Commentary: It Is Prosperity, Not 'Collapse'

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Last updated at: (Beijing Time) Tuesday, July 23, 2002

Commentary: It Is Prosperity, Not 'Collapse'

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For quite a while, a tiny handful of men of letters in Western countries have written books and set up theories, questioning China's economic prosperity.

Certain Western mainstream media have also followed suit in making a fanfare, alleging that China's statistical figures are exaggerated, its GDP growth rate is virtual height, China's prosperity is "false prosperity" and its investment environment is not as good as imagined. Particularly after China's WTO entry, it was just like opening the "pandora box", which is bound to trigger a structural collapse.

In the face of these absurdities that ignore China's development and progress, not only the Chinese will not accept them, many foreigners who know China's actual conditions will also find it hard to keep silence.

The more than two decades of reform and opening up program has brought tremendous changes to China, a fact evident to all people throughout the world. As to whether China's economic boom is true or false, ordinary Chinese people have the strongest feeling about that; and whether China's investment environment is good or bad, the hundreds of thousands of overseas investors have the greatest say about that; as to where China will go, the Chinese are the masters of their own destiny.

Over the past 20 years and more, China's sustained and rapid economic development has surpassed the anticipation of many foreign economists. By the year 2000, China's GDP reached more than 8.94 trillion yuan, exceeding US$1 trillion for the first time, a 5-fold increase over the end of the 1970s.

In accordance with the rankings arranged by the World Bank, China's economic aggregate in 2001 was placed sixth behind the United States, Japan, Germany, Britain and France. Along with the dramatic increase of economic aggregate, China's ability of effective supply rose enormously, with the output of its important products, such as coal, steel, cement, chemical fertilizers, household electrical appliances and program-controlled switchboard as well as food-grain, cotton, edible oil, meat and egg all ranking first in the world. The 20-odd years of reform and opening up efforts have enabled China to bid farewell to the "shortage economy" and move toward prosperity.

The most immediate beneficiaries of the reform and opening up policy are the common run of Chinese people. Statistics show that in the past 20-odd years, the number of China's absolute poverty-stricken people have reduced from 250 million to 34 million. People's living standards have undergone remarkable improvement, they have thus begun to enjoy material prosperity.

Twenty years ago, supermarkets just emerged in China, at present, they have scattered across big and mid-sized cities of China; in the past China was plagued by extreme scarcity of commodities, many consumer goods had to be supplied against coupon and in limited amounts, but now the question of getting adequate food and clothing has long before become an obsolete topic of conversation, what the Chinese talk about most is the quality of life.

Many foreigners who have visited China, without exception, highly praise China's progress and prosperity: "The Chinese have gained achievements in only 20 years which would take many other countries two centuries to accomplish", this is a fact nobody can deny. Just as the World Bank President Jonnes Wolfensohn has said: China has created a miracle of world attention.

As a new-rising vast market, China is attracting huge amounts of investment from various parts of the world which is rising from year to year. The "2001 World Investment Report" of the UN Trade Development Conference revealed that in 2000, China attracted foreign investment worth US$41 billion, ranking first among the developing countries for eight consecutive years, which was increasing at a 15 percent annual rate, the figure hit US$47 billion in 2001.

At present, the number of countries and regions investing in China has exceeded 180, nearly 400 of the world top 500 transnational companies have established working bodies and set up joint ventures or solely owned enterprises in China. The research of an American consultative agency shows that China has become the country of first choice for investors, second only to the United States.

China is a large market with a population of over 1.2 billion, which is pregnant with lots of new business opportunities, these, plus its abundant and cheap human resources, have irresistible appeal to foreign companies.

However, this does not mean that all foreign-funded enterprises in China will gain successes. Investment of any kind involves risks, this is the truth known to each investor. In China, there are naturally foreign investors unsuccessful in their businesses, but the overwhelming majority of foreign-funded enterprises in China have gained tremendous successes.

