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China's Economy Forum

The Bright Future of an Open China
Shi Guangsheng, Minister of Foreign and Economic Cooperation

Nanjing, China - 19 September 2001

Distinguished guests,
Ladies and gentlemen,

On the occasion of the 6th World Chinese Entrepreneurs Convention, I would like, on behalf of the Ministry of Foreign Trade and Economic Cooperation of China, to extend my warm welcome to distinguished guests who have come from afar, and to express my best wishes to Chinese and overseas Chinese who are active in the business community and who have contributed to closer exchange and cooperation between China and the rest of the world as well as the development of China and the entire world.

With their wisdom and perseverance, the Chinese and overseas Chinese people have long been dedicated to their enterprises which were built up through arduous efforts, and they have made remarkable achievements in economic, scientific and technological fields. We are pleased to see that in the past decade, the World Chinese Enterpreneurs Convention made positive efforts in strengthening exchanges and cooperation between Chinese entrepreneurs across the world and in promoting the common prosperity of China and other countries.

The Chinese and overseas Chinese people around the world in various sectors have been following China's WTO accession process with keen interest. I would like to use this opportunity to brief you on China's imminent entry to the WTO.

Since 1986, China has made unremitting efforts and engaged in the accession negotiation process for 15 years in order to take part in the global multilateral trade system. Important progress has been made since the beginning of this year. In May and June, China reached comprehensive consensus with the United States and the European Union on the remaining issues in the multilateral negotiations concerning China's WTO membership. In July at the 16th and the 17th sessions of the WTO Working Party meeting, which was just concluded, endorsed all legal documents on China's accession to the WTO, symbolizing the fulfillment of the mission of the Working Party. It is expected that the 4th WTO Ministerial Conference to be held in Doha, Qatar this November will pass an official decision, accepting China as a full member of the WTO. This will be a happy news for all Chinese and overseas Chinese business people who have had an interest in and supported China's accession.

Accession to the WTO will be an important event of historic significance in China's open-up and modernization process. It in itself reflects the firm resolves of the Chinese government in deeper reform and greater openness. It gives full expression to China's positive attitude towards voluntary participation in economic globalization and integration in the world economic mainstream. China's entry to the WTO will induce profound changes in and exert great impact on the prosperity and development of China and the world.

After China becomes a WTO member, its market economic system will be further improved. In 1992 at the 14th National Congress of the Communist Party, China explicitly established the objective of the socialist market economic reform and has so far made great achievements after making unremitting efforts. The WTO is a rule-based organization and its rules reflect the general principle of market economy. Accession to the WTO will provide a useful reference for China's reform and open-up, and will help China to learn from the successful experiences and practices of other WTO members and improve the government's ability to exercise economic management and macro control. Deep involvement in activities under the multilateral trade system will help China to learn from trade and investment systems of other countries and further improve China's foreign-related economic administrative system. WTO membership will serve to promote China's economic system reform, strengthen the basic role of market mechanism in resource allocations and accelerate the establishment of a socialist market economic system which is full of vitality and dynamics.

After joining the WTO, China will make its policy and legal framework more complete and transparent. Since WTO is a rule-based global economic and trade body, its members must subscribe to WTO rules. To make its economic policies and laws consistent with WTO rules,  China's National PEople's Congress and its Standing Committee have adopted the amended Law on Sino-foreign Equity Joint Ventures, Law on Sino-foreign Cooperative Ventures and Law on Foreign Enterprises. Relevant departments of the State Council have reviewed about 2,300 laws, regulations and other legal documents and found 830 of them would be nullified and 325 amended. After becoming a full member of the WTO, China will further review and improve the foreign-related economic policies, laws and regulations, to maintain the consistency and authority of national policies and laws and provide a stable, transparent and predictable policy and legal environment for foreign business people in their economic and technical cooperation with China.

Following China's accession to the WTO, its market will be further opened up and achieve a greated degree of integration. In recent years, China made several voluntary tariff cuts based on its only need for development and to prepare for its entry to the international trade body. With these cuts, China has gradually lowered the threshold for foreign investment inflow and increased market access for goods and services. Based on its commitments, China in the future will gradually open up banking, insurance, telecommuications, foreign trade, commerce, transportation, construction, tourism and intermediary services. By then, foreign companies can establish equity and contractual joint ventures or wholly owned ventures in these sectors, and the geographical coverage and scope of opening-up will be progressively expanded. Alongside gradual market openings, a large unified, open, competitive and orderly market will take shape, the trend of greater integration of the domestic market with the global market will be clearer than never before, and competition will be based on a greater degree of equality and order.

After joining the WTO, the Chinese government will make its administrative activities more rule-based and efficient. To adapt to the need for the development of socialist market economic system, China has made governance according to law a basic state policy, formulated the Law on Legislation which clearly defines the jurisdiction of central and local law-makers and did a lot of work on government streamlining and transformation of government functions. In the future, China will do all it can to build a clean, industrious, practical and efficient government, which is efficient and service oriented. China will conduct administration in strict accordance with law, further improve the functions of government, reduce adminnistrative examinations and approvals and gradually grant national treatment to foreign invested enterprises. China will continue to improve market economic order, break down local protectionism and sectoral monopoly, fight against production of fake, counterfeited and shoddy products, protect intellectual property rights, safeguard the legitimate interests of all economic entities and promote the sustained and sound development of its economy.

