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Last updated at: (Beijing Time) Thursday, December 19, 2002

Strengthening Economic-Trade Cooperation, Promoting Common Development

Following is a year-end report titled "Strengthening Economic-Trade Cooperation, Promoting Common Development", written by People's Daily correspondents Zhang Liang and Li Wenyun, reviewing China's foreign economic and trade situation in 2002.


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Comrade Jiang Zemin, in his report to the 16th CPC National Congress, clearly set this goal of struggle: In the first 20 years of this century, China is to realize the establishment of a well-off society in an all-round manner and quadruple the 2000 gross domestic product (GDP) by the year 2020.

The foreign economic and trade sector, as an important component of the national economy, should make contribution to the realization of this objective, and take quadrupling GDP as its goal of struggle. Calculated in accordance with this goal, China's import and export volume should have approached US$2 trillion by 2020.

This is both a magnificent and arduous target. It is magnificent because this trade volume is equivalent to the current trading scale of the largest trading country in world, the average annual growth rate of China's imports and exports is set to reach more than 7.2 percent in the next two decades; it is arduous because the foreign economic and trade sector not only is subjected to the influence of the domestic economic situation, but also to the influence and restriction by the international economic situation, particularly the development and change of economic globalization.

This both offers very great opportunity for development and contains fairly big changeable factors and challenges. We should give play to our own advantages, work hard and strive to realize this goal. At the same time, we should strengthen economic and trade cooperation with various countries around the world, particularly with other developing countries, and promote common development.

I. China's Development Is Opportunity, Not Threat, to Other Countries
During the 13 years since the Fourth Plenary Session of the Party's 13th Central Committee, China has persisted in its basic national policy of opening to the outside world, constantly strengthened its economic and trade cooperation with various countries and regions around the world, actively participated in the process of economic globalization and has won a period for quickest and best development in history in its foreign economic and trade sector.

In 2001, the total volume of China's imports and exports hit US$509.8 billion, and the ranking of its foreign trade in the world had jumped from 15th in 1989 to sixth in 2001. In the Jan-Oct period of this year, in particular, under the circumstance wherein the world economic and trade sector was in the doldrums, the gross volume of China's imports and exports reached US$500.2 billion, up 19.7 percent year-on-year, the import and export volume is expected to exceed US$600 billion this year, and its ranking in world trade is possibly to rise from the sixth to the fifth place.

The rapid development of China's economy will provide other countries, particularly surrounding countries and regions with opportunity, market and space for development. It is predicted that in the next five years China's import volume will reach a total of US$1.5 trillion to 2 trillion. In the first 10 months of this year, China's imports from the EASEAN countries rose 27 percent over last year. The faster is China's development, the greater space will be for the development of surrounding countries. Along with the implementation of China's "going out" strategy, in particular, there will be more powerful and qualified enterprises which will increase their overseas investment, neighboring countries will be one of their first-choice regions.

With the existence of economic globalization today, no country can avert competition, but it can adopt measures to turn competition into cooperation. For instance, the free trade zone to be set up by China and the ASEAN in the coming 10 years is a very good method of cooperation, a mutually beneficial, two-way and open form and of common development, therefore, China's development is an opportunity, not threat, to other countries.

II. China Comprehensively Fulfilled Commitments in 1st Year after Its WTO Entry
China's successful accession to the WTO on December 11, 2001 marked the entry of China's opening up into a new stage. As representative of a big, responsible country, the Chinese government has comprehensively fulfilled its commitments in a conscientious and responsible attitude over the past year.

In the barter trade field, China has drastically slashed import tariffs and has abolished various non-tariff measures; in the sphere of service trade, the Chinese government has, in compliance with its promises, promulgated a host of new laws and regulations on the entry of foreign capital in some service trade departments and has taken numerous practical actions in regard to opening the market of the service industry; in the trade-related intellectual property sphere, China's legislation on the protection of intellectual property rights is in full compliance with the requirements of the WTO; in the area of investment, China has completed the revisions of its basic laws and detailed rules for implementation concerning direct foreign investment, and it has amended and published the new "Industrial Catalogue Guiding Foreign Investment".

To carry out commitments, Chinese government departments have sorted out around 2,300 laws and statutes related to the foreign economic and trade sector. Central and local governments are losing no time in reforming the administrative examination and approval system and speeding up transformation of government functions. The huge amount of work China has done in honoring its promises has been universally affirmed by WTO members.

WTO entry over the past year has exerted and is exerting active influence on China's economic development. China has constantly pushed forward its opening to the outside world and has achieved fresh progress in construction of the legal system and in transformation of government functions, export and attraction of foreign capital have grown rapidly, and reform and development have been promoted in agriculture, service trade, automobile and other industries.

