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 | Monday, May 01, 2000, updated at 10:42(GMT+8) | ||||||||||||
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Tariff Decrease not a Big ConcernThe industries in Shanghai can survive if China reduces its tariffs by a big margin to meet the requirements of the World Trade Organization (WTO), a local senior official has said."This is because many companies are already used to competitiveness thanks to foreign know-how," said Huang Qifan, director of the Shanghai Economic Commission. Over the past decade, many multinational companies have set up ventures in Shanghai to help upgrade local products. "At present, prices of some products have approached the world's level," Huang said. He believes that electronic and information industries, which have grown up with help from foreign investors, will not be affected by a drop in tariffs. Textile goods and home appliances will have great access to foreign markets due to their low costs. "But local automotive, chemical and pharmaceutical industries will meet challenges as foreign products swarm into the Chinese market," Huang predicted. He said locally produced sedans are more expensive than foreign ones and their prices will come under scrutiny as tariffs drop by a big margin in five years. "But local automakers feel somewhat relieved because they have co-operated with foreign partners for 15 years," Huang said. The director hoped they will adapt themselves to the world market as soon as possible. "If so, they will not be affected much by China's entry into the WTO," he said. The city is now developing a chemical industrial zone in Caojing on the Northern Hangzhou Bay by attracting funds from the world's chemical giants including DuPont, British Petroleum (BP), Bayer and BASF, which occupy an 80 per cent stake of the world market. BP plans to launch a 900,000-ton ethylene project in the zone that will cost more than US$2 billion. BASF, the German chemical giant, will spend about US$1 billion building plants to produce MDI and TDI, two key components used to produce plastics for vehicle seats, furniture cushioning and thermal insulation. The combined investment in the zone will total 100 billion yuan (US$12 billion) within 10 years, Huang said. "With so many foreign chemical giants involved and huge funds invested, the zone is expected to become Asia's largest chemical park," he said. The city is now moving in the right direction for expanding the high technology industries of information, medicines and new materials. By the end of this year, these three industries will reach combined sales of 160 billion yuan (US$19.3 billion). The city has clinched a big order with an American company to export 3 million computers a year.
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