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China's Entry of WTO and Chinese Economy

2001-10-15author:Yi XiaoZhunsource:

Distinguished Members, Ladies and Gentlemen,

I am very pleased to attend the fifth meeting of China Council for International Cooperation on Environment and Development. I am also very pleased to have this opportunity to make a brief presentation on China's entry of WTO and related economic issues.

Profound changes have taken place in the economic and social life of China since the reform and opening policy was adopted. The Chinese economic growth has been maintained at a rate of 9.7%. According to projection by relevant international bodies, China's GDP in 2000 exceeded USD 1,000 billion, ranking the seventh in the world. The foreign trade has risen from USD 38 billion in 1980 to USD 473.3 billion in 2000, having become the seventh trading country in the world. The foreign direct investment starts from scratch and has reached USD 370 billion since 1980. China has the biggest foreign investment among the developing countries in the past successive 8 years. As the largest developing country in the world, China has been positively taking part in the proceeding of economic globalization.

As you all know, all the negotiations concerning the resumption of China's status in GATT and China's entry into WTO have come to a close after fifteen years of hard negotiations. The Fourth Ministerial Conference of WTO, which will be held in Doha, Qatar next month, will review and adopt the legal documents for China's entry into WTO. China will become an official member of WTO after all necessary legal procedures are completed.

After the entry into WTO, China will speed up its steps to open up trade in the fields of insurance, banking, telecommunications, commercial circulation, tourism and services. This will be helpful for American and European companies with advantages in these fields to enter the market of China. China will adopt open, transparent and fair trade and investment policies and encourage fair competition by adopting national treatment so as to create a better environment for investment and build up more confidence and sense of stability for foreign investors.

After the entry into WTO, China will continue to follow the policy of actively, effectively and rationally attracting foreign investment. Various forms of attracting foreign investment will be actively explored, such as acquisition, merging, BOT, enterprise investment and security investment. Foreign investors are encouraged to invest in areas of high technology and establish R & D centers in China in order to upgrade the quality and level of foreign investment. China will adopt further opening in geographical terms by actively promoting the opening of central and Western China. Meanwhile, China will speed up the implementation of the strategy of "marching out ". We will encourage those economically strong enterprises ready to invest in other countries to do so as soon as possible. Through investment by Chinese enterprises, the economic exchange and cooperation with other countries will be strengthened. China will make great efforts to develop E-commerce and facilitate use of information in management of national economy. The Chinese enterprises will be supported to use more information networking technologies to undertake international cooperation and exchange. The development in China will definitely bring huge business opportunities to the industry and commercial communities in other countries of the world.

Ladies and Gentlemen,

After China enters WTO, China will strictly follow WTO rules and fulfill the commitments made. For more than two decades, China has been making major efforts in opening markets and observing relevant international rules. During the ninth five-year plan period, the average tariff level of China has decreased from 35.6% in 1995 to 16.7%, a reduction by 53%. In terms of no tariff measures, China has reduced from 1247 products with licenses or quotas in 1992 to over 300 products at present. China has also committed to gradual elimination of these quotas and licenses within 3 years after entry into WTO. New progress is also made in the opening of service trade.

To further improve the investment environment in China, the National People's Congress ratified the revised Law of Joint Ventures, Law of Cooperative Enterprises and Law of Foreign Companies. The State Council has revised relevant rules of implementation of these laws accordingly. Some requirements, like local content, balance of foreign currencies, export volume and local procurement, have been removed. As a result, the investment environment in China has been further improved.

Currently, China is losing no time in streamlining, revising and improving relevant laws and regulations in preparation for the entry into WTO and in an effort to establish a legal system compatible with international rules. Those rules against China's commitment for entry into WTO or unsuitable for operation of socialist market economy are being or to be revised or improved will those that should not be retained will be nullified. Since last year, nearly 30 departments under the State Council have been making huge and detailed preparation. They have streamlined about 2300 relevant laws and regulations. Among them, 830 laws will be nullified or ceased and 325 laws will be revised. To guide foreign investment and upgrade the efficiency of foreign investment in China, China is revising the Provisional Guidelines for Foreign Investment and a list of Industries for Foreign Investment in accordance with the strategic needs of national economic development.

