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Long Yongtu Talks About China's Economic Challenges
Long Yongtu, Vice Minister and Chief Representative for Trade Negotiations (CTR) of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) talked about his views on China and economic globalization and other topics in Chengdu July 9.
Economic Globalization
Long feels that the essence of economic globalization is multinational companies making organizational adjustments on a global scale. Countries with planned economies have never been a part of economic globalization. China's economy must become a market economy in order to become a part of the global economic system as well as the economic globalization process. Look at China's efforts to join the World Trade Organization (WTO). The year between 1986 to 1987 was used as a preparation period. It took six years, from 1986 to 1993, before China¡¯s market economy problem was solved and another six years to open up China's markets. Long emphasized several times in his report that a country¡¯s economy or a region's economy must have an open market economy or else it is pointless to even talk about joining the WTO.
Restructuring
If China does not undergo restructuring, it will miss out on the new round of economic development. Long said he begs to differ with the term ¡°Sunset Industries¡± used to describe old economy industries. Regardless of time, industries related to food, clothing and housing are always very important. Of course, the development of modern technology has placed greater demands on traditional industries as well given it greater opportunities. Long points out restructuring should clarify the role of enterprises. The government should create a better environment for its enterprises and not interfere too much with their business activities.
Entry into the World Trade Organization (WTO)
Long touched on the effect joining the World Trade Organization (WTO) would have on Chinese enterprises. After joining the World Trade Organization (WTO), both the international and domestic environment where local companies operate will witness a profound change. The international environment will be freer for companies to run their business. And as the domestic environment moves faster towards a market economy, the change in the role of the government will favor the enterprises.
Developing the West
Long pointed out that as regions all over China formulate their strategies to develop their economies, it must address the core problems. The strategy in the West shouldn¡¯t be to help the poor or "give them blood transfusions", the western regions need to set up market economy mechanisms to "make their own blood". The West needs to bide its time because it cannot play a major role in China's economic system in its current state. It is very important for the western region to become a part of multinational companies' production and sales network. At the same time, the West cannot just depend on foreign investments. As the West opens up, domestic investments from China's wealthier regions will rush in. Using domestic investments and working together with China's larger companies are an integral part of pushing forward the development of China's West.
Long Yongtu spoke at the opening ceremony of 2000 Chengdu ¨C China Large Enterprise Groups and Western Region Economic Restructuring Forum in Chengdu July 9.
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