Roundup: MOFTEC Spokeswoman on Hot Issues

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Last updated at: (Beijing Time) Wednesday, July 31, 2002

Roundup: MOFTEC Spokeswoman on Hot Issues

The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) held its midyear news conference Tuesday in Beiijng. Spokeswoman Gao Yan replied questions on issues including China's foreign trade, foreign investment policy, China's WTO commitments, Sino-Japan vegetable trade snag and etc.

DISCUSSION

CHINESE

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Foreign trade maintains stable growth

China's foreign trade maintained stable growth in the first half of this year, with exports and foreign direct investment (FDI) better than expected, and the growth of Chinese exports was better than expected and imports increased to some extent.

The total value of China's imports and exports hit 270.71 billion US dollars, up 12.3 percent year-on-year. Exports reached 142.06 billion dollars, up 14.1 percent and imports 128.65 billion dollars, up 10.4 percent.

China's exports rose 6.8 percent in the same period of last year.

FDI grew both in scale and quality in the first half of 2002, Gao said. FDI in contractual volume hit 43.99 billion dollars, up 31.5 percent. The volume of actual FDI added up to 24.58 billion dollars, up 18.7 percent.

Meanwhile, the industrial value-added product of foreign-funded enterprises reached 364.1 billion yuan (44 billion US dollars), up 12.2 percent, and accounting for 25.2 percent of China's total.

Foreign-involved tax revenues, mainly consisting of taxes from foreign-funded enterprises, contributed 19.9 percent of the national tax revenues and hit 167.61 billion yuan (20.25 billion US dollars) in the first half.

Chinese enterprises also efficiently conducted the "Go global" strategy. Excluding financial institutes, 6,758 Chinese-funded enterprises had been established abroad by the end of June, 2002.

The total contracted investment of those Chinese-funded enterprises was 13.2 billion US dollars, of which, 8.88 billion dollars were from Chinese enterprises.

Cautious about export growth

China's exports could be affected by many uncertain factors in the latter half of the year.

China would focus on exploring new markets such as Russia, India, Latin America and the Middle East to secure a steady growth of exports in the second half.

Many international organizations remained cautious in their forecasts of the world economy despite signs of improvement in the US and Japanese economies.

The rise of protectionism had a significant impact on the development of global trade and economy.

The World Trade Organization (WTO) predicts that the volume of global trade will grow by just one percent this year. The United Nations said the total volume of transnational investment which slumped by 41.5 percent last year is unlikely to have significant improvement.

In response to these negative factors, China would diversify its export markets, products, operators and methods of trade.

China also had problems in expanding trade, including discrepancies in trade growth of different areas, lack of cash flow for export companies, lagging reform in state-owned foreign trade companies and weakened competitiveness of conventional export goods.

China would step up the production of labor-intensive goods, especially specialized farm produce oriented to overseas markets. At the same time, it would expand the exports of new and high-tech products and high value-added products.

China would encourage private and foreign-funded companies to expand exports, and further tap the potential of state-owned enterprises in export.

While continuing to expand exports, China would also try new marketing means, including international procurement, e-commerce, overseas processing and assembly.

Foreign investment policy coherent and stable

China will keep its foreign investment policy coherent and stable, while upgrading investment quality, said the spokeswoman.

Since the beginning of 2002, China's foreign trade and investment had developed in a stable way, with a more satisfying growth of foreign investment than expected.

In the first half-year, contracted foreign investment totaled 43.99 billion US dollars, up 31.5 percent over the same period of 2001, while foreign investment in use grew 18.7 percent to 24.58 billion US dollars, she said.

China would continue to reform administrative approval systems,push forward administration by law, promote government efficiency and create a healthy business environment to attract more foreign investment.

MOFTEC would endeavor to optimize foreign investment structure,making investment serve the Chinese economic restructure, enhance competitiveness and help China's western development strategy.

WTO commitments, rights equally

China will continue to put equal emphasis on its World Trade Organization (WTO) commitments and rights after its accession to the body.

China has been dealing with all work relating to WTO entry for half a year, said Gao at a press conference on China's foreign trade and investment.

