Achievements in Foreign Trade and Economic Sector

China's foreign trade and economic sector withstood the severe test of the Asian financial crisis and maintained the momentum of constant growth during the Ninth Five-year Plan (1996-2000) period, said the minister of foreign trade and economic cooperation.

During the Ninth Five-year Plan period, the value of import and export increased 1.68 times from US$280.8 billion in 1995 to US$474.3 billion in 2000, averaging an annual growth of 11 percent and meeting the objective of increasing total trade volume to US$400 billion set in the Ninth Five-Year Plan.

He said, China's ranking in world trade was moved from 11th in 1995 to 9th in 1999 and is likely to be up further in 2000.

According to the minister, from 1996 to 2000, China used 213. 48 billion US dollars of foreign investment, 87 percent more than that during the Eighth Five-year Plan period (1991-1995). Average annual foreign direct investment (FDI) was above US$40 billion and China has been the largest FDI recipient among developing countries since 1993, Shi said.

In the Ninth Five-year Plan period, China further deepened the reform of its foreign trade and economic system and noticeably accelerated the pace of its opening-up, Shi said. China introduced a registration system, under which state-owned large and medium- sized manufacturing enterprises, commercial enterprises and scientific and research institutes were granted trading rights after registration with competent authorities.

State-owned trading enterprises were reorganized and restructured, which marked a new step toward the establishment of a modern enterprise system, the minister said.

Controls over the import and export right of private production enterprises were also lifted, which is of historic significance, he said, adding at present, 32,000 Chinese enterprises of various natures (excluding enterprises with foreign investment) enjoy import and export right.

Shi said, China continued to make several substantial tariff cuts and brought the average tariff level down to the present 15.3 percent, 57 percent lower than that at the end of the Eighth Five- year Plan period.

Meanwhile, the quota and license system was also reformed and China further relaxed restrictions on the areas open to foreign investment, including commerce, banking, insurance, tourism and other service sectors, the minister noted.

During the past five years, he continued, China's foreign trade and economic sector further improved its quality, level and economic efficiency; China's import and export mix was optimized with the proportion of electromechanical and high-tech products increasing to 42.3 percent and 14.8 percent in 2000.

In the past five-year period, foreign investment accounted for 12.7 percent of the total investment in fixed assets and the industrial added value originated from foreign-funded enterprises made up 20.9 percent of the national total, he said.

At present, there are nearly 180,000 foreign-funded enterprises in operation, creating nearly 20 million jobs, he said.

China has made major progress in overseas investment and economic cooperation, and the constant development of foreign trade and economic relations has played a positive role in developing the national economy, adjusting the industrial structure and improving the quality of economic performance, Shi said.

During the years when the Ninth Five-year Plan was being implemented, he noted, China actively participated in bilateral and multilateral economic and trade collaboration, creating a stale international environment for the national economic growth.

The country has also made major progress in negotiating the resumption of China's contracting party status in the GATT and accession to the WTO, which had been going on for 15 years.

At present, the multilateral negotiation is at its final stage and the day when China becomes a WTO member is not far off, the minister stressed.

He said, through efforts made in the Ninth Five-year Plan period, China's all-around opening up pattern has taken shape and an open economy is developing rapidly.

Economy to Further Open up

Shi said that China will further open its economy and strive to achieve a sustainable foreign economic and trade development.

By 2005, the country's total annual imports and exports should reach 680 billion US dollars, while imports and exports should strike a general balance, the minister said. The respective shares of electrical-electronic products/machinery and hi-tech products in total exports should rise to 50 percent and 20 percent, he noted.

In the coming five years, average annual FDI inflow to China should be maintained at around 40 billion US dollars and efforts should be made to achieve further growth, the official said.

According to the new five-year plan, China will make greater achievements in overseas project-contracting, labor service cooperation, foreign aid and other foreign trade and economic activities, Shi said.

The minister announced that China will push ahead with two fundamental transformations in the foreign trade and economic sector, so as to make the country more competitive in the international market.

In the next five years, China will implement the strategies of "Winning by Quality, Market Diversification and Reinvigorating Trade by Science and Technology" in a better way, the official said.

At the same time, the country will transform the growth mode of foreign trade and economic cooperation, make unremitting efforts to restructure the foreign trade and economic sector, further optimize the import and export product mix, mode of trade and regional and market structures, increase the added value of processing trade, and basically realize a fundamental transformation in China's foreign economic and trade development, namely from expansion and quantitative growth to growth based on quality and economic efficiency, Shi said.

