China had been aiming to join the WTO, which regulates world trade, in time for the next round of trade talks which begin in Seattle in November.

But the world's tenth largest trading nation cut off negotiations with the US after the bombing of the Chinese embassy on May 7.

Now an article in a Chinese newspaper says that "there has been no change in China's resolve to join" the WTO, and "there recently seems to be a thaw in China-US relations."

The Financial Daily says that there is now "hope for restarting the talks."

Among the recent positive factors in Sino-American relations have been the US decision to extend Normal Trade Relations with China, its role in restraining Taiwan, and the cordial messages after the China-US women's soccer final in Los Angeles.

APEC meeting crucial

Zhu failed to close the trade deal in April

The negotiations are set to resume at the sidelines of the APEC meeting in Auckland on September 11 and 12, which will be attended both by US President Clinton and Chinese President Jiang Zemin.

"I think that there is a real desire on both sides to make this a success," U.S. Assistant Secretary of State for East Asian and Pacific Affairs Stanley Roth said in Canberra.

"Obviously we hope that this meeting can be the occasion for significant progress on WTO - the ideal outcome to reach an agreement at that time or before, but at a minimum to use the meeting to get the negotiations restarted on an urgent basis."

Before that meeting, US trade officials will travel to Beijing for "technical negotiations" on entry.

The United States would like China to speed up the timetable for foreign banks and insurance companies to compete in China, allowing them to open regional branches and buy and sell foreign currency.

In the past, China has argued that as a developing country, it should be allowed to delay full liberalisation for many years - an argument the US has rejected.

China and the United States narrowly missed reaching an agreement in April when Prime Minister Zhu Rongji visited Washington. At that time China made some significant concessions on opening up its service sector.

Both sides are now concerned that there is no backsliding from that deal.

Li Zhaoxing, China's ambassador to the United States, said last week that Washington should not raise the threshold for China's entry to the WTO.

Tight timetable

The United States is also concerned that China may withdraw some of proposals made in April.

Those proposals triggered fierce opposition within China, and seemed to have weakened the position of Prime Minister Zhu Rongji.

China is now engaged in battle over how to modernise its economy, and maintain its growth rate in the face of fierce world competition for its exports.

Recently, the government has ordered restrictions on new investment in a range of consumer goods in order to raise prices - measures which would be incompatible with WTO membership.

There is now not much time to reach a deal before the world trade talks open.