With the country's accession to the WTO, Chinese enterprises will get an international environment ensuring their right to fair compeitition. For a long time in the past, China was excluded from the world multilateral trade system and had to coordinate its external economic relations through bilateral consultations. As a result, Chinese enterprises and products have been subject to unfair treatment in their access to the international marketplace, their competitive advantages could not be fuly brought out and the development of foreign economic and trade activities was hindered to a certain extent. After China becomes a WTO member, domestic enterprises will conduct international trade and economic cooperation under the principles of multilateral trade negotiations and economic globalization. By then, China will take part in the formulation of world economic rules adn settle world economic and trade disputes through the WTO Dispute Settle ment Mechanism. This will help to safeguard the legitimate interests of China and other developing countries and increase China's influence in multilateral economic affairs.

New progress is expected in China's economic and trade cooperation with neighboring and other Asian countries. There are large Chinese communities in the neighboring and other Asian countries. Recent years have witnessed the momentum of continuous and rapidely growing trade between Chinese and its Asian neighbors. For instance, China's import from those countries is growing faster than China's export to those countries. In the first half of this year, the combined trade with these neighbors amounted to US$92.13 billion, or 38.2% of China's total trade. These countries also made US$4 billion of direct investment in China, accounting for 19.5% of direct forign investment inflows and representing a substantial increase over last year. Today, 45% of imports, 20% of foreign direct investment and 35% project contracts come from neighboring countries. At the same time, these countries are important destinations of Chinese investment. In the first six months of this year, China invested US$88 million in its neighbors, which accounted for 42% of its overall overseas investment and was 20 percentage points higher than the comparable period of last year. In both the near and long term, membership in the WTO will land China and its neighbors in a win-win situation. Greater openess will only contribute to stability, development and prosperity of China, Asia and the world.

After the accession, China will add new vitality to the global economy. In 2000, the Chinese economy increased by 8%, its GDP exceeded US$1 trilion for the first time and ranked the 6th in the world. Its foreign trade reached US$474.3 billion, the 7th largest in the world, and China was the biggest destination for foreign investment among developing countries for the 8th straight year. Today, more than US$100 million foreign direct investment flows into China every day on average. Against the background of global economic slowdown and economic downslide in many countries, the Chinese economy still realized fairly rapid growth and went up by 7.9% in the first half, becoming one of the bright spots in the world economy. From January to July, China realized US$284.8 billion in exports, up by 10.6%, and attracted US$24.21 billion of foreign investment, up by 21.7%. Today, China has over US$185 billion in foreign exchange reserves. The economy is expected to grow by around 7% during the 10th Five-year Plan period. By 2005, China's GDP will reach RMB12.5 trillion yuan, toal foreign trade will climb to US$650 billion which will be equally divided between import and export, and foreign direct investment will be around US$40 billion every year. Preliminary estimations indicate that China will need to import US$1.4 trillion of equipment, technology and products from 2001 to 2005. This will create many substantial business opportunities for overseas business communities, including overseas Chinese communities, and will contribute to global economic growth.

Once in the WTO, China will play a positive role int he multilateral trade system. The 2001 APEC Trade Ministers Meeting held in Shanghai has already sent a positive signal on the launch of a new round of multilateral trade talks. China has adopted a positive attitude towards the new round and will work with WTO members based on its own economic development levels to play an active and constructive role in pushing forward the new round. The world needs a fair and equitable multilateral system, and many problems in the system must be resolved through negotiations. We believe the new round of multilateral trade negotiations should help to bridge the gap between the north and south and establish a fair and rational new world economic order. The new round should promote global economic development as well as trade and investment liberalization and facilitation. The new round should pay special attention to the interests of developing members and increase their voice in global economic affairs, while the developed countries should genuinely implement their committed obligations under the Uruguay Round Agreements and improve market access for developing members. Last but not least, the agenda of the new round should be based on extensive consultations in order to ensure that any results achieved from the round will reflect a general balance of all interests. 

Ladies and gentlemen,

The next five to ten years are an important period for China's economic and social advancement. China has defined the blueprint for the next five years: Reform is the main theme, restructuring is the major task, reform, open-up and scientific and technical progress is driving force, better life for the Chinese people is the fundamental objective, and economic and social progress will be vigorously promoted under these principles. China's economy, trade and economic cooperation with the rest of the world will continue the good development momentum and the country will remain one of the most attractive destinations for foreign investment. Today, China enjoys political stability and economic development, and the Chinese people are living and working in happiness and contentment. Beijing's successful bid for the 2008 Olympic Games not long ago once again shows the world has chosen the open China. Together with the imminent accession to the WTO, this will push forward China's reform, open-up and economic develoment. We hope business people around the world who have the foresight in China's development, including those from the overseas Chinese business communities, will seize these historical opportunities. We welcome all of you and other business people to come to China for mutually beneficial economic and trade cooperation, so together, we can create a splendid future.

The millions of Chinese and people of Chinese origin living abroad are Chinese descendants and members of the Chinese family. They are the valuable wealth of the Chinese nation and represent a positive factor in China's participation in economic globalization. Those from the business community are the most active and best representatives of them all. They always follow China's construction and development with interest, and they are active in investment and business development in China. they are the bridge between China and other countries. I sincerely hope, against the backdrop of accelerated economic globalization and China's imminent entry to the WTO, the overseas Chinese business community will further play out its own advantages, continuously strengthen its exchanges and cooperation with China and plya a greater role in China's participation in the economic globalization process and integration in the world economic mainstream. I sincerely hope the overseas Chinese business community will take advantage of this World Chinese Entrepreneurs Convention, look into the new century, work together as linked by the traditional culture of the Chinese nation, to promote China's development and make fresh contributions to the great development of the Chinese nation.

Thank you for your attention.

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