As a responsible country, China will abide by WTO rules and usethem to safeguard its rights and interests, she said.

China will put equal stress on opening up its markets and reasonably protecting them, as well as on opening up and safeguarding national economic security.

Since the end of 2001, China has strictly implemented its WTO obligations, cutting tariff levels and reducing the number of imports which require quota license from 33 kinds to 12, she said.

China has promulgated new laws to further open its service trades, and the State Council has rectified or relinquished over 2,300 provisions relating to foreign trade and investment so as to meet WTO standards, she said.

Meanwhile, China has actively utilized WTO rights to safeguard its own interests, she said, pointing to China's full participation in the new round of WTO negotiations, handling economic and trade disputes on the basis of WTO rules, and the fight against international trade protectionism, she said.

Generally speaking, WTO membership has influenced the Chinese economy in a positive way in the first half year, such as increasing confidence of investors, acceleration of domestic industrial restructuring, progress in legal system, the growth of exports and foreign investment, and limiting the impacts on some sensitive sectors including agriculture.

Opening up service trades

China has made marked progress in opening up its service trades, said Gao.

With membership of the World Trade Organization, China had promulgated new laws and provisions on the approval of foreign investment in important service sectors such as law, telecommunications, finance, insurance, ocean shipping, video product sales, stocks and tourism, she said at a press conference on foreign trade and investment.

During the law-making process, the government had invited opinion from all sides, including WTO members and their enterprises, she added.

A gazette, to be published by MOFTEC, about the WTO, its members, enterprises and individuals would include all the Chineselaws and provisions concerning cargo trade, service trade, trade-related intellectual property rights and foreign currency management.

China had opened up the insurance sector in Beijing and Tianjinahead of schedule, she said. Meanwhile, 14 joint-venture medical organizations, 12 agencies of law offices, one joint-venture travel agency and 10 foreign-funded distribution enterprises had been approved, she added.

Facts showed the Chinese government's attitude and ability in implementing its WTO commitments were unassailable, and China was willing to exchange views with other WTO members over its obligations, she said.

China welcomed constructive suggestions and opinions, but strongly opposed and rejected irresponsible and groundless accusations, she added.

China prepares submission to steel case panel

China is preparing a submission toa World Trade Organization panel considering the protectionist measures taken by the US government on steel imports earlier this year.

The panel, comprising three experts from Iceland, India and Singapore, was appointed by WTO director-general on July 25.

The panel would be responsible for dispute examinations on the basis of the timetable set by the parties and the rules of the dispute settlement mechanism.

Through the mechanism, China would make full use of its rights to safeguard the legal interests of Chinese enterprises and industries, ministry spokeswoman Gao Yan.

Armed with facts and detailed legal grounds, China would make clear the US measures on steel products amounted to protectionism,which conflicted with WTO rules and the trade liberalization goal raised in the trade minister declaration of the WTO's Doha meeting.

"China has asked the panel to make relevant suggestions and findings," she said.

China's request for a panel on the steel dispute was its first use of the mechanism for a bilateral trade dispute solution since its WTO entry, she said, noting this was an important right of WTOmembership.

Vegetable trade snag

China and Japan are preparing for negotiation on technical issues concerning Chinese vegetable exports to Japan, according to the spokeswoman.

Gao slashed some Japanese media reports which claimed that Chinese vegetables sold to Japan had serious safety problems.

"These reports are biased and not objective. They misled Japanese consumers and damaged the reputation of Chinese vegetables. It is unfavorable for the normal vegetable trade between the two countries."

China always attaches great importance to food quality and safety and has taken a series of measures to ensure that all products, including export commodities, meet quality and safety requirements, Gao said.

The technical measures on trade issues taken by some countries have far exceeded the limits needed to ensure product quality and safeguard consumers' health, she said.

As for the technical standards Japan has adopted, Gao said, there are some contents that are not scientific or rational enough,and this is the root of the so-called quality problem with Chinesevegetable exports to Japan.

China hopes Japan would clarify the biased reports and appropriately solve the issue so as to create a good environment for bilateral trade, Gao said.

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