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Last updated at: (Beijing Time) Friday, October 25, 2002

'China to Replace US as the Engine for World Economy': Interview

Taking advantage of World Economic Forum Asian Department Director Dr. Richter's visit to China, our reporter recently conducted an exclusive interview with him on such hot issues as the prospect of China's economy, and the development trend of the world economy. Dr. Richter indicated that China is expected to become a new "engine" for world economic development within five years because it is one of the few bright points of the world economy.


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Taking advantage of World Economic Forum Asian Department Director Dr. Richter's visit to China, our reporter recently conducted an exclusive interview with him on such hot issues as the prospect of China's economy, and the development trend of the world economy. Dr. Richter indicated that China is expected to become a new "engine" for world economic development within five years because it is one of the few bright points of the world economy.

Reporter: The UN, the IMF and other organizations have, in their regular economic reports, lowered their anticipated world economic growth, the US-centered global economic recession tends to become increasingly serious, what's your view about this and when can the world economy get out of a slump?

Richter: The figures released recently by The United Nations Conference on Trade and Development (UNCTAD) show that Foreign Direct Investment (FDI) globe-wide dropped 50 percent compared with last year, this is a very pessimistic figure, among all regions including the United States, Europe and Japan, only investment made in China has witnessed growth, the world economy presents not an optimistic outlook, the globe will possibly enter a new recession which will last a longer time. There exist problems with some large transnational corporations of Europe and America, such as the famous American Ford and Italian Fiat, and some transnational corporations even face the danger of being closed.

The US economy once had all along been the engine for world economic development, but now it is faced with predicament and plagued by chaos, under such circumstances, who can replace the United States to become the engine for world economic development? Is it Europe, Japan or China? The situation in Europe does not make one feel optimistic either, although Japan presently remains the world's second largest economic entity, its banking system is faced with many difficult problems, if its banking system is properly rectified, it may give new hopes, but due to its domestic problems, it is impossible for Japan to replace the United States. Then, who, after all, can replace the United States? Only China! China's economic situation is very good, not only its domestic situation is favorable, but also more and more overseas investments are turned to China which is hopefully to take the place of the United States in five years to become the main motive force for global economic growth.

Reporter: What influence will the deteriorating external environment exert on China's economic development?

Richter: China will not suffer from negative influence, on the contrary, it will possibly get benefit therefrom. China is one of the bright points of the global economy, and it will attract more and more foreign investments. Of course, China also has competitive rivals, both India and Mexico are trying to attract foreign capital.

Reporter: Would you please give a forecast of the prospect for China's economic development, what favorable and unfavorable factors are therein, especially in the aftermath of China's WTO Entry?

Richter: The competitiveness of China's economy is growing in strength, not only State-owned enterprises, but private enterprises as well are witnessing ever-faster development, Chinese enterprises have taken an encouraging step toward globalization, such as Hairer, Legend and TCL, their products are rapidly entering European and American markets, these companies are developing step by step to become global transnational corporations. From a long-term point of view, joining the WTO is beneficial to China, perhaps many transnational companies may create some sort of impact and bring competition on Chinese enterprises, but this is beneficial to China, because only under competitive conditions, can Chinese enterprises experience rapid growth and China's markets become more mature and perfect. In the past, many domestic enterprises were only faced with domestic markets, but now they are confronted with large global markets. Many domestic enterprises have begun to buy up foreign enterprises, for instance, the Shanghai Auto Group participates in buying the share of the ROK's , Daewoo, Petro-China invested in Indonesia and bought the share of an Indonesian oil company.

Of course, China also faces problems that must not be neglected, such as the gap between the east and west economic development, unemployment and the problem relating to the ?��overheated?�� infrastructure construction in various localities.

Reporter: In the first half of this year, you stated in one article carried on the Singaporean Strait Times that the Group 8 (the United States, Japan, Germany, France, Italy, Britain, Canada and Russia) should accept China as one of its members. You enumerated in the article many reasons for this, in your opinion, what's the most important point?

Richter: Western countries should change their views about China, many European and American people know little about the situation in China, they should come more often to see for themselves. As to the most important reason, let me give an example. As a member of Group 8, Italy's total GDP amount is incomparable with that of China staying outside the Group, this is the most important index, if Group 8 wants to be representative in the world, it should not neglect the existence of China. Of course, involved here are not only economic factors, but also political factors. The importance of China's economic development has been recognized by more and more people, Western countries should treat China as an equal partner as soon as possible.

Reporter: There are some experts and scholars in the world who express doubts about the truth of China's economic statistics. What do you think about this issue?

Rocjter: I believe that the figures provided by official Chinese sources on economic growth are correct, the trends of China's economic growth are clear to all. Since China is a large country, the composition of various statistical data is very complicated, although we cannot avoid the existence of small errors, whether the growth is 7 percent or 8 percent is not important, small errors will not exert much influence, what is important is that China's economy is still growing steadily.

Reporter: It is said that you are writing a new book on China. Can you say something about this book, what kind of viewpoint are you to present to the readers?

Richter: In this book I will focus on the discussion of three possible scenarios for China's economic development: first, China to replace the United States to become the engine for world economic development; second, China will be plagued by a variety of problems such as stagflation of the Chinese economy and unemployment; third, a mixture of the above two kinds of situation. I think the first scenario is most likely to happen, that is, China will become the engine for world economic development.

By People's Daily Online


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