Seize Opportunity, Meet Challenge, and Participate in Economic Globalization

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Last updated at: (Beijing Time) Wednesday, December 19, 2001

Seize Opportunity, Meet Challenge, and Participate in Economic Globalization

China's entry into WTO marks a new stage in China's opening to the outside world; a vigorous, thriving APEC is of important significance to China's economic development; establishing a China-ASEAN free trade zone in 10 years is the result of the constant development of China-ASEAN relations and reflects the actual needs for the constant deepening of China-ASEAN economic ties and embodies the common wishes of both sides to strengthen economic and trade cooperation; next year, China will continue to try by every possible means to expand exports, vigorously absorb foreign capital and take a more active part in economic globalization.

Following is the full text of the interview by People's Daily correspondents Zhang Liang and Shi Xiaohui with Minister Shi Guangsheng of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC).

QUESTION: This year has seen great success in China's foreign economic and trade work. The event of most historic significance is China's formally becoming the 143rd member of the World Trade Organization (WTO) on December 11. Please say something about the important significance of China's entry into the WTO.

ANSWER: The relationship between the WTO and China is one of mutual needs. On the one hand, without China's participation, the WTO would be incomplete and even could not be called a world trade organization; on the other hand, joining the WTO is China's own necessity, the need for reform and opening up and the need for economic development. Just as General Secretary Jiang Zemin has pointed out, "Joining the WTO is a strategic decision made by the Chinese government under the situation of economic globalization, it is identical with China's objective of reform, opening up and establishing a socialist market economic structure". It marks a new stage in China's opening to the outside world.

Firstly, the WTO plays an important role in the world economy and trade, the trade volume among its members accounts for 95 percent of the world total. Entry into the WTO helps China create a good international economic and trade environment. The WTO has three basic functions: First, formulating, implementing and supervising multilateral trading rules; second, organizing multilateral trade talks; third, solving trade disputes among WTO members. Through obtaining WTO membership qualifications, accession to the WTO can help China enjoy the fruits of multilateral negotiation; through participating in the formulation of international rules, China can safeguard its own rights and interests; through opening its own markets, China can gain the opportunity to enter the markets of other countries; and can solve trading disputes through the mechanism for solving multilateral disputes.

Secondly, the WTO is an international organization based on rules, some of its basic principles, such as non-discrimination, transparency, fair competition and the opening of market, are all based on the market economy. Many specific rules have been set up through negotiation in accordance with these principles. Many of these general principles and specific rules are necessary for us to adopt or draw on in the process of establishing and perfecting a socialist market economic structure. Given this, accession to the WTO helps expedite the process of China's reform and opening up program and facilitate the establishment and perfection of China's socialist market economic structure.

Thirdly, entry into the WTO is required by China's participation in the process of economic globalization. One important objective of the world trade organization is to vigorously push forward the liberalization and facilitation of world trade and investment. Given this, the WTO will play a vital role irreplaceable by any other international economic organization in the development process of economic globalization. Joining the WTO will imply that China will participate in the process of economic globalization in a more dynamic and active posture. This will help us understand its trend, grasp its rule, pursue the good while avoiding the harm, speed up the realization of China's scientific and technological progress, economic restructuring and the upgrading of industries, and take an advantageous position in international competition in the new century.

QUESTION: In October this year, the Ninth APEC Leaders Informal Conference was held successfully in Shanghai. What stimulating role will this conference play in China's foreign economic and trading work?

ANSWER: The Asia-Pacific region is an important backing for China's foreign trade and economic cooperation, among China's 10 major trading partners, except for European Union (EU), all others are APEC members. In 2000, China's trade volume with APEC members hit US$344.5 billion, representing 72.6 percent of China's total trade volume; in the same period, the investment China actually absorbed from APEC members stood at US$30.05 billion, making up 73.8 percent of the total volume of foreign capital China used in the same period. Therefore, a vigorous, thriving APEC is of important significance to China's economic development. This year, China, as the host of APEC, on the basis of giving due consideration to the interests of various parties, pushed forward, in a comprehensive and balanced way, the liberalization and facilitation of APEC trade and investment and expedited the process of economic and technological cooperation and have achieved great success. This achievement has not only strengthened cooperation among APEC members, but has also crated a good cooperative space for China's foreign economic and trade work. This series of conferences has given a great impetus to the process of China's accession to the WTO.

QUESTION: At the Fifth ASEAN and China's Leaders Conference (10+1) held in November this year, leaders of both sides unanimously agreed on the establishment of a China-ASEAN free trade zone. What is the aim for the establishment of such a free trade zone?

