Meet the Street: Hoping to Serve Billions and Billions in China

The proponents of global free trade welcome a new and formidable ally today: China.

Desmond Wong, National Director for China, Ernst & Young

Recent Meet the Streets

Advantus Mortgage Securities' Kent Weber

TeenAnalyst.com's Chris Stallman

Putnam Investments' Robert Goodman

Harvard University's Jeffrey A. Frankel

Evergreen Investment Management's Prescott B. Crocker

Predictions of China as the next economic juggernaut gained credence on Nov. 10 when the World Trade Organization announced a breakthrough accord in Qatar. Highly prized as a source of 1.3 billion potential customers, China becomes an official member of the coalition today 30 days after ratifying the 1,500-page pact binding it to the values of free trade.

There is no denying the significance of China's newly acquired status as a WTO member, says Desmond Wong, partner and national director of China for Ernst & Young. According to Wong, who specializes in helping Western companies succeed in the Chinese market, there will be broad economic, commercial and social implications of implementing free trade in China.

For one, the jostling among international players for a hearty slice of the Chinese pie already is under way. U.S. multinationals, which already have a presence there, will be the natural beneficiaries of an open and liberal China, Wong says.

Wong also believes that China's entry into the WTO will kick off a march of progress. Sure, it'll take a few years for foreign companies to penetrate certain commercial sectors in China, just as it'll take a long process of growth and liberalization to firmly establish the Chinese equity market.

But U.S. firms and investors alike should pay heed to China, whose enormous potential lies in its billion-plus citizens vying for middle-class status, according to Wong.

TSC: How significant is the entry of China into the WTO?

Wong: It's very significant from China's standpoint. The Beijing government really pushed very hard for it, and it has broader implications other than economics and commerce; this is really going to open the whole country to not just commerce but also Western ideas. I think China's leadership really wants to be part of the international trading community, so I feel it's a very good thing for China and the rest of the world as well.

TSC: On that note, how will the U.S. stand to benefit?

Wong: The U.S. is in a very good position. There are companies like the Dow 30 companies, such as General Motors (GM Quote), Procter & Gamble (PG Quote), McDonald's (MCD Quote) and Coca-Cola (KO Quote), which have invested significantly and have a very strong presence in China as we speak. ...