Foreign direct investment to China reached US$46.8 billion last year, hitting an all time high.

However, he said this year will be an extremely difficult year for the growth of foreign trade, as many uncertainties remain despite signals beginning to bud in major developed nations for a possible global economic recovery.

Shi made these remarks yesterday in Beijing on the sidelines of the ongoing Fifth Session of the Ninth National People's Congress.

He warned that China will retain its rights for further action if the United States neglects China's solemn position and continues its trade protectionism policy against Chinese steel manufacturers.

"We think this is an action of trade protectionism which violates WTO rules," said Shi, referring to the recent announcement made by US President George W. Bush to impose an additional tariff on steel imports from other countries.

Shi said sanctions against steel exporters from other countries will not only undermine steel trade between these countries and the United States but also would bring no solution to the struggling US steel sector.

"The current difficulties in the US steel sector is not a result of increasing steel imports but rather a restructuring of the domestic steel sector in the US," said Shi.

More seriously, Shi warned that the move could increase heavy burdens on US consumers and reduce the competitive power of US-made products.

"We will follow closely the latest developments in this issue, and China retains its right to take further action, including launching a formal complaint with the WTO," Shi said.

China is one of the biggest victims of global anti-dumping investigations, with 485 anti-dumping cases brought against Chinese enterprises in recent years.

"Chinese companies should nurture a strong sense of self-protection," Shi added.

China is to remain one of the most attractive destinations for foreign direct investment this year, despite the country's foreign trade experiencing one of the most tough periods in recent years.

However, confidence is high, as Shi claims investors see China as the safest place for foreign investment, and a market with large growth potential, a sound legal framework, established infrastructure facilities and a better cultural environment.

Shi reiterated that China will play an active and constructive role in launching a new round of WTO talks.

The Doha Ministerial Meeting for Trade Ministers reached an agreement in November to launch the new round.

Developed and developing nations will participate in the talks on an equal footing and enjoy equal rights, and the new round of negotiations should be beneficial to the growth of global trade and economic co-operations, and the launch of a fair, new international trade order, Shi said.

"The result should take into consideration balancing the rights and obligations between developing and developed nations, especially paying attention to the concerns of extremely poor nations," Shi said.

To foster closer trade ties between the mainland, the Hong Kong Special Administrative Region (HKSAR) and Taiwan, Shi said talks to establish a type of free trade zone between the mainland and the Hong Kong SAR - an initiative promoted by its Chief Executive Tung Chee-hwa late last year - are currently running smoothly between the two sides on two main topics - trade and investment facilitation, and tariff and non-tariff measures concerning trading goods.

"But there is no final timetable yet," Shi said.

"And a consensus was built up that the easier issues will be tackled before the hard ones, and we will carry out the agreements once they are reached.

"The consecutive accession to the WTO has brought new opportunities to boost trade ties following the Chinese mainland and the separate tariff territory of Chinese Taipei's WTO accession."

"(However) the most pressing need is to realize direct and mutual "three-links" across the Straits under the one-China principle, without which we could not talk about the development of free trade areas."

(China Daily March 13, 2002)