Analysis: The Rise of China -- a Threat or an Opportunity?

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Last updated at: (Beijing Time) Sunday, December 22, 2002

Analysis: The Rise of China -- a Threat or an Opportunity?

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Beijing's successful bid to host the 2008 Olympic games is widely regarded as recognition by the international community of the success of China's reform and opening up policies of the past two decades, while Shanghai's successful bid to host the 2010 World Expo is more a reflection of the world's expectations with regard to China's encouraging economic prospect.

To world leaders and business giants, China is considered more as an opportunity than a threat, and is an ideal place for the rest of the world to showcase their products and expand their markets, according to government officials and academicians.

The once-notorious idea of "the China threat" is giving way to a new concept -- "the China opportunity".

"Engine" of World Economic Recovery?

The "China opportunity" theory is based on the fact that China's economic growth helps accelerate the recovery of the world economy, said Hu Angang, a Chinese economist.

In July 2002, China launched a 140 billion yuan (17 billion US dollar) natural gas pipeline project to transport gas from Xinjiang Uygur Autonomous Region to Shanghai. The largest joint venture with foreign enterprises in Chinese history now involves partners from the Royal Dutch & Shell Group, Exxon Mobil Corp. and Russia's gas monopoly, Gazprom.

For the planing and construction of the 2008 Olympic venues, Beijing has promised to invite public bidding from across the world and has even adopted legislation to ensure a smooth bidding process.

China's other massive project, which include diverting water from the Yangtze River to North China, developing its vast western regions and building a number of airports, railways and highways, are also interesting opportunities from the perspective of overseas enterprises, said Hu.

China's neighbors appear to be benefiting from its economic development due to their geographic proximity.

In October 2002, Australia was awarded a 30-year deal on a Liquefied Natural Gas (LNG) project in Guangdong Province worth billions of US dollars. The gas project's economic outlook has since improved considerably. Immediately thereafter, Indonesia secured a 25-year agreement on the sale of 2.6 million tons of LNDper year to Fujian Province.

Experts predict that the country's combined imports in the next five years will reach 150 billion to 200 billion US dollars. In fact, members of the Association of Southeast Asian Nations (ASEAN) saw a 27 percent increase in exports to China in the first 10 months of this year.

China has become the fastest-growing source of international tourists. Statistics show that, during the first three quarters of this year, Chinese citizens registered 12 million overseas trips, up 40 percent year-on-year.

To the delight of many tourist destination countries, Chinese are spending more than Japanese tourists. An average Chinese tourist in Australia currently spends 2,300 US dollars, more than the average Japanese, while in Thailand, Indonesia and the Philippines, Chinese tourists are welcomed as the "pillar" of their respective tourist industries, and as the "engine of their economic recoveries".

Neil Andrew, speaker of the House of Representatives of the Australian Federal Parliament, told his counterpart, Li Peng, during the latter's visit to Australia in September, that everyday there is a jumbo jet full of Chinese people landing at the Sydney Airport, so that there is no reason for Australia not to welcome an ever more prosperous China.

Among the passengers aboard these planes are not only heavy-spending sight-seeing tourists, but also Chinese students. Every year, about 250,000 Chinese students go abroad to study. In Britain, where annual living expenditures are as high as 150,000 yuan, the number of Chinese students who traveled there to study in 2002 rose 70 percent compared with the figure for 2001.

While improving its internal business environment to attract foreign investors, China is also encouraging its business people to go abroad. To date, more than 6,800 Chinese enterprises have established branch companies overseas. Analysts say that the steady growth of the Chinese economy will lure further overseas investment.

According to Hu Angang, calculations based on the 2002 World Bank Database indicate that during the period from 1980 to 2000, when China recorded fourfold economic growth, its contribution to world economic growth ranked second behind the United States. Its contribution to the growth of global trade and services ranked third behind the United States and Japan.

In view of the progress of the past 20 years, the Chinese people apparently have higher expectations for the next twenty. The recently-concluded 16th National Congress of the Communist Party of China (CPC) set a goal of quadrupling the 2000 GDP figure by the year 2020.

