China's Responsibilities

SINCE JOINING the World Trade Organization in 2001, China has proved serious about honoring its commitments. It has rewritten laws and regulations to comply with WTO rules, so much so that the United States and the European Union, which bring high-profile cases against each other before WTO tribunals, have a hard time identifying cases to bring against China. But China is treating its WTO commitments as a ceiling, not a floor. It appears unwilling to modify its behavior in other areas, and this may strain its relations with the United States.

China's currency policy is a case in point. Last summer China allowed its currency to appreciate by 2 percent against the dollar, and it hinted that more steps would follow. Since then, the Chinese yuan has barely risen, and its continuing undervaluation has fueled an enormous trade surplus. This invites a protectionist backlash in the United States. Sens. Charles E. Schumer (D-N.Y.) and Lindsey O. Graham (R-S.C.) have proposed legislation that would impose punitive tariffs on China until it fixes its currency policy, and a majority of senators appear to back the idea. Last year the Bush administration persuaded the Senate to hold off while it talked the Chinese into revaluing for their own good: A flexible exchange rate would help China avoid boom-and-bust cycles. But China's refusal to take more than baby steps is undermining the administration's efforts to restrain Congress. Mr. Schumer plans to return to the currency issue in upcoming Senate hearings.

China also could do more to abide by the spirit as well as the letter of WTO rules. Intellectual property protections illustrate the point: Chinese laws comply with WTO requirements, and music or film studios that file complaints about copyright violations tend to have their complaints upheld. But this barely dents the rampant piracy in China because the pirates build the modest fines into their cost of doing business. Yesterday Rob Portman, the U.S. trade representative, issued a "top-to-bottom review" of U.S.-China trade relations that spotlighted other areas of concern. China's government procurement should be more transparent. It should quit smuggling subsidies to domestic firms through WTO loopholes.

China also needs to rethink its sinister policy of turning U.S. Internet firms into police auxiliaries. It has recruited Cisco Systems to build a system of Internet routers that blocks Chinese users from foreign Web sites deemed unsuitable by Beijing's censors. It has ordered Yahoo to surrender the names of e-mail users who subsequently were imprisoned. It has allowed Google and Microsoft to offer services in China provided that they bow to censorship. China needs to understand that neither Congress nor U.S. public opinion is likely to allow American companies to carry on this collaboration forever. House hearings today featuring all four firms signal that China's Internet policy has joined the list of flash points in bilateral relations.

China's emergence as a global economic power over the past quarter-century has been a wonderful thing, lifting hundreds of millions of people out of poverty. But China is now too big to get away with a minimalist definition of its obligations to the outside world. Its currency policies affect global trade imbalances. Its intellectual property protections affect the value of copyrights worldwide. Its 100 million Internet users are bound to attract the attention of Western advocates of free speech and their allies in Congress. Riches and power bring broad responsibilities.