China's market reform slowing, US official says

BEIJING - China's blazing economic growth and the impending end of a timetable for meeting its World Trade Organisation (WTO) commitments risk dulling Beijing's appetite for market reforms, a leading US trade official has said.

Franklin Lavin, US Under Secretary of Commerce for International Trade, told a meeting of US business executives in Beijing that these two factors "risk creating an atmosphere where not only is the sense of reform fading a bit, but there's even a potential for retrogression".

"The sustained high rates of economic growth that we've seen over several decades now - I think it starts to inure policy leaders from the need to reform."

When China joined the WTO in 2001, it agreed to open its financial, retail and service markets, and many of those commitments are due for final implementation by the end of 2006.

But Lavin said US businesses were worried that China's appetite for foreign investment was waning and that Beijing's promotion of its own technology standards - including its own mobile telephone technology standards - could discourage international competitors from entering the country.

"The government shouldn't set the standard, but let the market set the standard," he said.

China's rapid economic growth was nonetheless stoking a growing appetite for US exports and longer-term trade prospects remained promising, Lavin said.

China was likely to surpass Japan as the third biggest destination for US exports some time this year, he said.

- REUTERS