Wider access for professionals as tough nut finally cracked
The mainland service sector - one of the world's most closed markets - is one of three strategic areas foreign companies have been trying for years to gain greater access to.
The other two sectors are agriculture and industrial goods.
Under the bilateral agreement signed yesterday between Washington and Beijing, the mainland has agreed to expand access, in varying degrees, to its banking, insurance, telecommunications, legal and other service areas.
The move could pave the way for further liberalisation of sectors such as distribution services (wholesaling, direct sales and retailing) and financial and professional services.
Foreign companies reacted positively towards Beijing's move despite the scant details revealed.
Amway China chief Eva Cheng said: 'Amway is absolutely thrilled that an initial agreement has been reached. We believe there is profound positive impact.
'We have invested heavily in China and have gone through this roller-coaster ride [in the] past year, keen to see China's accession.' The announcement from the US embassy in Beijing yesterday said mainland access would be improved for US professionals such as lawyers, accountants and medical-services providers.
Baker & McKenzie partner Michael Moser said: 'China's accession will have a very positive impact on the businesses of lawyers, accountants and consultants - directly and indirectly.' Earlier proposals from the US negotiators hinted at a degree of liberalisation in the professional-services sector, he said.
'We understand that it's China's intention to relax its restrictions to open a greater number of cities for lawyers and to remove the one-city, one-office requirement,' he said.
Mr Moser said the indirect impact on the professional-services sector would be even more significant.
'The WTO accession will spark a new round of foreign direct investment in China, so a number of companies who over the past two years have been looking outside may be tempted to come back,' he said.
'At the same time, the WTO will increase competition for many state-owned enterprises who may want to find strong partners from the developed economy, and this will encourage a new round of mergers and acquisitions.' Hong Kong General Chamber of Commerce director Eden Woon said: 'If foreign companies can get into the distribution sector, that will greatly facilitate the movement of goods in Chinese domestic markets.
'It is expected the retail market will be opened up and restrictions imposed on many of the experimental cities will be removed. So the China market should have more opportunities for foreign companies.' SERVICES