Commerce Secretary Optimistic After Beijing Talks

Don’t give up on China.

That was the message Wednesday from top U.S. trade officials after intensive talks here this week about bringing China into the global trading system and opening its markets.

Though “significant gaps” remain just a week before China Premier Zhu Rongji travels to Washington, China and the United States are closer than ever to an agreement on China joining the World Trade Organization, U.S. officials said here.

“We’re down to the final, most difficult details,” said Commerce Secretary Bill Daley. “I’m cautiously optimistic that there will be a deal.”

China has given cause for optimism in the last few days, officials said. In last-minute talks with U.S. Trade Representative Charlene Barshefsky, on Monday and Tuesday, Beijing put forth significant concessions on access to its market for telecom operators, bankers, insurance agents--maybe even Hollywood.

On the table for the first time are proposals to issue more licenses for foreign insurance companies to operate in China--right now there are only two--and allow U.S. banks to have wholly owned branches within eight years. Previous negotiations had limited them to joint ventures.

On Wednesday, Daley presided over another first: a framework agreement between AT&T; and the Chinese government to provide telecom and Internet services in Shanghai’s new business district.

Until now, foreign companies have been banned from direct participation in the telecom sector. Daley also said he received assurances from Zhu that China would use a mobile telephone technology--code division multiple access (CDMA)--that is widely used in the United States.

The move would benefit U.S. telecom equipment giants Motorola Inc. and Lucent Technologies Inc., who are poised to sell $500 million of technology to the country’s sole CDMA operator, Great Wall.

But Daley won’t be presiding over the contract signing scheduled for Thursday. It seems Great Wall is half-owned by China’s military.

Though he says plans for him to preside “were never firmed up,” political tensions over leaks of sensitive technology to China’s armed forces made it prudent for Daley to find other things to do on his last day in China than pose with a member of the People’s Liberation Army.

Even so, Daley warned business leaders not to let current tensions interfere with business relations.

“Now is not the time for American businesses to give in to those who would turn China into our enemy of the next century,” Daley told a group of U.S. business leaders here Wednesday.

Jack Valenti, head of the Motion Picture Assn. of America and a member of Daley’s delegation, is not one to give up. He has pounded on Beijing’s door for years, asking it to open up to Hollywood.

Concerned about “spiritual pollution” and the potential that its own film industry would be swamped by American blockbusters, China allows only 10 U.S. films to be released in the country each year.

But Valenti said he came away from Beijing with new hopes that the quota will be expanded to 17 next year and 24 in 2001.

“I have a glimmer of hope,” Valenti said Wednesday of his meeting with Ding Guangen, China’s propaganda chief. “No pledges were made. But he said, ‘We’d like to introduce more films.’ ”

After years of rejection from the ministry, Valenti met Ding for the first time and said he was “to my amazement, quite likable. He’s the kind of guy I’d like to have dinner with and talk movies.”