Roundup: Future of China Held High at Fortune Forum

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Roundup: Future of China Held High at Fortune Forum

As the Fortune Global Forum wrapped up IN Shanghai Wednesday, global business leaders made it clear that the world has high hopes for China's future, and the global business circle will focus on this nation brimming with vitality and hope.

The '99 Fortune Global Forum, the largest in history, has been attended by representatives from 60 of Fortune Magazine's top 500 companies and hundreds of Chinese and overseas enterprises.

Themed "China: the Next 50 Years", the three-day forum hosted wide-ranging discussions on topics on the minds of most investors, including China's information industry, financial and enterprise reforms and market potentials.

Praising China's great successes in the opening and reform drive, the world's most famous entrepreneurs also stressed their long-term obligations to China.

General Motors Corp. of the United States, which has been first among the top 500 companies for three years in succession, produced its 10,000th Buick sedan car in China on September 25 in a joint venture with the Shanghai Automotive Industry Corporation. The joint venture plans to produce 300,000 Buicks annually in China by 2010.

Richard Wagoner, Jr., president and CEO of GM, promised to bring the company's latest production technologies and management experiences to the new facility in China.

Ericsson, the Swedish telecommunications giant, which has made China its largest market since last year, revealed that from now through the end of 2000, it will double its investment in China to 600 million US dollars.

The Royal Dutch/Shell Group also announced that it will not only participate in the development of China's energy industry, but also join in and support China's strategy of sustainable development.

Shell has just signed a contract valued at three billion US dollars on the development of a large gas field.

These strategic investment plans, all formulated after careful consideration, fully demonstrate the powerful allure of the Chinese market to transnational conglomerates. The latest survey by Fortune Magazine on foreign investors in China shows that large- scale and systematic investment by transnational companies that began in 1993 will reach a new peak by 2006.

So far, over 200 of Fortune's top 500 companies have invested in China. By the end of last year, China had actually used foreign investment of 406.9 billion US dollars.

Experts held that major causes of China's fascination to foreign investors are political and social stability, steady economic development, a profitable huge market, increasingly important status in the global economy, and the constantly-improving investment environment.

Forum participants said that the development process from small pilot investments in the 1980s to the systematic investment in recent years indicates that a stable China governed according to laws has increased their investment confidence.

Chairman and CEO of Nokia Corporation Jorma Ollila said, "We are pleased to see China's legal system is improving. Cooperation is set on mutual trust, and the experience of Chinese leaders in managing the country over the past years makes us confident in our China investment."

Over the past 20 years, China's annual average economic growth reached 9.7 percent, with gross domestic product jumping to seventh in the world and foreign trade volume rising to 11th. The Chinese economy has become an indispensable part of the global economy.

Justin Yifu Lin, a professor of the China Center for Economic Research at Beijing University, said, "The share in the Chinese market will decide whether a transnational conglomerate can edge into the top 500 list or raise its ranking on the list in the next century. China is the world's largest potential market, and is the logical choice for conglomerates to maintain their status."

In the process of economic globalization, the steady growth of the Chinese economy has contributed greatly to the prosperity and development of the Asian and even the global economy. Contributing editor of Fortune magazine Jim Rohwer said that China showed an active attitude of responsibility in minimizing the adverse effect of the Asian financial crisis over the past two years, and managed to maintain a stable economic growth, convincing investors that China is one of their ideal choices.

Global capital always flow to profitable places. With a 1.2- billion-strong population, China has great market potential. Surveys show that two thirds of foreign-funded firms in China are making profits, while most of them believe that they will get rich returns in the coming five years.

Richard Wagoner said, "Seen from either the scale or growth potential, China is a fascinating market. As a global competitor, GM pays special attention to the Chinese and the whole Asian- Pacific market. GM's cooperation with China is like a marriage, the mutual input is not half to half, but 100 percent to 100 percent."

Zeng Peiyan, minister in charge of the State Development Planning Commission, told representatives that China is formulating its 10th Five-Year Plan (2001-2005), which will focus on the development of infrastructure and basic industries, including water conservancy, energy, transport, telecommunications, raw materials, environmental protection and high technologies.

As a result, China will be able to maintain fairly high economic growth speed in the coming five to 10 years, he said.
Taking environmental protection as an example, in the coming 10 years the output value of China's environmental protection industry is expected to have an annual growth rate of 15 percent to 20 percent; by 2010, the output value will reach 35 billion US dollars.

In addition, by 2010 China's power industry will increase its installed capacity by 200 million kilowatts, its program-controled telephones will have 200 million new lines, and investment in infrastructure will amount to a trillion US dollars.

When talking about China's reforms of state-owned enterprises, representatives held that the ongoing SOE reforms need large amounts of capital, advanced technologies and management, and cooperation between foreign investors and China in this area will reap mutual benefits.

At the turn of the century, China continues to offer preferential policies for overseas investment, while guiding and encouraging foreign investors to put their money in energy, transportation and other key fields. Finance, insurance and other service fields are also being gradually opened to overseas investors.

Vice Chairman of the Royal Dutch/Shell Group Maarten van den Bergh described China's promises to reforms as "very clear and very ambitious."
"I believe, in the coming 50 years, China will be more prosperous on today's solid basis and will hold an even more important position in global economy," he said. (Xinhua)

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