The Hong Kong stock market has been riding high since news broke that United States President Bill Clinton had called President Jiang Zemin at the weekend to work towards a deal on Beijing's entry to the World Trade Organisation. Optimism has been partly fuelled by the inclusion of US presidential aide Gene Sperling, who is head of the influential National Economic Council, and officials from powerful ministries such as the State Department, the National Security Council and the Treasury, in the US negotiating team. Since the talks began on Wednesday in Beijing, the two sides have sounded more upbeat than before, with the mainland's foreign trade minister, Shi Guangsheng, quoted yesterday as saying the country had 'high hopes' of joining the global trade body by the end of next month. US Trade Representative Charlene Barshefsky described her talks with Mr Shi as 'more substantive and detailed' than previous meetings. Beijing has to conclude a deal with the US before WTO members' trade ministers meet in Seattle from November 30 to December 3 to launch a new round of global trade talks. If it fails to do so, it will have to pay a higher entry price the next time, because the Seattle round is expected to impose more stringent trade and investment rules for member countries. So, the 11th hour talks could be make-or-break for Beijing's 13-year bid for WTO membership. Yet behind the apparent euphoria lurks a note of caution, particularly from the US side. Ms Barshefsky's deputy, Richard Fisher, said in Washington as the talks were going on in Beijing that 'unless it's a good deal, it is not going to happen'. Mr Clinton, after his call to Mr Jiang, refused to rate the chances of a deal. A White House official said after the call: 'Things didn't sound as positive as we like . . . [but] there was very little to lose by trying.' Mainland economists are also cautious in their assessment. Luo Zhaohong, an economics researcher at the China Academy of Social Sciences, rated the chances of a deal at 50-50. Wang Lingyi, economist with the Shanghai Academy of Social Sciences, gave the deal 70-30 odds of being pulled off. This is not to suggest a deal cannot be hammered out; anything is still possible at this juncture. But the nature of the negotiations have changed since the two sides last talked about WTO at the Asia-Pacific Economic Co-operation forum in Auckland. What has changed? In one word, politics - which explains why officials from the State Department and National Security Council are involved in this last-ditch bargaining. Beijing has been extremely upset by Washington's refusal to co-operate in its attempt to outlaw the Falun Gong spiritual movement, as well as by support of the US House of Representatives for a non-binding resolution backing Taiwan's entry to the World Health Organisation. Also upsetting mainland leaders is the passage by the House International Relations Committee of an amended version of the Taiwan Security Enhancement Act, calling for increased military contacts between the island and the US. Although these two US House actions are unlikely to be supported by the Clinton administration, they do reflect the widespread support that is enjoyed by Taiwan in the Republican-controlled Congress. If Beijing is reassured that the Clinton administration can scupper these attempts to shore up Taiwan in Congress, it is prepared to give way on some of the thorny issues in the WTO talks, such as on the financial sector, telecommunications and services. But, more significantly, Beijing wants to secure Washington's support in eradicating the Falun Gong sect. The mainland has sought the extradition of the movement's US-based leader, Li Hongzhi, but Washington has refused. To add insult to injury as far as Beijing is concerned, Washington has just given political asylum to a Falun Gong practitioner. Mainland observers said that if Washington could offer satisfactory arrangements on these sensitive political issues, Beijing would cross the t's and dot the i's for a deal long awaited by the US community in the mainland.