To prepare for the entry into WTO, China is also accelerating the shift in the functions of government and upgrading administrative levels and rule of law. Facing with the challenges, the government functions will undergo profound changes in ways of economic management, mechanisms of administering enterprises and rules of and environment for economic operation. These changes will follow rules and requirements of socialist market economy. Rule of law will prevail. Government departments will fulfill responsibilities assigned to them and achieve openness, transparency and fairness in their work. Randomness should be avoided. The government staff must strengthen their awareness of rule of law and improve constantly their level of administration by rule of law through understanding and observing laws.

Furthermore, China will create a unified, stable, transparent and predictable policy environment for foreign investment and trade based on the efforts streamline comprehensively the foreign-related economic policies. China will continue its efforts to regulate the market and economic order by breaking local protectionism and sector monopoly. The fakery and low-quality production will be seriously punished in order to protect the intellectual property rights. The lawless fee collection, fine, examination and imposed levies will be prevented. With this, an open and fair competition market will be created for both Chinese and foreign companies.

Ladies and Gentlemen,

After the entry into WTO, China will accelerate reform in the system of foreign trade in accordance with the fundamental principles of non-discrimination and predictability and our commitments and reality. China will set about establishing a new system of foreign trade management that follows WTO rules and fits the reality in China.

First, we will ensure that the implementation of WTO Agreements and the Protocols China ratified will be coordinated and unified in all the tariff territories of China, The local laws and regulations and measures must follow WTO Agreements and the provisions and obligations in the Protocols. Secondly, we will ensure the transparency of foreign trade policies. China will implement those laws, regulations and measures that have been released Official Journals will be designated to release these laws, regulations and measures. Thirdly, a mechanism of judicial review and administrative litigation will be established to ensure the transparency and fairness of foreign trade policies. All the policies, measures and behaviors relevant to the WTO Protocols will be included in the scope of judicial review and administrative litigation. Fourthly, within 3 years after entry into WTO, China will gradually open the right to engage in foreign trade. Fifthly, national treatment will be adopted on the issues of quotas and licenses and some non-tariff measures in order to minimize the barriers for access of foreign products and services.

Ladies and Gentlemen,

Since the second half of last year, the world economy is slowing down. Recession has occurred in some countries and regions. However, the Chinese economy has achieved a rapid growth, through effective macroeconomic adjustment and control, adoption of positive financial and monetary policies and actively promoting foreign trade while expanding domestic markets. In the first half of this year, China has achieved an economic growth of 7.3%, which becomes one of spotlights of the world economy. From January to August this year, China achieved a trade (import and export) volume of USD 330.53 billion, a 9.6% increase over the same period of the previous year. From January to July, the foreign investment in China came up to USD 24.21 billion, an increase of 21.7% is achieved. By now the foreign currency reserve of China is close to USD 200 billion.

Next five to ten years will be a very important period for social and economic development in China. China is promoting strategic restructuring of economy by stabilizing and further consolidating the position of agriculture as a fundamental part of national economy, accelerating industrial restructuring and structural upgrading, developing vigorously service sectors, speeding up information use in national economy and social life and continuing to strengthen infrastructure. It is estimated that in the next five years China will keep growing its economy at a rate around 7%. By 2005, China's GDP will reach 12.5 trillion Yuan. According to a preliminary estimate, China will import equipment, technologies and products worth USD 1.4 trillion from 2001 to 2005. After the entry into WTO, China will further open its markets which will provide a huge market and growth motivation for the world economy.

As the biggest market in the world and a country with one-fourth population of the world, China will create human prosperity in the 21st century together with other members of WTO.

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