Chinese premier expounds on situation of Chinese market

Chinese Premier Wen Jiabao on Tuesday in Helsinki expounded on the situation of the Chinese market at a business summit.

In a speech entitled "Enhance Cooperation to Make Win-win Progress" at the 2006 China-Europe business summit, Wen said that China's economy had grown at an average annual rate of 9.6 percent over the past 28 years of reform and opening-up.

China's gross domestic product (GDP) reached 2.23 trillion U.S. dollars last year, ranking fourth in the world, said Wen.

He added that the Chinese economy had continued to maintain a fast yet steady rate of growth in the first half of this year, with GDP increasing by 10.9 percent year-on-year.

"This has led to the rapid expansion of China's trade, both internal and international, and brought about fundamental changes in the size and structure of China's market," the Chinese premier said.

China's foreign trade amounted to 1.42 trillion U.S. dollars last year, making China the third largest trading nation in the world, Wen said.

"China's market is thriving and has tremendous potential for growth," he added.

Since its entry into the World Trade Organization (WTO), China had honored its commitments, said Wen.

China has increased its market openness, putting down all non-tariff measures and lowering tariffs on industrial goods to 9.9 percent.

"Given processing trade, China's average tariff level is now below 5 percent, even lower than that of some developed countries, " Wen said.

The fields of general service, trade, tourism, telecommunications, transportation, accounting, auditing and legal services are now open to foreign investment, and the banking sector will also be fully open by the end of this year.

Wen said that in central and western China, the Chinese government had relaxed restrictions on the proportion of foreign equity and the access of foreign investment to some sectors.

"As a matter of fact, some sectors have been opened even earlier than required by China's WTO commitment. Of the 160-plus service sectors covered by the WTO, China has opened over 100, close to the level of developed countries," he said.

The Chinese premier said China's market had huge potential for growth, and that his country aimed to sustain that economic growth by continuing to follow the long-term strategy of the stimulation of domestic demand.

China has a population of 1.3 billion, and the rise in income of the urban and rural populations, as well as the change in patterns of consumption have generated a huge market demand.

Housing, automobiles, electronic communication products, tourism and education were increasingly becoming priorities for urban and rural consumers, Wen said.

Estimates show that by 2010, China's demand for automobiles will exceed 9 million and the number of mobile phone users will surpass 600 million.

China's market has enhanced "win-win cooperation", and China has become both a major exporter and a major importer.

"By carrying out trade and economic cooperation with other countries, China has obtained capital, technologies and management expertise to meet its own needs and facilitated economic restructuring. Foreign investors, on their part, have also gained big profits from such cooperation," Wen said.

Between 1990 and 2005, foreign companies in China remitted over 280 billion U.S. dollars of profits back home.

By entering the Chinese market, EU companies had secured a favorable strategic position in global competition, said Wen.

China is now the biggest market for Airbus in Asia and the biggest market for Nokia mobile phones in the world.

Last year, the sales revenue of Philips China and Siemens China accounted for 10 percent and 7 percent of their respective global sales.

The Chinese premier said China's market environment was being steadily improved.

China has conducted a general review and check of all foreign-related laws and regulations in keeping with China's WTO commitments.

The new Foreign Trade Law of the People's Republic of China has been in force for two years and laws governing foreign investment have been brought into compliance with WTO rules.

At present, the prices of over 90 percent of commodities were fully determined by the market, Wen said.

He added that as China's economy had increasingly become market-oriented, markets for the full range of production factors had taken shape, market intermediary organizations had grown, and market competition had developed in a more orderly way.

"All this has provided a level playing field for both Chinese and foreign companies," he said.

China's sustained economic growth and its growing market have both brought benefits to the Chinese people and created tremendous business opportunities for the international business community.

"The development of China is, therefore, an opportunity for, and a contribution to the world. It is not a challenge, still less a threat," he said.

The 2006 China-Europe business summit, with the participation of some 500 senior business leaders from around the world, was held here on Tuesday to discuss strategies for boosting China-EU economic and technological cooperation.

Source: Xinhua