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Monday, January 31, 2000, updated at 10:15(GMT+8)
Business Wu on China's Economic Prospects in 21st Century

China will stick to its reform and opening-up policy and participate actively in international economic cooperation and exchanges in accordance with the trend towards globalization, said Chinese Vice Premier Wu Bangguo Davos Saturday.

Addressing a special session on China at the 30th annual meeting of the World Economic Forum (WEF), Wu told the audience that guided by Deng Xiaoping's theory over the past two decades, China has carried out reform and opening up and successfully embarked on the road of building socialism with Chinese characteristics.

As a result, he said, the social productive forces have rapidly expanded, China's overall national strength has grown markedly and the Chinese people have enjoyed a much better life. From 1979 to 1998, China's GDP was up by 490 percent in real terms with an annual average growth rate of 9.7 percent.

"What China has achieved has not only laid a solid foundation for the future development in the country, but also contributed to the peace and stability in Asia and the world at large," he said.

On China's current economic situation, Wu said that the Chinese economy has maintained a sound momentum for growth in spite of impact of the 1997 Asian financial crisis and the 1998 devastating floods. Its GDP increased by 7.8 percent in 1998 and 7.1 percent in 1999.

"The reason why China has been able to maintain a good momentum of economic growth in an adverse economic environment is that it has, under the leadership of President Jiang Zemin, adopted timely measures to respond to the circumstances and gone ahead with reform and opening-up," he stressed.

Right now, the exchange rate of RMB has remained stable with a foreign exchange reserve of over 150 billion US dollars, Wu said, adding that both rural and urban residents in China are leading a much better life.

Talking about China's development strategy in the new century, the Chinese vice premier said that China adopted a three-step development strategy at the initiative of Deng Xiaoping in the early 1980s.

The strategic target set for the first step is to double the GNP of 1980 by the year 1990 and to meet the people's basic needs for food and clothing and for the second step, to double the 1990 figure by the end of the 20th century and ensure the people a morecomfortable life.

The goals set for these two steps have been achieved ahead of schedule, Wu said. Now, China has set about accomplishing the goalfor the third step, that is, to raise the per capita GDP up to thelevel of moderately developed countries, to achieve modernization by and large and to build China into a strong, prosperous, democratic and culturally advanced socialist country by the middleof this century.

"As the third step, during the first decade of this century, we will try to double the year 2000 GDP and achieve an annual average growth rate of 7 percent," he said.

Wu briefed the leaders in politics and business present at the session of China's strategic priorities:

-- To conduct strategic economic restructuring. China will promote industrial optimization and upgrading by relying on scientific and technological progress and technical innovations inorder to make our industries responsive to the demand on the domestic and international markets;

-- To continue the construction of infrastructure. China will intensify efforts to harness major rivers and lakes, build a largenumber of large and medium-sized economically and socially viable water conservancy projects, develop clean and renewable energy, build new urban and rural power grids and upgrade old ones. China will also improve the transportation and telecommunications facilities, including express ways, high-speed railways and communications trunk ways, fiber optical trunk ways in particular as well as the construction of urban infrastructure with priority given to subway and rail transportation facilities;

-- To develop rural industries and small cities and towns. The main objective in this aspect is to step up the development and upgrading of rural industries and commerce on the basis of processing farm and sideline products;

-- To implement the strategy of vigorously developing the western part of China, or developing the west strategy. As early as in the 1980s, Deng Xiaoping explicitly put forward a proposal of strategic importance, that is the two-front development strategy of overall importance to China's economic modernization.

"Reform and opening-up is a long-term and basic state policy ofChina," Wu pointed out. "We will unswervingly deepen the reform and open China wider to the outside world. The objective of the Chinese economic reform is to establish a socialist market economic system. The key link in this reform is the reform of state-owned enterprises aimed at establishing a modern enterprise system."

"To conform with the trend towards economic globalization, we will take a more active part in international economic cooperationand exchanges, further improve the all-directional, multi-layered and wide-ranging opening-up pattern and make a better use of both domestic and international markets and resources so as to promote the development of the national economy," he said.

Wu said that China will not be able to develop in isolation of the world and the world also needs China for its prosperity. In the next 10 years, China will continue its large-scale modernization drive. It is expected that its fixed asset investment will grow by over 10 percent annually and its total import in the coming decade will exceed 2,000 billion dollars, making China the fastest growing "block" and one of the markets that have the greatest potential.

On China's accession to the World Trade Organization (WTO), Wu said that China will not only enjoy its rights, but also fulfill its obligations after joining the WTO.

"We will expand our opening-up program at a quicker pace in energy, transportation, communications and other infrastructure areas, gradually provide more opportunities for foreign investment in the banking, insurance, tourism, retail business, foreign trade,legal consulting and other sectors, improve the system of laws and regulations on foreign investment and offer better services to foreign-invested enterprises," he said.

To conclude his statement, Wu said that China will surely offer broad prospects for trade and economic cooperation between China and the rest of the world with economic growth and progress in reform and opening-up.

"China will present huge business opportunities not only to the Chinese entrepreneurs but also to those foreign business people who have vision, courage and will to make investment and set up factories in China," Wu said. "We sincerely hope that business people from other countries will seize the opportunity and come to China for investment and business to our mutual benefit." (Xinhua)

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