His army of textile machines throbbing in the background., Zhao Jingui pondered, like thousands of company executives across the mainland, what entry into the World Trade Organisation will mean. 'It has to be good for us since we make textile fabric. Chinese fabrics are subject to quotas in Europe and the United States, which will be abolished in 2005,' said Mr. Zhao, vice-general manager of the Zongheng Group, which will turn out 120 million metres of fabric this year, making it the mainland's biggest producer and Asia's third largest. 'Exports account for about 10 per cent of output now. With WTO entry, it will be 30 per cent 10 years from now,' said Mr. Zhao. 'It also means that, with lower tariffs, we will import more of our raw material synthetic fibres from South Korea, Taiwan and Japan. Currently, we use only Chinese-made material,' he said. Shaoxing should benefit after an agreement between Beijing and Washington was signed last Monday, removing the biggest obstacle to the mainland's WTO entry. Officials are now speaking of the country becoming a full member by March next year. Shaoxing makes textiles and light industrial goods, which accounted for 54 per cent of US$2.64 billion worth of exports in the first nine months of this year. Ending of textile quotas and WTO member countries giving Beijing normal trade relations status will greatly broaden the export market for goods in which the mainland is globally competitive, such as garments, toys and shoes. Shaoxing, a city of 4.2 million in the centre of Zhejiang province, makes all of these. It can produce two billion metres of textiles and three billion metres of dyed fabric per year - - 15 and 20 per cent respectively of the national total. It is also the mainland's biggest fabric market, with a turnover of 1.5 billion metres and 15.1 billion yuan (about HK$14.09 billion) last year. City officials said WTO entry would also stimulate labour export, with 79 construction firms employing 300,000 people. They have built roads, railways and sports stadiums in Thailand, Cambodia and Africa and sent engineers and technicians to Singaporean factories. Entry will also attract foreign investment, they said. Chen Zhongming, head of the city's township and village enterprises bureau, which accounts for more than 80 per cent of its GDP, said WTO was good news because its firms needed new markets. 'The domestic market for many goods is saturated. This will open up new markets and end quotas on our textile exports. We are lucky. We have no auto industry and not much electronics production.' Wang Qiang, the city's foreign trade and economy bureau director, said that entry presented threats as well as opportunities. 'It does not mean there will be no obstacles to our imports. Foreign countries can use ways other than quotas to limit our exports, such as technical and packaging restrictions, minimum prices and environmental reasons, saying that our dyeing methods are polluting,' he said. He said entry would have a severe negative impact on finance, telecommunications, commerce, agriculture, petrochemical, and car and electronics industries - the latter two the worst hit. Lower tariffs and a more liberal import policy will increase flow of foreign products to these sectors. Mr. Zhao said entry would be a mixed blessing for the petrochemical industry: 'It will be good for the refiners since they will be able to import cheaper raw material but will be bad news for domestic producers of crude.' Production costs are usually higher than abroad. The official press, of course, has put a positive spin on the agreement - part of the government effort to sell it to the public and overcome strong opposition from many in government and state companies who see it as selling out to foreign interests. 'State firms still have five years to turn themselves round and adapt to the market,' said the Zhejiang Daily. 'But the pressure from foreign firms will intensify and threaten the survival of state firms with backward technology and poor-quality goods. The impact on national industries will be enormous.' It continued: 'But our exports of labour-intensive products no longer made in developed countries will rise, expecially synthetic garments which are subject to all kinds of tariff and non-tariff barriers. After the ending of quotas in 2005, our share of the textile market in Europe and North America could rise to 35 per cent from 15 per cent now,' it said. 'It will be a bonanza for exporters of shoes, china, refrigerators and colour televisions. It will be like fish swimming in water.' But leave the last word to a local taxi driver. 'Once we get into WTO, I will be able to get rid of this bad Santana car and buy a Japanese one, preferably a Honda. Japanese cars are best for us because we drive a lot and they save petrol. American cars are too big and use too much petrol,' said the driver. 'It will be good for Zhejiang as we have few big state companies and many small and medium-size firms. The biggest plant is a steel mill in the capital Hangzhou employing 30,000, which is nothing compared to Capital Steel and the giant state firms in the north,' he said. 'WTO will be good for China south of the Yangtze, which makes light industrial goods but spells the end for China north of the river. The big state firms will close and their workers will be laid off, living on 300 yuan a month paid by the government.