January 28, 2000	atimes.com

China THE MIDDLE KINGDOM: I got mine By Bradley Martin Sure, the Communist Party is still in charge and communism remains the official ideology. Sure, rear guard elements still seek to protect state-owned enterprises from breakup, privatization and the vicissitudes of the market. But anyone who hasn't been to China lately and thinks that things haven't changed much should just check out Renmin Ribao, which these days publishes consumer stories from the consumer's viewpoint. Known in English as People's Daily, Renmin Ribao is the party's mouthpiece. Among other things, for decades it regaled readers with interminable exhortations to emulate model communist Lei Feng. Lei was an ordinary working-class fellow but with an exceptionally selfless heart - a heart that beat only for the masses. Children sang ''Learn from Lei Feng'' the way Western Christian kids sing ''Jesus Loves Me''. Oh, myriad were the Renmin Ribao stories illustrating Lei Feng's concern for the welfare of others. Perhaps to the relief of this column's readers, none of them will be repeated here. Rather, let us dwell on a January 14 article in Renmin Ribao's overseas edition entitled ''Sedan Prices Will Not Drop Dramatically After China's Entry to WTO''. The article reports that car dealers in Beijing started getting lots of phone calls from prospective customers after the Sino-US agreement late last year on China's accession to the World Trade Organization. What nine out of ten of the callers wanted to know was whether car prices would drop significantly after the WTO entry, on account of lowered import duties. It's an obvious question since, as Renmin Ribao reported, imported cars in China now cost about 2.8 times their international sticker prices. The short answer for the short run is that the prices won't fall all that much. First, under China's agreement to join the WTO, it will be 2006 before the country has to reduce duty to 25 percent from the current 80 to 100 percent (depending on engine displacement volume). And customs duty itself accounts for less than a third of the price of an imported car. There are consumption tax, value-added tax, customs clearance fees, commodity inspection fees. Eleven different fees including customs duty are added to the basic CIF (cost, insurance, freight) price of a car at the dock. The most the imports' prices might drop would be about 20 percent, says Renmin Ribao. And without much pressure to reduce its own prices the domestic car industry will keep charging what the market will bear, while focusing competitive efforts on quality. Still, there is likely to be a reduction in the overall cost of owning a car because the authorities are encouraging consumption - by reducing or eliminating associated fees other than customs duty. So should would-be car-owners buy now or wait? That's a tricky decision, says Renmin Ribao. Based on the foregoing facts, it's probably better to wait a little while to take advantage of price cuts based on the anticipated reductions in duty and fees. On the other hand - and this is something you never would have read in Renmin Ribao in the old days - ''experts'' advise buying now before the authorities change course and actively discourage car-ownership, the paper reports. ''In some parts of China, especially in those big cities with serious problems of traffic congestion and air pollution, measures will appear sooner or later to limit the total number of automobiles because giving priority to using means of public transportation instead of private cars is the only way to solve the problems of traffic congestion and air pollution in any part of the world.'' In other words, advises Renmin Ribao, get yours now and you can be part of the problem instead of part of the solution. Lei Feng would spin in his grave. (Special to Asia Times Online)

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