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Home >> Opinion
UPDATED: 10:21, December 11, 2004
How to look at the breakthrough of trillion US Dollars in China's foreign trade?
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At the moment when China's entry into the WTO is almost up to three years we've witnessed a historic record in which the national total value of foreign trade has come to break through one trillion in the US dollars. With regard to this question, Chong Quan, spokesman of the Ministry of Commerce give the answers to the relevant questions by the reporter as follows:

Q. China has witnessed its total value of foreign trade to exceed one trillion by now. How do you look at the achievement? And what is the motive force behind it?

A. Up to the end of November the total value of China's imports and exports exceeded one trillion US dollars, and this marks that China's foreign trade has stepped onto a new stage. It's not easy for us to get the achievement and is the result won in China's policy of opening to the outside world, a result reaped through the efforts of generations of people. It is also the result gained by China's active participation in the economic globalization and a result for a common development and prosperity with countries and regions of the world.

Over the past 20 years and more since its opening to the outside world, China has taken a timely opportunity to carry out the strategy for mega-economic trade and rejuvenate the trade by science and technology in the pluralization of the market so as to win over the market by quality, and the development has undergone three phases. The first phase was in 1980s. By grasping the opportunity in which the labor-intensified industries such as light and textile were being transferred on a large scale in the world China made its efforts in developing the processing trade in this aspect. The accumulated value in a span of 10 years was added up to USD 711.5 billion, being 4.8 times that of the total obtained in the 28 years before China's opening to the outside world. The second phase was in 1990s in which, China, taking a firm hold of the opportunity in the readjustment of the world industrial structures promoted and developed energetically the export of mechanic-electro-machineries, witnessing an accumulated earning of USD 2429.5 billion in 10 years time. The export value of the newly added products from mechanic-electro-machineries made up 50 percent of the total, rising to the first category of all export commodities. The third phase began at the turn of the century. China, taking advantage of the opportunity of the transfer of information technology, pushed ahead an overall growth in import and export trade with hi-tech products and mechanic-electro-machineries to take the lead. The scope and scale of import and export trade has been doubled since China's entry into the WTO almost three years ago and thrice growth in the import and export of hi-tech products.

The speedy growth in China's foreign trade has benefited, except from the fast growth of national economy, revitalization of the world economy and the improvement of international environment, from the following main causes: the first is the deepening in the reform of the foreign trade system, pluralized entities in operation and the enhancement of enterprise-competitiveness and this has offered the foreign trade with new driving force. The second is the ceaseless optimization of the import and export product structure with the products of highly-added value and of hi-techs to become the new growth point in pushing forward the foreign trade. The third is to actively take over the transfer of the world industries by utilizing the incessant expansion of foreign investment, thus achieving a more obvious interactive effect of the investment and the trade. More than 60 percent of the increment in China's import and export are realized through foreign-invested enterprises and processing trades. The fourth is that the growth of domestic economy has expanded the need of importation in energy resources, raw materials and some key equipment and so on. The fifth is the display of the positive effect in the joining of the WTO in which China has further improved rectified step by step its ways in the development of foreign trade due to the unhealthy system in rules and regulations and laws of the past. In the meanwhile China has earnestly honored its commitments by opening wider to the outside world with its general tariff level to reduce from 15.3 percent in 2001 to 10.4 percent in 2004 and the gradual revocation of the non-tariff measures.

Q. What are the active roles played by the successive growth in foreign trade to the national economy and the development of the world trade?

A. The active role played by the successive growth of foreign trade is expressed mainly in the following: First is that it has pulled along the increase of economy. The foreign trade, investment and consumption the three joining together has become the major driving force to pull along the economic growth in China. The second is that it has helped promote the readjustment of structure, advancement in technology and the updating of industries. Last year witnessed the export of mechanic electro-machineries to take up over half of the goods exported with the hi-tech ones to occupy one fourth of the total products. The third is the creation of job-opportunities with the jobbers related to the foreign trade to come to 80 million in total. The fourth is the increment of financial revenue and foreign exchange reserve with the import tax income to account for 18.1 percent of the national taxation, a tax source next only to the domestic value-added tax. China's foreign exchange reserve exceeded USD 540 billion by the end of last October, thus having raised the capability in resisting the economic risk from without. The fifth is to make full use of the "two markets and two resources" in the service of the economic construction in China. The import of the energy resources, raw materials, advanced technologies and key equipment has come up to over 90 percent of the total import. The active role of foreign trade to the development of the Chinese economy will come to show further in the days to come.

The development of China's foreign trade has marked the mutual dual wins with other countries in the world. First of all, China has made its contribution to the increase of global trade. In 2003, China's import and export trade witnessed an increase of 37 percent, a contribution of 11.3 percent to the increase of the global goods trade, topping all others of the world. Secondly, the Chinese export has been developed in accordance with the needs of the world market, which has brought actual benefits to the consumers of all countries and regions. Thirdly, the Chinese import has played a role to pull the world economy along, which is becoming quite obvious day by day. From 1990 to 2004, the accumulated import in China has reached 2.8 trillion in the US dollars with an annual increase rate to outstrip over 10 percentage points than the world average. The year of 2003 saw China's import from the US increase by 24 percent and an increase of 39 percent from Japan and 51 percent from the Republic of Korea. We've also seen an increase of 38 percent from the European Union, and 52 percent from ASEAN countries. The "World Investment Report 2004" issued by the UN Trade and Development Conference holds, China has at present become one of the two engines for the growth of the world economy.

Q. China has become a large country in foreign trade now but can we say it has become a strong country in the trade?

A. In recent years China has been going up and up in the place of the world trade and it is likely for China to go up to the 3rd place in the world trade this year but we still can not say that China is a strong country in the world trade and there is an obvious gap between China and other strong trade countries. First of all the way in the trade increase is rough and unrefined with quality and efficiency to be further improved. Secondly China is not strong in the core competitive strength, lack of self-owned brands and distribution network and with only few products that have intellectual property rights and key technologies of their own. The 3rd is that the exported products are at a relatively low level with quite a few products listed at the lower end of the international division for value-chains and of no high added value. The 4th is that there hasn't so far come into being a batch of enterprises with a proficient management, comprehensive strength, which are able to take part in a deeper way in the international competition and cooperation. There is still a long way to go for China to become a strong country in the world trade.

Q. According to you what are the opportunities and challenges for China's foreign trade to face with? What are the measures to be taken to promote the changes in the increase of China's foreign trade so as to realize a sustainable development in foreign trade in future?

A. The initial score of years of the century has proved to be the strategic period of importance for the development of China. In regard of China's foreign trade this is also an opportune period for development. The foreign trade, as an important means and link to bridge up the Chinese economy and the world economy will for certain continue to achieve a new progress and development.

However, in the meantime China's foreign trade is still faced with challenges. These are mainly the uncertain factors in the development of the world economy, the hike of oil prices, the ceaseless regional clashes and terrorist activities, the increase of trade protectionism against China and the restriction still by developed countries on the transfer of high and new technologies to China. For foreign trade development China is facing an increasing pressure from resources and environment while the rough and unrefined way for the growth needs to be altered.

Article by People's Daily and translated by People's Daily Online

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