China move bodes well for WA harvest

CHINA’S accession to the World Trade Organization, hopefully by the end of this year, will be good news for WA.

About a minute after the gavel falls to signal China’s entry to the WTO, Taiwan will also be admitted. Nearly one hundred local businessmen turned up at the Hilton the other day to hear an Austrade briefing on opportunities offered by the tumbling tariffs and quotas and improved access to the market.

Miners, farmers, wine growers, lobster fishermen, computer software and telecommunications firms, smart card technology, web site designers and business and education services are among the leading likely beneficiaries.

WA is well represented in many of those activities

Commentators sometimes confuse the undeniable fact that there are many poor people in China with the proposition that China is a poor country, which is not altogether the same thing.

Certainly, there are 350 million farmers, with average landholding of only 0.35 hectares, and agricul-ture accounts for half the workforce.

It is true, too, that the painful restructuring of State industry has thrown tens of millions of people out of work.

However, the GDP of the vast country is put at one trillion dollars. That is a long way shy of the US$9 trillion worth of goods and services produced in America, but it is three times the size of Taiwan and 10 times more than any other Asian country bar Japan.

Exports from the People’s Republic of China are booming – up 39 per cent in the first quarter of the year to $51 billion, the best performance since 1995. GDP for the period grew a notch over 8 per cent.

Moreover, there is the awesome equivalent of US$700 billion of renminbi lying around in bank deposit accounts. The government is moving heaven and earth to mobilise some of that money into consumer spending to break the shackles of deflation.

Over the past few years, Chinese in the wealthier coastal cities have developed a taste for dry red wines. WTO opens the door for competition from foreign brands.

Tariff rates for Australian wine are to be cut from 65 per cent to 14 per cent.

There were some cynics in the Austrade audience who wondered if the PRC would seek to bend the rules, especially since the initial competitive shock will bankrupt many Chinese companies and hurt the rural sector.

Graeme Thomson, the Australian Government’s chief negotiator of the agreement, told them: “It is not a panacea for trade and there will be some problems. But it is a giant step forward”.

Longer term, the WTO is forecast to add 4 per cent to the country’s baseline annual grow rate.

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