In two interviews with foreign reporters including one from Reuters, Premier Wen Jiabao expressed China's resolution in pushing forward its reform on the investment and currency system in a steady and prudential way to avoid any big ups and downs in economy.

Premier Wen believes that measures taken by the government to curb the overheat in fixed investment will "take effect in a period of time". In fact, the State Council has launched a nationwide examination on various investment projects. A huge steel project in Jiangsu Province was stopped and people involved in this case, including some government officials were punished due to violation of laws and regulations. Investment projects of steel, aluminum, cement, golf course examined across China

He reiterated China's policy on keeping the RMB exchange rates basically stable at a balanced, reasonable level and exploring a market-based exchange rates mechanism.

China's trade surplus and inflationary concerns are putting RMB under great pressure of revaluation. Some foreign countries, especially US, have been pressing China to appreciate its currency and free its exchange rates. Premier Wen warned that a liberated RMB exchange rates system could be very risky without a healthy, robust banking system. China and US are communicating on this issue.

China has made some policy amendments to avoid speculative behaviors on yuan appreciation, including lowering the ceiling of foreign currencies converted into yuan. The central bank, PBOC, have repeated again and again that China would keep RMB "basically stable".

The Premier also expressed confidence on China-EU trade. He expects the bilateral trade will reach 200 billion USD before 2013. He will set off a trip to Europe on May 2.

He assured the interviewer of China's progress on protecting intellectual property rights. Before the World's Day of Intellectual Property Rights on April 26, China launched a campaign to improve the awareness of intellectual property rights protection among the public. China's Supreme People's Procuratorate will also take actions. China to intensify crackdown on fake goods production, intellectual property rights infringement

Premier Wen also mentioned China's removal of some trade barriers and tariff reduction to honor its WTO commitment. China will cancel its auto quota next year. "It is not an easy thing", he said.

Addressing the problems of NPA and overheating

A meeting of the Political Bureau of CPC presided by General Secretary Hu Jintao called for attention to problems in China's economic situation. Debates on risks of a hard landing of Chinese economy were quite hot before the 16th Session of NPC this year. After that, the Chinese government has repeatedly warned against overheating investment in some sectors like steel, cement and aluminum. It aims to make the economy driven by consumption, instead of investment. But some sectors and local governments did not listen to the warnings. For example, the steel sector shows no signs of cooling down. Production capability will outrun a lot the consumption. When answering a question at Boao Asia Forum, Vice Governor of the People's Bank of China Wu Xiaoling asked departments concerned to take self-initiated control measures or the central bank would take measures "that no one wish to see". CPC warns against overheating fixed assets investment

The Asian Development 2004 by Asian Development Bank predicts China would slow down its expansion in 2004 and 2005 while the momentum of growth will keep. The report said China's investment would increase by 16 percent annually and GDP by 8-plus percent. Trade surplus will decline. China has taken various measures to cool down the overheat in some sectors. But the report does not predict much rise for China's consumption. This may mean China has yet to make further efforts to boost the consumption to make the economy consumption-driven.

The report highlights five problems China has to address to secure a sustainable development in the future: the fragile financial system, reform on SOEs and fostering the capital market, fiscal policy, unemployment and poverty, and environment for the private sector.ADB forecasts China's investment growth to decrease by half in 2004,2005

The Asian Development Bank will make a 45 million USD equity investment to help China's banking sector settle non-performing loans. It expects to raise 450 million USD. In China, the four assets management companies designed to deal with the NPAs of the big four state-owned commercial banks released the figures about the NPAs recovered or written off by the end of March. The Chinese central bank has taken measures to tighten bank loans. But credit grant still exceeded what was expected this year so far. Fund backs banking systemAMCs fight to bring down non-performing assets

Catalysts of cooperation and disputes settlement

China, Japan and ROK are seeking the way to closer economic cooperation. China welcomes the two Asian neighbor to participate into the revival of its old industrial base in the northeast. Japan stresses information sharing through a virtual silk road which links the three countries together. The Second Sino-ROK Economic Seminar was held in Beijing on April 27 in Seoul. Industrial, economic and financial cooperation are high on the agenda. It is co-hosted by People's Daily and the Chosun IIbo. Chinese Premier Wen Jiabao and his South Korean counterpart sent messages of congratulations to the event. Second Sino-ROK Economic Seminar opens in SeoulChina, Japan, ROK to build electronic silk road: official

Not only a virtual one. There is a concrete-and-brick network. The Asian Highway Network will finally come into reality in 2010 after it was proposed in 1959. It will link 23 Asian countries, either they are mainland or island countries. Twenty-three Asian countries sign Asian highway agreement

Both sides agree that their economies are complementary to each other. Both sides have seen the surge of their bilateral trade. And both sides hope to further explore the potential of cooperation. So why not a free trade? China and Australia will work out the feasibility study for the free trade agreement ahead of schedule. China expressed its hope for an early recognition of China's market economy status by Australia. But Australia said it would consider this after the feasibility study was made. China-Australia ministerial economic commission meeting held in Beijing

This time the US government would like to choose talks instead of punitive measures to settle trade issues with China. The US labor organization and manufacturers thought high tariff taxes would be a good idea to press China to improve living and production conditions for its workers and get American products more competitive. The Chinese government welcomes the stance of the Bush administration. US rejects launching fair-trade case against China

China and Vietnam signed Agreement on Fishery Cooperation in Beibu in 2000 which takes effect before June 30 this year. On April 29, the two countries settled a protocol on this agreement to specify relevant issues. There is controversy over the water area between China and Vietnam. Protocol on China-Vietnam agreement on fishery cooperation in Beibu Bay signed

Hong Kong

The Hong Kong Monetary Authority (HKMA) is optimistic about Hong Kong's banking sector this year. It sees business possibilities to be brought by Closer Economic Partnership Arrangement (CEPA). The manufacturing industry in Hong Kong is also benefiting from CEPA. Factories there are planning recruitment expansions. Foreign investors may also find it good to set up plants there. But some insiders are cautious about the rosy picture of the industry. They think manufacturing is in decline overall and it takes time before "tangible gains" can be reaped. HKMA predicts more business opportunities for banksCEPA offers HK factories opportunities

Ace Hardware, the largest US hardware company with 80 years history, located its first international buying office in Hong Kong. It will serve the international market. Largest US hardware company opens int'l buying office in HK

Joining hands across the strait for life

Shanghai based China Eastern Air Holding and Taiwan based Cathay Life Insurance will create China's first cross-straits life insurance joint venture in Shanghai. They have half by half interests in the new company. First cross-straits life insurance JV approved

Overseas investment and investment overseas

Energy is the field which represents great potential for Sino-Russian cooperation. Although an oil pipeline from Russia is still pending amid the competition between China and Japan, China will increase its imports of oil and gas from Russia. 20 billion cubic meters of natural gas will be delivered from the Kovykta field in Russia's Irkutsk Province to China through a pipeline by the end of 2008. Sinopec and China National Petroleum Corp(CNPC) have also signed contracts to buy more oil from Russia. Russia to sell more oil to China

With the close watch on the development of China's SARS cases, Singapore will still launch its tourism promotion campaign in China. The port country will give easier access for Chinese tourists. Singapore is willing to have more economic exchanges with China and looking forward to begin free trade talks with China. Singapore to continue tourism promotion plan in China

Developing the rural economy and improving farmers' income are on the top of the task list of China's economic strategy. Actually China's rural areas are not as far from the international market as you may have thought. The International Cooperation Alliance is a good bridge. Vice-premier urges int'l cooperation on developing rural economy

By People's Daily Online