Moore on trade deal

Mike Moore, former Prime Minister of New Zealand and former Director-General of the WTO has an opinion piece in the New Zealand Herald under the title Global alliances training the tiger. He writes

China has only become integrated into the global economy over the past 20 years. The results for China have been stunning - hundreds of millions of people have been lifted out of extreme poverty.

This is lifting living standards worldwide, has kept global inflation down, and stretched families' purchasing power. And in part, this is why the last 10 years has seen the most sustained economic growth in history.

There are some who oppose New Zealand's trade deal with China, and want a boycott of the Olympics. It's precisely because China depends on the global trading system that world opinion on human rights now matters to the Chinese.

Thirty million people perished during the cultural revolution and Mao's great leap backwards. World opinion didn't matter to the Chinese then. Now it does, and that's a good thing.

China is going through the same process as Japan, Singapore, and places like Taiwan. As living standards rise, a middle class emerges that seeks out better social outcomes. Wages in the Pearl River delta in China rose 13 per cent last year.

Seven thousand factories will close this year because wages have moved up and these jobs will head inland, or to Vietnam, even Africa. This is the virtue of free markets and globalisation.

For the first time the Chinese Government is answerable to its own laws - you can now sue the Government.

Progress has been made in China on many fronts, economic, social and political. Clearly there is much more to be done, as the situation in Tibet shows, but the way to influence China is to engage with it, to integrate it into the world economy so that world opinion, on issues like human rights, can not be ignored. The more China integrates into the world economy the more it depends on the rest of the world and so the less it can afford to ignore outside views.