The country's top priority has become domestic stability, not membership to the WTO or radical economic reform. Chinese negotiators are acutely aware that too many concessions could spark a political backlash at home. Although China's membership in the WTO will boost exports and attract more inward foreign investments, such benefits are largely long term. In the short run, China will experience more pain than gain by further opening its markets. Chinese negotiators will refuse any terms of WTO entry that might upset China's tenuous political consensus, spark a protectionist backlash, or jeopardize domestic stability.
American negotiators are also in no position to back off.
They too face a complex political environment that limits their room for maneuver. Having realized its mistake, the administration is eager to bring China back to the negotiating table and clinch a deal. The administration fears that a trade deal with China might alienate core Democratic support bases, such as labor unions and environmentalists, at a time when the party wants to mobilize electoral support for next year's presidential race. US negotiators want to avoid giving the impression that they are caving into Chinese demands. Not only is the negotiating process difficult, it is also on an extremely tight timetable.