ANSWER: The setting of this major goal of establishing a China-ASEAN free trade zone in 10 years is the result of the constant development of China-ASEAN relations, it reflects the actual needs for the constant deepening of China-ASEAN economic ties and embodies the common wishes of both sides to strengthen economic and trade cooperation. The China-ASEAN free trade zone will create an economic zone which will embrace 1.7 billion consumers, nearly US$2,000 billion worth of GDP and a trade total of US$1200 billion. Calculated in accordance with population, this will be the largest free trade zone in the world. From the perspective of economic scale, the China-ASEAN free trade zone will be the largest free trade zone formed among the developing countries.

The China-ASEAN free trade zone will be the first regional free trade arrangement made by China and other countries, it is an important move taken by China to strengthen its regional economic cooperation with neighboring countries while actively participating in the international multilateral trading system. It will not only further consolidate and strengthen the existing traditional friendly relations between China and the ASEAN countries and promote Asian peace and stability, but will also facilitate the respective economic development of China and the ASEAN and will help expand the scale of bilateral trade and economic cooperation, enhance the overall competitiveness of the economies of this region and jointly meet the challenges posed by economic globalization and regional economic integration.

QUESTION: This year has seen the notable slowdown of the world economic growth. What impact will it exert on the world trading market?

ANSWER: There has appeared an economic slump simultaneously in the three major economies of the United States, Japan and EU since the beginning of this year, and this situation has been aggravated by the "September 11" incident, the United States and Japan have sunk into an economic recession, the world economy has declined rapidly. According to the estimation made by the International Monetary Fund (IMF), EU economic growth this year is only 1.7 percent, Japan's economy has dropped by 0.9 percent, the economic growth of the United States is 1.1 percent; global economic growth is 2.4 percent, even lower than the 1998 level. Economic depression has brought negative influence on the world trading market, for instance, the volume of US imports witnessed a negative growth in the first three quarters of this year. It is estimated that international trade has increased only 2 percent this year, much lower than last year's level of 12 percent growth. Under such a circumstance, China's foreign economic and trade situation is very grim. Thanks to China's implementation of a correct macro-control policy, its national economy has witnessed a healthy and steady growth, vigorous efforts have been made to exploit the international market. In the first 11 months of this year, China's total volume of imports and exports still reached US$462.77 billion, a 7.4 percent increase over the same period last year, achieving a total trade surplus of US$20.37 billion, thus making contribution to bringing China's foreign exchange reserves to over US$200 billion. Meanwhile, this year has seen a fairly big increase in the absorption of foreign direct investment, between January and November, the country approved the establishment of 22,915 foreign-invested enterprises, with contractual foreign capital amounting to US$60.4 billion and the amount of paid-in foreign capital to US$41.9 billion, respective increases being 16.32 percent, 24.38 percent and 15.61 percent over the corresponding period last year. Foreign capital absorbed in the whole year is expected to reach US$45 billion, a fairly big growth compared with last year's US$40.7 billion. New progress has also been achieved this year in various other foreign economic and trade business. The business volume of contracted projects undertaken by China abroad and labor cooperation amounted to US$9.59 billion, a year-on-year increase of 7.9 percent. The total volume of newly signed contracts came to US$13.35 billion, a year-on-year increase of 7.3 percent. By the end of September, MOFTEC had approved the establishment of 6,513 Chinese-funded enterprises abroad, with the contractual volume of investment reaching US$11.8 billion, US$7.9 billion of which was Chinese investment.

QUESTION: Next year will mark the first anniversary of China's accession to the WTO, what new actions will China take in its foreign economic and trade work?

B>ANSWER: The Central Economic Working Conference held not long ago pointed to the need of taking accession to the WTO as an opportunity to open wider to the outside world. After joining the WTO, China's foreign economic and trade work will face a broader space of development. Next year, we will continue to try by every possible means to expand exports, deeply carry out the strategy of market diversification, winning success on the strength of quality and vitalizing trade by reliance on science and technology, we will push forward the facilitation of trade, strive to bring about export growth; give full play to China's advantage of economic development and social stability, vigorously absorb foreign capital, improve the quality of the utilization of foreign capital; we will take a more active part in economic globalization, actively yet steadily implement the strategy of "going out"; we will more actively promote cooperation between APEC, ASEAN and China (10+1), Shanghai Cooperation Organization (SCO) and other regional economic cooperation, thereby creating a more favorable external environment for China's opening to the outside world. After joining the WTO, we should act in accordance with WTO rules, do various fields of work related to WTO entry in a proper and comprehensive way. We should quicken our step to sort out and revise laws and regulations and finish the work of standardization and adjustment of various policies, come to firm grips with the training and bringing up a contingent of outward-looking talents who are well versed in international economy and law. We should deepen reform of the foreign economic and trading management system, reduce administrative examination and approval, carry out administration according to law and make government affairs known to the public.

I believe through efforts, we will certainly be able to properly use the favorable conditions offered by China's entry into the WTO and reduce the adverse effect to the minimum, so that our foreign economic and trade work will make still greater contribution to the development of the national economy.

By People's Daily Online

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