Since the latter half of last year, China's foreign trade enjoyed a substantial recovery. In January and February this year, exports rose by more than 40% over the same period last year.

     With a favorable global economy, China's active fiscal policy, and further reform of state-owned enterprises, Minister of Foreign Trade and Economic Cooperation Shi Guangsheng is quite optimistic about achieving this year's goal of over 3% growth in exports. To support the government's strategy of developing the vast western region, Shi Guangsheng promises MOFTEC will endeavour to encourage the inflow of direct investment there.

     Shi Guangsheng says a catalogue will be formulated to guide capital inflow into industries and projects in which western China has advantages. Foreign-invested enterprises located in western China will enjoy three years of preferential taxes, after which they will pay business income tax at the reduced rate of 15%.

     MOFTEC's preferential policies also include permitting foreign-invested enterprises in east China to go to the western regions to act as contractors for the operation of both purely Chinese enterprises and foreign-invested enterprises. When the eastern region is allowed to go ahead with certain kinds of experimental investment, the central and western parts of the country will be allowed to do likewise.

     When asked whether the US congress' possible decision not to grant China permanent normal trade relations status would affect China's entering the WTO, Minister Shi Guangsheng explained that China's accession to the WTO will be decided at a multilateral level, while PNTR is an issue affecting the implementation of Sino-US bilateral arrangements.

     Shi Guangsheng says reciprocal MFN is made mandatory by the WTO principle of non-discrimination. The bilateral agreement between China and the US on China's accession to the WTO signed last November was the result of hard efforts made by both sides. It will create benefits for both nations.

     To thoroughly resolve the issue of PNTR for China without attaching any conditions is the base and prerequisite for implementation of the Sino-US bilateral agreement.

     If the US misses this opportunity, it will lose the tremendous market of China, which will go to its competitors. In that case, the US, especially US enterprises, will suffer the most.

     Minister Shi Guangsheng points out that China's ongoing bilateral negotiations on WTO entry have entered their final stage.

     Shi Guangsheng says only 37 of the 135 members of WTO have requested bilateral negotiations on China's entry. So far, 27 have concluded and signed bilateral agreements with China. Most of the 10 remaining members have concluded negotiations and are waiting for the signing.

     EU Commissioner Pascal Lamy will come to Beijing later this month. Minister Shi Guangsheng expresses confidence that China and the European Union will be able to find solutions acceptable to both sides, and bring negotiations to a conclusion.

     The minister also says after China joins the WTO, it will earnestly observe WTO rules and seriously fulfil its commitment to the outside world. It will adjust and amend its existing laws and policies that are inconsistent with WTO rules. He adds that China will not only take full advantage of WTO rules to ensure its economic security, but also play a constructive role in the formation of a new world economic and trade order.