century. But trade and empires move in cycles. There is an economic argument that the United States may already have passed the highest point of its commercial dominance. It is maybe in recognition of this, that Washington has dragged its feet over Chinese membership of the WTO. It may indeed prove that though the Americans have bowed to the inevitable over Chinese membership, they will prove to have plenty of further obstructions for Beijing up their sleeve.
America’s response to the emerging genius of Indian computer programmers has been to hire the most innovative individuals to work for US firms in the US, at salaries that could hardly be dreamt of back in India. In the short term, this is depriving India of some of its brightest and best in the world of software. In the long term however, such individuals will tend to return to India, richer in money and experience and ready to pass on their knowledge to younger programmers, who will stay in India because they will be offered good money. Chinese designers and engineers are demonstrating a similar native genius. It will be interesting to watch as American companies seek to hire such people to enrich their business processes.
