Barshefsky: WTO Gives China's Auto a Lot

　　Editor's Note: On September 16, 2010, the curtain of Global Automotive Forum rises in the city of Chengdu. The theme of the meeting is "Shaping the future of an industry in transition". This year's discussions at the Forum will cover the key issues and challenges shaping the future of the auto industry as it goes through a critical era of transition - including the impact of China's auto industry emergence and the center of world auto industry shifting.

　　During the meeting, senior U.S. law firm WilmerHale partner and former U.S. Trade Representative Charlene Barshefsky received an exclusive interview with Chinese media.

　　Media: You have been dealing with China for more than 10 years. Starting from China's accession to the WTO, you have been holding such trade negotiations between U.S. and China. I would like to ask you two questions. First, what changes do you think occurred in Chinese car market in the past decade? Second, global car market is faced with what kind of development under circumstance of current economic recovery?

　　Charlene Barshefsky: Thank you for your question. As you said, I have been dealing with China for 20 years. For me, it is hard to describe China's great achievement in current modernization and development, as well as various changes you have said. China is becoming more open to the world. China’s economic reform has been carried out in full swing when I held negotiation about China’s accession to the WTO with Chinese representatives. Compared with economic growth in 15 years ago or 20 years ago, China's economic growth today is particularly fast. I believe it is because China joined the WTO. In my opinion, ongoing modernization of China not only contributes to rapid economic growth of China in the past 10 years, but also still gives the Chinese people very positive psychological impact.

　　Such a trend is also reflected in China's global influence is gradually increasing. Speaking of the economic situation of Chinese car market, I'll describe in details in my own keynote address. I believe that when implementing strategy of going out and exporting more cars to the world, China should make more detailed plans. I will consider China’s auto exports from perspective of political reality. During my own keynote address, I will explain the current competitive environment of global car market. Under the current competitive global car environment, I think China should find more detailed and constructive plans to overcome challenges imposed by auto exports.

　　Media: China’s auto industry has been in rapid growth since China joined the WTO in 2001. Moreover, status of China’s auto industry keeps rising in recent years. You are familiar with Chinese car market when held negotiations about China’s accession to the WTO, so we hope you can express your opinion about self-development of China and China’s accession to the WTO, which is more prominent for promoting China’s rapid economic growth and rising status in the world?

　　Charlene Barshefsky: I think it is because of China's accession to the WTO, for it allows a wider and deeper range of internal reform, in other words, accession to the WTO plans an important role in facilitating China’s economy. The success of China's WTO accession also contributes to the rapid growth of world economy, especially in the case of the current economic crisis. Of course China’s enjoyed many preferential policies because of accession to the WTO such as China's exports. In the past, export destinations of many China’s exports couldn’t afford prices of Chinese foods. Meanwhile, I believe that China's economic recovery, China’s investment in other countries as well as the effective supervision of Chinese government also play an important role.

　　Media: American Iron and Steel Institute has just proposed a relevant application to relevant department of U.S., claiming there is the tendency of trade protection about Chinese government’s subsidies for the new energy industry, including new energy vehicles. In addition, the organization also claimed China had violated WTO’s competition rules, becoming a hot spot of Sino-US trade. Do you think this will leads to friction auto industry between China and US? Whether it is the same as US’s treatment of Toyota or not?

　　Charlene Barshefsky: In accordance with WTO rules, I think that appeal of American Iron and Steel Federation is acceptable. Any country can’t conduct trade protection in the export activities, including government subsidies, etc. According to some WTO rules, I think China’s subsidies for new energy vehicles couldn’t be called as trade protection. WTO allows any member makes such allegation, but we're not sure whether the current allegation against China is right or not. Sometimes China becomes defendant in international trade, with sometimes as plaintiff, but all of these WTO members must comply with WTO some criteria. China's auto industry or the auto companies actually receive government subsidies in the development, measures such as lower prices exports stimulus plan to encourage export cars to other countries are easily alleged under WTO rules. I think it is necessary for us to find appropriate channels for resolving disputes. USA and China have a very strong relationship, and there will be many channels to resolve disputes. A few years ago we noticed that there were not many such channels. If problems arise, Sino-US relationship tends to become very fragile, but now the situation has changed, we have many channels to resolve disputes. At present, a strong Sino-US relationship provides a powerful channel to resolve these disputes.

　　Media: You are involved throughout the whole process of China's accession to WTO, during the accession negotiation you were supposed to imagine changes China will undergo after accession to the WTO, so could you compare current development situation of China with your original imagination? Especially did you imagine future development scene of China's auto industry? The second question is we know that today there are two themes for the Global Automotive Forum, one is future with the one is the transformation, could you point out the meaning of the two key words for China’s auto industry. The third problem is now the U.S. auto industry is faced with two key words, one is future with the other is transformation, do you think it is possible for China and USA build partnership on this field?

　　Charlene Barshefsky: As a matter of fact, I have imagined changes China would undergo after accession to WTO many years ago, when I did not enter the Clinton cabinet. I think it is necessary for China to enter WTO. The reasons are as follows. First of all, China's population account for one-fifth of the world's total population. Second, China has a very glorious history, so the true meaning of China's rise is just a matter of time. With the rise of China, it is important for international community to see the process of China's rise must be done in line with international standards. China's economic growth rate was better than many economists’ prediction after accession to the WTO.

　　Currently, it seems to me that China’s achieved unprecedented economic speed is actually very normal. Speaking of some expectations on China’s auto industry, actually it was difficult to make a separate comment on the auto industry, because we needed to prepare thousands of pages of documents during the accession process, and these documents were related to the entire China’s economy, so from current point of views it was difficult to make a separate comment on China’s auto industry. Your second and third questions are about the future transformation, in fact, this is a profound issue. With the re-emergence of China, the world economy has changed. For the developed countries, transformation involves various aspects.

　　Of course, it is a very complicated issue for China’s successful transformation. I have been convinced that countries of the world should learn from each other, so I hold the opinion that cooperation between China and the U.S. will be in scope and depth, not only in a small area of cooperation, that is, the cooperation should be larger and in the more important field.

　　Media: How do you see the development of alternative energy sources?

　　Charlene Barshefsky: I think China has already invested considerable resources, manpower as well as time in alternative energy development, and China is entirely possible to achieve a world leader in fields such as wind power and solar energy. Of course, this will impose increasing pressure on the global auto manufacturers, which will force them to intensify efforts. For China, the development in alternative energy sources will bring pressure on auto manufacturers, so China has potential to be a leader in this field. (Translator: Qinghua/Wade)