The survey conducted by US weekly, Fortune, indicates that the number of profit-making foreign companies in China is four times that of loss-making companies, among the senior administrators of foreign-funded enterprises, 94.6 percent say that the Chinese market is very important to them; The result of a recent survey jointly conducted by a British accountants firm and a magazine among 680 companies, which have invested or are planning to invest in China, shows that 90 percent of Asia-Pacific regional companies, over 70 percent of American companies and 80 percent of European companies are planning to expand their businesses and investments in China. "China is the largest market in the world, which cannot be neglected," said these companies.

China's reform and opening up represents a process of China's merging itself into the world, as well as a process of catching up with the developed Western countries. China has scored great achievements, but this is only the first step in its "new Long March" of national construction, China still has a very long way to go.

As one looks back on the history of world economic development, one can clearly see that the development of each country and region has to undergo a long course, it took the United States 100 years' time to catch up with Britain, and Japan more than 130 years to catch up with the United States, and to this date it still fails to catch up completely.

"Economic development cannot be accomplished at one stroke, because this is a marathon game". In this process, so-call bubble, bad debts and bad accounts, credit and other problems are not the "special products" of a country. Since the end of the last century, Western capitalist countries have witnessed frequent crises and occasional recessions, even the United States with a highly developed market economy is plagued with constant financial and accounting scandals and precarious credit.

China is a large developing country, its per-capita resources share is in the downstream of the world, its development starting-point is very low. To carry out reform and opening up in such a country with a vast expanse of territory and a huge population, it is unavoidable for the emergence of problems of one kind or another.

China does not deny the existence of these problems, and it is adopting active measures to solve them, China also welcomes any well-intentioned criticisms and pertinent proposals, but it does not accept vicious exaggeration of the seriousness of problems by a tiny handful of people.

It is worth noting that after 15 years of negotiations, China had finally joined the WTO at the end of 2001. This is a strategic move of far-reaching significance, it indicates China's strong wishes to further its opening and merge itself into the world. Although the WTO has brought China grim challenges, it is, however, not "a trap full of fresh flowers", still less a catalyst causing China's economic collapse.

After it became a WTO member, China readjusted its policies in accordance with WTO rules and its national conditions, make them linked up with international practices and displayed its charms of lower tariffs, better investment environment and greater development space.

In the first half of this year, China's actual utilization of foreign capital grew over 18 percent, with the economic growth rate standing at 7.8 percent. The emergence of a new tidal wave of investing in China exactly shows that foreign businesspeople cast their eyes on the opportunities brought about by China's accession to the WTO. In his article, senior researcher Nicholas R. Lardy with the Brookings Institution maintains that China has adapted itself to the market competition after its WTO entry, it is impossible for crisis to break out in China.

From the perspective of history, whenever major changes took place in China's internal and external environment, there were invariably sensational predictions uttered by individual people. On the eve of the birth of New China, US State Secretary Acheson once foretold that since China had too large a population, not a single government could solve the problem of feeding the people, the people's government was no exception, but what about the result? China has been able to feed its people accounting for 22 percent of the world population with less than 10 percent of the world cultivated land, thus creating the miracle of providing adequate food and clothing by relying on its own efforts.

In the early 1990s, when the former Soviet Union was broken up, there were people who predicted that China would follow the Soviet Union's footsteps. Facts prove that to this date China still stands firm in the East of the world. Nowadays, there are again some people who prophesy that China is going to collapse, it is believed that the judgments passed on them by the Old Man of history will not be better than the previous ones.

It should be noted that the prosperity of China making up one-fifth of the world population is a tremendous contribution to world peace and development. The world needs a prosperous China.

However, in the world today, there are invariably a handful of people, who are hostile to China, do not want to see China's development and growth, wearing colored spectacles of ideology, they engage in fault-finding and confusing public opinion in an attempt to tarnish China's image and reputation, sag the confidence of foreign investors, thereby achieving their aim of disrupting China's economy and eventually undermining socialist China led by the Communist Party. But this is only their wishful thinking. After its entry into the WTO, China intensified its reform and opening up endeavor, China's development is irresistible.

The above commentary, written by senior commentator Gu Ping, is published on Page 3 of People's Daily on July 22.

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