Champagne corks exploded yesterday after China secured a groundbreaking deal with the West on its membership of the World Trade Organisation, opening the communist-ruled country to unprecedented economic competition with capitalism. The agreement, to be formally approved at the WTO headquarters in Geneva tomorrow, ends a 15-year waltz between the Chinese negotiators and the 142-nation WTO.
Providing for Chinese entry by the end of the year, it will set a strict timetable to open up the country's economy.China is the world's fifth-largest trading power, after the United States, the European Union, Japan and Canada. The West had maintained fairly tough conditions after the Chinese, who describe their hybrid economy as a "socialist market", tried to obtain membership without making enough concessions.
The successful bid for entry is a major achievement for President Jiang Zemin, who also managed to swing the 2008 Olympics in Beijing's favour. But his decision is a huge gamble, when millions in the massive state-protected workforce are already heading for the cities from the countryside in search of work.
China will have to complete many economic reforms the government had been stalling on. Easier ones have been implemented, in that Beijing has opened to foreign investment, yet managed to keep some of the sensitive sectors of the economy out of foreign hands, notably power, telecommunications and financial services.
Now Beijing will also have to accord with a rules-based system it has never experienced. The more optimistic analysts hope the new rules will force China to become more accountable generally. Millions of Chinese work in unproductive industries such as coal mining and construction. One of the big questions will be how the country will cope with large numbers of unemployed workers.
Another concern is agriculture. Conservative economists fear that once the might of the American agro-business is let loose in a country where grain prices are artificially high, China's inefficient labour-intensive sector will suffer.