China Warned to Open Markets to Foreign Goods

U.S. Trade Representative Clayton K. Yeutter on Wednesday called on China to open its markets wider to foreign goods and competition and warned of a “long, hard road” for the country’s economic growth unless it did so.

Yeutter, in Beijing to sign a textile trade agreement and discuss China’s application to join the General Agreement on Tariffs and Trade with Chinese officials, said import barriers and constraints on foreign investment would hold back the country’s modernization.

“Clearly China needs foreign investment. . . . But investors are not going to be enthusiastic about coming to China unless they have an opportunity to market their products in China,” he said.

China’s avowed policy is to encourage joint Sino-foreign and foreign-owned enterprises to produce goods for export to earn foreign exchange, and it restricts the domestic sales of their products.

Beijing’s joint-venture policies were too inflexible and did not encourage competitiveness, Yeutter said.

Freer domestic markets would “hone the competitive edge” of China’s own industry, he told a news conference.

He acknowledged that China’s policies since the 1970s were “moving in the right direction,” but said: “The level of economic growth it hopes for . . . may not come as easily as China anticipates.