"Your politics may have improved. Ours have worsened," Chinese Prime Minister Zhu Rongji told Treasury Secretary Lawrence Summers in the remote provincial capital of Lanzhou on Oct. 24. The subject was China's stalled bid for membership in the World Trade Organization.
Zhu then added a sentence: "You have to want to do it." This alerted Summers to two probabilities--Zhu has a fine sense of irony and China was ready to make the U.S.-China deal on WTO that President Clinton had fumbled in April.
The Chinese official echoed almost exactly the crucial phrase Clinton had spoken to him in the Oval Office last spring. Summers quickly cabled back to Washington a full account of Zhu's message. Those who saw the memorandum concluded that the WTO deal was within reach.
They were right. The accord was signed in Beijing Nov. 15. It will probably go to Congress for review early next year as China negotiates similar undertakings with other nations in the 135-member organization, which is charged with promoting trade liberalization.
Then the hard negotiating will start. History suggests the rest of the world will have to push China's leaders almost daily to keep their commitments, which include overhauling China's bloated, faltering state industries--the economic heart of Communist rule--and opening up a market that now imports fewer foreign goods than does Belgium.
I confess to skepticism on the proposition that Beijing's Leninist leadership has decided to go quietly into the dark night of economic determinism. The ruling gerontocracy has shown itself able to imprison or kill those who suggest it should loosen its grip on power.
But the WTO route is worth trying. China takes a much bigger gamble by joining the trade body than the rest of the world takes by letting it in on commercially viable terms. Like the Sandinistas in Nicaragua or Poland's Communist regime agreeing to the free elections that turned them out of office, the old men of Beijing may be overestimating their ability to control forces they are about to set loose.
If China accepts the financial transparency and the rule of commercial law the WTO requires, Chinese society at large will benefit. But if China refuses to live up to these engagements, Beijing will live in constant friction and distrust with the rest of the world (and with China's own younger generation). We skeptics will then have a lot more company.
There are two important conditions, however. The United States, Europe and Japan must be serious about the rules they woo China to accept. The methods and scope of commercial retaliation for backsliding or stalling by Beijing must be made explicit in congressional debate and enabling legislation. And the United States must commit itself to securing WTO membership for Taiwan as China joins the organization, as Republican front-runner George W. Bush has suggested.
In the crucial Lanzhou meeting, Zhu set two important conditions of his own. Summers's handling of the Chinese demands helped break the stalemate Clinton had unwittingly ushered in last April when the president told Zhu China had to want the deal. That formulation, urged on Clinton by Summers and his then-boss at Treasury, Robert E. Rubin, was intended to buy a month's delay in which U.S. business support would be mobilized to lobby Congress. Treasury wanted to reposition the ball a few yards downfield--not call a timeout.
But Zhu heard the president being more pessimistic than intended and halted the talks. The bombing of the Chinese Embassy in Belgrade in May stopped all important U.S.-Chinese dialogue and "worsened" Zhu's chances at home, as he immediately reminded Summers on Oct. 24.
China needed two assurances, Zhu said: First, membership in WTO must end the annual congressional review of trade relations with China. Summers promised only what he could promise: a good-faith effort to persuade Congress to drop the review.
On the second point, Summers was more forthcoming. Zhu said China could not accept a general safeguard clause--a device that would let the United States set anti-dumping and other measures in certain circumstances--and Summers agreed to give away something his department had assumed all along would have to be surrendered. The ball was back in play.
These U.S. concessions were about form more than about substance. They can be compensated for by clear enabling legislation spelling out trade retaliation consistent with WTO rules and by hanging tough on Taiwan. Beijing should not choke now. After all, both sides have to want to do this accord.