WASHINGTON -- Industry groups that lobbied furiously for congressional passage of permanent normal trade relations with China hailed today's overwhelming Senate vote in favor of the measure but counseled patience in predicting that the benefits of Chinese entry into the global trading system will emerge over time.
By a vote of 83-15, the Senate approved legislation OK'd by the House in May that clears the way for China's entry into the World Trade Organization (WTO). The Sept. 19 Senate vote followed a series of failed amendments on issues ranging from arms proliferation to human rights that threatened to scuttle passage this year.
"By opening, once and for all, the vast Chinese market, this legislation will also open broad new doorways of opportunity to our industry for exports and investments," said Jim Whittaker, chairman of the U.S. High Tech Industry Coalition on China and director of international public policy for Hewlett-Packard Co.
The industry group also stressed that the benefits of WTO membership for China will not be realized overnight. "Patience must be the operative word," Whittaker said. "But over time, the benefits will flow and extend to almost every sector of the U.S. economy."
U.S. chip makers also hailed the Senate passage. "The passage of permanent normal trade relations for China gives the U.S. trade advantages in China that China currently enjoys here in the U.S.," said George Scalise, president of the Semiconductor Industry Association (SIA).
SIA estimates that the $8 billion Chinese semiconductor market will become the third largest in the world within the next year and the second largest by 2010. Under the agreement, China agreed to eliminate its semiconductor tariffs by 2002.
However, the biggest prize might be China's booming telecommunications market. According to industry estimates, China is fast becoming the world's second-largest market for cellular phones with 40 million subscribers at the end of 1999. Under WTO rules, 12% tariffs on cell phones would be eliminated in three years
China is also one of the fastest growing markets for semiconductor manufacturing equipment. The country's market is expected to nearly quadruple by 2003 to $4 billion billion, said the Semiconductor Equipment and Materials International (SEMI) trade group, based in San Jose. "Today we have taken a giant step forward towards realizing the potential of the China market," said Stanley Myers, president and CEO.
--Additional reporting by SBN