Five years ago today, China acceded to the World Trade Organization. {loud cheers}

Some reflections on the topic in the press today, many of which centered on the coming into effect of the new regulations on foreign bank activities. Xinhua tells of mixed success:

China marked five years of World Trade Organization (WTO) membership on Monday with new regulations opening the financial sector to foreign banks coming into effect, while business people and economists counted the pros and cons of freer trade.

    Once branded a "threat to financial security," the entry of foreign banks into Renminbi business has sparked curiosity about what new products and services will become available to Chinese customers and whether new management mechanisms will affect the market.

    "The introduction of competition and strategic investors will be conducive to improving innovation, management and profitability of domestic banks," said Wang Zhaoxing, assistant to the chairman of the China Banking Regulatory Commission.

    Three of China’s leading four state-owned commercial banks — the Bank of China, China Construction Bank and the Industrial and Commercial Bank of China — have listed overseas. Their shares have been well received, signaling confidence in the development of China’s banking industry.

    The prediction that "free trade will come with threats," made by Long Yongtu, China’s chief negotiator for WTO membership five years ago, has been replaced by awareness of the fact that threats failed to come, but free trade has been difficult to achieve too.

    WTO statistics show China has been subject to most of the international anti-dumping litigations for 11 consecutive years.

    China’s textile businesses had barely escaped the old quota system before they entered a "new quota era" imposed by the United States and the European Union, a move seen by the Chinese side as protectionism.

The other side of the argument was presented today by Susan Schwab, U.S. Trade Representative, who sounded off quite negatively in the Financial Times:

US-Chinese relations are in jeopardy because Beijing is slowing the pace of reform and putting the global economy at risk, Washington’s chief trade negotiator said on the eve of a high-level delegation to China.

The Bush administration has identified “troubling indications that China’s momentum towards reform has begun to slow” in the last year, according to Susan Schwab, the US trade representative.

The negotiator said the US was ready to initiate new trade disputes and retaliate against China if reforms were not stepped up following this week’s strategic economic dialogue led by Hank Paulson, Treasury secretary.

The warnings reflect pressure on the administration from the US Congress to be more aggressive with China over the value of its currency and the growing trade imbalance between the two countries.

The FT news article on the subject is here, while Schwab’s FT editorial can be found here.

A more balanced piece of journalism was in Reuters, which presented both sides’ political arguments of the day as well as some background on potential future disputes, including a possible U.S. filing of a WTO dispute resolution against China for failing to adequately enforce intellectual property rights. Lots of fun quotes from Chinese officials, Susan Schwab, and even WTO Director-General Pascal Lamy.

I hope you enjoy the day as much as I have.