Of course, the influence exerted by WTO entry on China's economic development is a long-term process, it is still necessary for us to properly tackle the problem for a long time of period to come. It can be believed that with the basic experiences gained in reform and opening up over the past two decades and with the continued enhancement of overall national strength, WTO entry will definitely play a still greater role in promoting China's economic development.

III.Taking New Measures to Further Attract Foreign Capital
In recent years, under the circumstance wherein the total volume of international investment has kept decreasing, China's actual use of foreign funds stays at US$40 billion each year, in the first 10 months of this year, actual use of foreign capital reached US$46.4 billion, up 19.65 year-on- year, actual absorption of foreign funds will possibly exceed US$50 billion this year.

In a period of time ahead, China's attraction of foreign capital will meet new opportunities for development. China possesses a stable political-economic environment, a good investment climate, a most vigorous market environment and rich labor resources-all these have greatly enhanced foreign investors' confidence in investing in China.

In the future, we should, acting upon the requirements set by the CPC 16th National Congress for "persisting in combining 'bringing in' and 'going out', for actively participating in international economic and technological cooperation and competition and for constantly raising the level of opening to the outside world", seize opportunities to continue to improve the quality and level of the absorption of foreign capital and render better service to the need for the development of China's national economy.

We should gradually push forward the opening of the service field, utilize mid- and long-term foreign investment through a variety of forms, combine the use of foreign capital with domestic economic structural adjustment and the reform of State-owned enterprises and encourage transnational companies to invest in agriculture, manufacturing industry and high and new technological industries;

we should also actively create a sound legal environment, stabilize the transparent policy environment and maintain the stability and continuity of the policy toward foreign investment, at the same time, we will also grant national treatment to foreign investors, so that China will increasingly become a country with the greatest attraction to foreign investment.

IV. China Adhered to Its Principled Stand in Doha Trade Negotiation
Whether a new round of multilateral trade talks can be accomplished before the scheduled year 2005 concerns the reputation of the multilateral trade system and the confidence in the world economy. WTO members, particularly developed members, should adopt practical measures as soon as possible and make their contributions to promoting the "Doha development agenda".

Authoritative source points out explicitly that in the new round of talks, China will stick to its principled stance:

Firstly, the aim of new multilateral trade talks should be conducive to the establishment of a fair, just and reasonable new international economic order, to the development of the world economy and to the facilitation of trade investment and to an interested balance between the developed and developing members.

Secondly, the new round of negotiation must take into full account the status quo of development and need of the developing members and the least developed members, and grant them special treatment in terms of the degree and speed of opening; it is essential to adopt practical and effective measures to guarantee the implementation of the Uruguay round accord; it is necessary to guarantee the full and effective participation of the developing members, guarantee realization of an overall balance achieved by the negotiation result on the basis of embodying the interests of various parties, particularly promoting the economic development of the developing members.

Thirdly, the new round negotiation is very extensive in scope, developing members and the least developed members lack understanding of and experience in many items on the agenda, the developed members who have benefited most from economic globalization are obligated to provide developing members with necessary assistance in the aspects of technical support and capability-building. Only by doing so is it possible for the new round negotiation to promote economic globalization, so that developing and developed members can share the fruits of economic globalization. China will strengthen links with all WTO members, including other developing members, so as to jointly push the process of the new round negotiation.

V. Continuing to Give Play to Advantages, Striving for Best Results
The world economy has experienced a slow growth this year. According to the forecast of the IMF (International Monetary Fund), the US economic growth rate this year will not reach the 2.8 percent as estimated in the early year, it is estimated to be only around 2.2 percent, and will only reach 2.3 percent next year; the US "9.11" incident occurred last year, in particular, increased uncertain factors affecting the development of the world economy.

In spite of this, the world economy has still witnessed a slow growth this year, the situation of market demands is also better than anticipated. With regard to the development of the world economy next year, there are currently many views in the economic theoretical circles, the optimistic view holds that a fairly big growth trend will appear; the pessimistic view maintains that economic growth will not necessarily appear, and a decline may even emerge.

We should fully understand there still exist many uncertain factors and hidden troubles in regard to the development of the world economy, and there still exists the possibility of a downturn, so the situation brooks no optimism.

In the meantime, however, we should notice that a slow growth of the world economy will likely appear. Under such circumstances, China's import and export trade, dominated by labor-intensive products, has very strong competitiveness and unique advantages, given this, there is still development space for China's foreign trade next year. we should, within the limited development space, strive for the best results by continuing to give play to China's strong points.

By People's Daily Online


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