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The numbers game

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ON A RECENT visit to the South China Morning Post, economist Nicholas Lardy got worked up, as economists do, about numbers.

Why he got excited can be summed up in three letters: WTO. A small but influential group of China watchers say that China has lied about its growth and the openness of its market.

The critics - call it the revisionist school of Chinese economic performance - argue that China's entry last December to the World Trade Organisation will trigger the collapse of an economy already sagging under rising unemployment, growing income inequality, and economic mismanagement.

Rather than open its market to the world, so this school contends, China will follow in Japan's footsteps, exploiting WTO loopholes to keep its market closed.

The reduction of China's spectacular growth to fiction may make sense from the point of view of playing devil's advocate, but it cripples the political logic that Beijing used to push forward its WTO membership during 15 years of negotiations.

Beijing sold the deal by arguing that WTO would be good for China by enhancing its prestige and strengthening its economy. If neither result pans out - or if WTO is perceived to undermine China's prestige and damage its economy - the reform process, as well as the politicians behind it, may be endangered.

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