This 20 year period has been described by Chinese President Jiang Zemin as "a period of important strategic opportunities, which China must seize and which offers bright prospects." It can therefore be predicted that the powerful Chinese engine will continue to accelerate and inject more energy into the world economy in the next 20 years, said Hu.

"To some extent, the two decades also represent an important strategic opportunity to the rest of the world," he said.

A Trustworthy country with mature Leadership

The subdued cries of "the China threat," says Chinese Foreign Minister Tang Jiaxuan, are ultimately the result of the country's performance on the world stage over the past several years.

"The world has come to see that China is an important, mature, trustworthy and responsible country," he said in an interview.

While visiting war-torn Afghanistan earlier this year, Tang said that he was greeted with thumbs-up and smiles from people on the street. He later learned that they were expressing their gratitude for China's generous assistance in the immediate post-war period. They were especially grateful for two cargo planes full of emergency aid which arrived shortly after a severe earthquake, Tang was told. "The Chinese mean what they say," an Afghan official said.

As a matter of fact, China's "mean-what-they-say" style has long been acknowledged by its neighbors, especially following the Asian Economic Crisis in 1997, Tang said.

During the crisis, the Chinese government maintained the value of its currency despite strong pressure from slumping exports and sweeping competitive devaluations in the rest of the region. The strong yuan proved to be a tangible source of stability in the regional and the world economy.

While many leaders of these crisis-stricken countries are still praising China for its courage and for other assistance during the crisis, Chinese leaders emphasize that, in addition to consideration of China's overall national interests, its decision to maintain the stability of the yuan was made based on the cultural tradition "never hit others when they are down."

During the past years, China has shown itself to be an important, mature and trustworthy country by properly handling a series of international crises, including the nuclear crisis in South Asia and the terrorist attack against the United States on September 11 of last year.

China has also built stronger relations with neighboring countries and is actively involved in multilateral activities within the framework of the United Nations. Its proposal for a newsecurity concept based on mutual trust, mutual benefit, equality and cooperation won high praise from the international community.

Over the past year, China has fulfilled its commitments to the World Trade Organization (WTO), and all the major members of the organization say they are pleased with the "overall performance of China" thus far.

"China is no threat because it's trustworthy and mature," Tang said.

"China Opportunity" Concept Increasingly Popular

The cries of "the China threat" have long been manipulated by anti-China elements to contain the growth of the most populous country. The assumption that China will pursue military expansion when it becomes strong has been negated by many scholars because it contradicts China's history and the goodwill it has shown to the world throughout the years.

Although some detractors still remain, there number is declining.

In November, China and the 10 ASEAN countries signed a framework agreement on comprehensive economic cooperation and on a code of conduct for the South China Sea. By cooperating with China,the ASEAN leaders have shown that they are ready to share the prosperity of their giant neighbor, observers say.

In Japan, the concept of "the China opportunities" has won more and more support. Politicians and business leaders seem to be rather optimistic about the rise of China. Prime Minister Koizumi Junichiro has been saying that the growth of China constitutes both an opportunity and a challenge to Japan, and Japan must seize the opportunity for common development with China.

In Singapore, Prime Minister Goh Chok Tong has said that China's growth will have a positive impact on Singapore and on the region at large, saying "China offers immense opportunities provided we restructure our economy and encourage entrepreneurship to take advantage of them."

The international business community has already shown its support for the "the China opportunity" concept by continuing to invest in the country.

Among the top 500 companies across the globe, 400 have engaged themselves with China. A survey by "Fortune" magazine of the United States says that 92 percent of multinational corporations are considering establishing branch offices in China in the near future.

Estimates show that, in view of the fact that about 50 billion US dollars of foreign direct investment is utilized this year, China will probably rank first in attracting foreign investment for the year 2002.

The concept of China opportunity was coined by Chinese Premier Zhu Rongji in April 1999, during a speech given in Washington D.C.He called on the American people to transform their thinking from "China threat" to "China opportunity." His speech was a big success.

Three years later, the "China opportunity" concept is increasingly acknowledged and accepted throughout the world.

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