(IPS) feature By becoming a full-fledged member of the World Trade Organisation (WTO) last weekend, China completes a long and arduous journey in achieving a national milestone.

Yet when Chinese officials sign on Sunday the official documents for China's admission into the trade body at the WTO fourth ministerial meeting in Doha, Qatar (Nov 9-13), they may be feeling more trepidation than joy.

Despite all the talk of China's immunity to the global economic downturn, Chinese leaders are now being forced to slow down major parts of their reform programme at a time when the economy can least afford it.

Two policy reversals - one to halt the sale of government stakes in the state-owned enterprises on the stock markets, the other ordering a freeze on the bankruptcies of larger state enterprises - indicate that market forces are being thrown overboard in favour of government guidance.

Making a transition to a modern market economy while addressing internal pressures from economic restructuring, battling economic recession abroad and satisfying its commitments to external authorities such as the WTO will be daunting.

Mounting internal pressures

Chinese leaders vow to live up to WTO commitments. ''Following entry to the WTO, China will stand by its word and see actions through to the end. Keeping one's word is one of China's fundamental moral concepts,'' said China's chief trade negotiator LongYongtu this week.

Yet a worsening global economy and mounting internal pressures might test the depth of China's commitment. China has suffered less economic turbulence compared to its regional neighbours but declining exports and bulging inventory levels all point to an increasingly bleak picture.

For the eight months to August, Chinese exports worldwide rose 7.3 percent, a dip from a 34.6 percent increase during the same period last year. The Sept 11 terror attacks, and the US retaliatory strikes on Afghanistan, could deal a blow to China's expectations of a flood of inward investment following its accession to the WTO.

Trade and foreign investment account for over 40 percent of China's gross domestic product, so a significant decline in both sectors next year could jeopardize the country's rapid economic growth and undermine Beijing's ability to cope with the swelling unemployment from the restructured state firms.

If past experience is taken as a guide, Beijing tends to slow the pace of its most painful reforms whenever economic growth falters and global recession looms.

The most recent reform programme started in 1997 and laid out ambitious goals for divesting state ownership and restructuring through mergers. A year later, the Asian financial crisis hobbled most of the restructuring effort.

In 1998, the government's immediate response to the recession abroad was to stop privatisation and increase government interference in the economy. What is happening in the economy now is being compared to the aftermath of the Asian financial crisis.

Centralised social security fund

Last month, the central government announced its decision to scrap the planned disposal of state shares on the state markets, only three months after the scheme was introduced. Ten percent of the proceeds from selling state shares were to become a funding vehicle for centralised social security fund China still lacks.

Unwinding a 50-year legacy of corporate welfare, Beijing is trying to make state companies responsible for profits and losses but not for ''cradle-to-grave'' support of their workers.

However, without a national network to support unemployed and retired workers, many state enterprises would have to slow the pace of worker layoffs, hurting efforts to make them purely commercial entities.

Some experts defend government's decision to ride on markets' rescue by halting the sale of state shares. ''Shock therapy is not suitable for China's stock markets,'' argues Zhang Liqun, research fellow at the State Council Research and Development Center.

''The transfer of ownership is one of the most crucial issues of China's economic restructuring," Zhang says. ''It is not possible that you proceed with all the other reforms gradually yet you demand that market reform is done rapidly.''

Other experts, however, see the policy shift as a major setback in China's economic reform. ''It is a bad sign. This would have helped reduce the role of the central government in the economy,'' said Shawn Xu, head of the research at China International Capital Corporation Ltd.

Bankruptcy

What clouds China's economic outlook further is Beijing's order to provincial courts not to take on bankruptcy cases worth over 50 million yuan (US$6 million).

Over the past few years, bankruptcies were seen as an extreme but necessary tool in reducing excess production capacity. Although Chinese reformers have embraced the need of bankruptcy law, they have proceeded cautiously, fearing social unrest.

Now, with a virtual freeze on any significant bankruptcies, the task of transforming China's 300,000 overstaffed state firms into modern companies that can compete in international markets appears even more formidable. All of this is made even more significant because of China's entry into the WTO.

In theory, WTO rules will help China make its state sector more efficient and force it to introduce more transparency and less bureaucratic intervention. However, it remains to be seen how Beijing adheres to its international commitments when domestic considerations of preserving social stability weigh so heavily.