He pointed out that in the coming five years, China will speed up the establishment of a new administration system for the country's foreign trade and economic cooperation with the accession to the WTO as the turning point.

During the transitional period after joining the WTO, China will set up a new foreign economic and trade system compatible with international norms and conditions in China, he said.

Referring to the government strategy of "Go Global", Shi said, local companies will be encouraged to invest abroad in fields where China has comparative advantages, so that the country can participate in international competition and cooperation in greater depth and magnitude.

The "Go Global" strategy will enable China to make more effective use of both domestic and international markets and resources to better serve its ongoing modernization drive, the official said.

Furthermore, China will basically set up a foreign economic and trade promotion and safeguard system, he said, noting that the export refund mechanism will be reformed to make it more stable and institutionalized.

Meanwhile, it is imperative to improve the system of financial support for foreign trade and economic cooperation, focusing on export credit and insurance thereof, and to integrate export credit insurance with export financing, he said.

A well-established legal system governing China's economic interaction with the rest of the world should be basically put in place, reflecting compliance with the WTO rules and China's own circumstances, he added.

In the coming five years, China will push forward the development of e-commerce, the minister said. By substantiating and improving Project of Golden Customs and establishing a sound on-line foreign trade and economic administrative system, China will primarily realize network-based administration, operation and information-sharing in the foreign trade and economic sector, so that important progress can be made in e-commerce, e-information and e-administration, according to the official.

Shi went on to note that China will actively participate in regional economic cooperation while discussing and studying the possibility of trade and investment liberalization and facilitation in a certain region.

Foreign Trade Likely to Slow Down in 2001

The growth of China's foreign trade is like to slow down in 2001 due slowing global economic growth and the high base figures over the past two years, said the Chinese foreign trade minister.

According to the official, China's imports and exports reached 69.91 billion US dollars in the first two months, up 16 percent over the same period of last year, with exports being 36.14 billion US dollars, up 14.5 percent year-on-year, and imports being 33.77 billion US dollars, rising by a comparable 17.7 percent.

During the same period, China's contractual foreign investment amounted to 9.202 billion US dollars and the amount of foreign capital actually used reached 4.576 billion US dollars, 47.09 percent and 24.15 percent higher than in the corresponding period of last year.

No Discrimination Against US Farm Goods

China has not taken any discriminative measures against the import of agricultural products from the United States, Minister of Foreign Trade and Economic Cooperation Shi Guangsheng said.

China earnestly abides by the rules of the Sino-U.S. Agreement on Agricultural Cooperation and fulfills its commitments, and China has been carrying out import-export commodities inspection and quarantine examination of U.S. agricultural products such as wheat, citrus fruit and tobacco strictly in accordance with the Sino-U.S. agreement, Shi said.

In response to a question about foreign countries adopting anti- dumping measures against China, Shi said that the Chinese government has always been opposed to Chinese enterprises dumping their products overseas. However, he expressed the hope that other countries would strictly abide by relevant regulations of the World Trade Organization as they take anti-dumping actions against China.

Noting that China has a relatively low cost of labor and low prices for raw materials, which makes Chinese products very competitive in the global market, he said the export of such products is quite different from dumping.

Stance on WTO Accession Unchanged

China's long-expected accession to the World Trade Organization (WTO) is nearing completion, but it is up to member economies instead of China alone to decide on the exact timetable Shi said.

It depends, especially, on the political will of major developed countries, Shi said. He reiterated that "China's persistent stance and efforts to join the WTO remain unchanged," adding that "China has all along been working hard to join the organization at the earliest possible date."

Shi made the remarks at a press conference held here by the ongoing session of the National People's Congress.

All the member economies and their business circles are looking forward to China's entry into the WTO in order to enjoy the benefits promised by China, and China has basically completed all bilateral negotiations with other member economies, and signed agreements, he said.

Shi said that there are still several issues unsolved, such as the implementation of agreements on agriculture and industrial subsidies and market accession to certain service trades.

"The difficulties in resolving these problems mainly come from some member economies that have asked for so high a price that it has gone beyond the reach of China as a developing country," he said.

"Demands that have not been satisfied in bilateral talks cannot be met in multilateral talks, either," Shi told the press conference.

(People’s Daily 03/13/2001)