Commentary: Promoting APEC Development on 'Two Wheels'

On the global economic map, the region of the Pacific rim is undoubtedly the most dynamic plate nowadays. The Asia-Pacific Economic Cooperation Organization (APEC for short), as a regional economic cooperation organization in the region with the most member countries, of the largest scale and at the highest level, has played an irreplaceable role there.

Since its establishment in 1989, APEC has always regarded "interdependence, common benefit, a persistently open multilateral trading system and reduction of trade barriers within the region" as its purpose, APEC has thus gradually evolved from a loose forum to a compact regional economic cooperation organization. During the period, free and convenient trade and investment and economic and technological cooperation have become "two wheels" expediting the rapid operation of APEC, thus making active contribution to bringing APEC to maturity and perfection.

APEC: Two Wheels Turning Together

Since the 80s, along with the accelerated development of the trend of economic globalization, trade and investment within the Asia-Pacific region have become more active, mutual infiltration and interdependence of the economy have been further enhanced, how to intensify the policy coordination among the economic entities in this region and maintain the vitality of regional economies have become the question of common concern to the Asia-Pacific circle. It was against this background that APEC came into being as the time required. At present, APEC has 21 members with population accounting for 41 percent, GDP for 57 percent, and trade volume for 44 percent, of the world's total. In terms of investment, APEC as a whole is both the world's largest investment exporter and the biggest investment importer. On the world's economic stage, APEC plays a significant role.

In 1993, the First APEC leaders' informal meeting was held in Black Island, USA, at which free and convenient trade and investment was designated as the center of APEC work. The Indonesian Meeting held in the following year set up the first milestone marking APEC development, the famous "Bogor Declaration' published by the meeting drew up the long-range blueprint for the realization of free and convenient trade and investment of the Asia-Pacific region, this meant developed members should reach trade and investment liberalization not later than 2010, and the developing members not later than 2020. In 1995 and 1996, APEC successively adopted the "Osaka Action Agenda" and the "Manila Action Program, beginning to carry out various member countries' promises by the two ways of unilateral action program and collective action program, including formulation of 15 specific fields of liberalization and convenience, such as tariff and non-tariff measures, service, investment and intellectual property rights. The start of the above-mentioned work marked APEC entry into a substantive stage. Over the past several years, APEC member countries have achieved fairly great progress in promoting trade and investment liberalization.

Economic and technological cooperation represents another wheel of APEC, which has always been the field energetically initiated by the developing member countries. The 1995 Osaka Meeting formally defined that economic and technological cooperation and trade and investment liberalization had equal positions. The Manila Framework formulated in 1996 set forth the goal and principle for it and established the six priority cooperative projects, namely the exploitation of human resources, infrastructure facilities, capital market, science and technology, environmental protection and small and medium-sized enterprises. After the eruption of the Asian financial crisis, various APEC member countries gained a deeper understanding of the importance and urgency of economic and technological cooperation and generally listed it as a precondition for the Asia-Pacific economic recovery. Although the development of economic and technological cooperation lagged behind trade and investment liberalization due to various factors, with the joint efforts of the member countries, however, some concrete results were gained.

China: Fulfilling Promise to Boost Prosperity

The Asia-Pacific region is China's strategic foothold in its all-directional opening to the outside world, the Chinese side attaches great importance to various cooperation activities of OPEC. Since its formal accession to APEC in 1991, China has all along taken an active attitude toward spurring the organization's trade and investment liberalization, and has advocated that APEC should persistently open the region and should not turn it into a closed trade group; APEC members should open to each other, APEC members and non-APEC members should also open to each other, they should discard the discriminatory practice in their economic and trade relations; While implementing trade and investment liberalization, APEC should give full consideration to the members' different developmental levels and specific situations, adhere to the basic principle as set down in the Osaka Agenda, maintain an appropriate and balanced liberalization speed and at the same time it should strengthen economic and technological cooperation, and reduce the gaps between members, so as to attain the goal of common prosperity. These propositions reflect the interests of China and the vast number of developing member countries, and effectively guarantee that APEC moves ahead along the correct direction.

It is undeniable that the coordination and balance of interest among various member countries are the fundamental and final basis on which the "two wheels turn together", while the political motivation by leaders constitutes the main factors for its development. As of 1993, President Jiang Zemin has attended the informal meeting of leaders for eight successive times and at the 1995 Osaka Meeting, he declared that China would drastically lower the tariff rate. Thereafter, the Chinese government had continually taken practical actions to fulfill its relevant commitments. Beginning from April 1, 1996, China has reduced the import duty on more than 4,900 products, with the average tax rate falling from 39.5 percent to 23 percent and the reduction range reaching 36 percent. On October 1, 1997, China once again lowered the tariff level on imported commodities, with the average tariff rate falling to 17 percent and the reduction range standing at 26 percent. By 2000, the arithmetic average tariff on China's imported commodities had dropped to 15 percent and it was planned that by 2005 the average tariff on industrial goods would fall to 10 percent., At the informal meetings of leaders, Jiang Zemin repeatedly stressed the importance of economic and technological cooperation, systematically expounded the relevant propositions and principles which received the unanimous acknowledgement of various member countries. At the 1994 Bogor Meeting, Jiang put forward his proposal for convening an APEC science and technology ministerial meeting. At the Vancouver Meeting in 1997, he proposed formulating an agenda on APEC science and technology industrial cooperation toward the 21st century which was adopted at the Kuala Lumpur Meeting in the following year. To coordinate the implementation of this agenda, China set up the China APEC Science and Technology Industry Cooperation Fund worth US$10 million, and established the "China APEC Enterprises Joint Conference", these efforts have played a substantive role in impelling APEC economic and technological cooperation to advance in depth.

The 2001 World Investment Report published recently by the UN Trade Development Conference and the latest statistics released by the International Monetary Fund (IMF) indicate that although the Asia-Pacific economy is faced with unprecedented challenges, it is also confronted with more and newer opportunities. We have every reason to believe that so long as we fully understand the different developmental levels among member countries, uphold the principles of independence and voluntary participation, flexibility and reaching unanimity through consultation, and adhere to the principle of attaching equal importance to trade and investment liberalization and economic and technological cooperation, follow the two timetables set by the Bogor Meeting, APEC will be able to accomplish great things in the aspects of constructing a stable and opening economic and trade environment, enhancing the Asia-Pacific economic vigor and further merge with globalization, and the "two wheels" will rotate more smoothly.

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