The good and the better on China

■"China Sets Its First Fuel-Economy Rules," by Keith Bradsher, New York Times, 23 September 2004, p. W1.

■"Guess Who's Invited to Dinner: Group of 7 Nations to Meet With China," by Elizabeth Becker, New York Times, 23 September 2004, p. C1.

The article says Beijing pushed the new rules in place (approved already, but not officially announced yet) out of fear for its soaring oil imports. True enough, but frankly the fear of rising pollution has something to do with these rules as well. How tough? Tougher than U.S. standards but a bit easier than the ones self-imposed by the auto industry in Europe to stave off regulation. Because the first phase is similar to our current standards, U.S. automakers aren't scared. And the most popular car in China, VW's Santana, will make the first-phase cut as well.

But everybody watch out for the second phase, beginning in 2008, because those tougher standards will have a ripple effect globally since China is becoming such a huge car market. Since the calculations are by weight, owning a minivan or SUV in China will be expensive, and that's just what the Chinese are hoping to discourage: big vehicles.

If that's today's good news, then the even better news is that China will meet with the Group of 7 for the first time next week, and everyone expects this historic event will kick start more serious talks about the country ultimately expanding the ranks of this very elite club. This is only a ministers' meeting, done on the side from the annual World Bank/IMF meetings, but it's a real tipping point in China's integration into the Core. The speed of entry will depend largely on how long it takes China to make the yuan convertible, signaling its clear willingness to share a deeper economic fate with the rest of the G-7 heavyweights. Does China rank among them yet? Yes, it's GDP is roughly similar to that of both Canada and Italy, G-7 stalwarts.

Interesting to note that Iraq and debt relief for Gap states dominate the rest of the agenda, showing yet again how naturally the G-7 has come to dominate as the main Old Core negotiating venue for not only Gap issues, but especially those with a security angle. Once that Old Core club expands to include New Core pillars, it's logical role as the system's functioning executive will be in place.

[As a weird sidenote, I was shocked to see that the Times' main title on the second story did not include a question mark at the end. Really!]