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NO.20 (Ocrober 15, 2003)
2004/05/22



  • Minister Zhao Qizheng Meets Media Delegations From Taiwan and Macao
  • Minister of Commerce On China's Imports
  • 2003 Foreign Direct Investment Goals Set
  • Is China Exporting Unemployment to the United States?
  • Japanese Enterprises Net Huge Profits in China
  • Development of China's Undertakings for the Disabled



    Minister Zhao Qizheng Meets Media Delegations From Taiwan and Macao

    The Central Government's policy toward Taiwan remains unchanged. The referendum called for by Taiwan authorities poses danger.
       
    On September 9, Zhao Qizheng, minister in charge of the Information Office of the State Council, met a delegation of visiting journalists from Taiwan in Beijing. The minister stated that the Central Government's policy toward Taiwan would remain unchanged following reshuffle of the State Council. To date, the process of establishing three direct links (trade, mail, and air and shipping services) across the Taiwan Straits has been slower than expected by the mainland. The crux does not lie in negotiating skills, but in the basis of negotiation. Gratifying results can be achieved as long as all barriers are removed.
       
    The referendum called for by Taiwan authorities is a step that would split the country, and is a dangerous act, the minister said.
       
    The idea of building an Asia-Pacific operation center proposed by Taiwan years ago is similar to that for the development of Pudong in Shanghai. It is a pity that the project was foiled for some reason. If it could be tried out again, it would greatly benefit the economies of both sides across the Straits, the minister noted.
       
    With regard to the new SARS case in Singapore, the minister said medical institutions at all levels on the mainland are on the alert against a new outbreak. Thus far, no new cases have been found on the mainland. Many medical institutions are conducting research on the source of SARS, and no consensus has been reached so far. Even if there is a resurgence of the epidemic, the mainland will be able to handle it effectively beyond any doubt.
       
    The central authorities respect Macao's decision on enacting a security law in accordance with the stipulation in Article 23 of the Basic Law of the Macao Special Administrative Region (MSAR).
       
    China should draw a lesson from Argentina's devaluation of its currency.

       
    On September 16, Zhao Qizheng and Li Bing, vice-minister in charge of the State Council Information Office, met a high-level media delegation from Macao in Beijing.
       
    Minister Zhao noted that guided by the principle of "one country, two systems", Macao's economy has taken a turn for the better in recent years. The media also has made contributions to the economic progress. The media, serving as a mirror, reflects the world and plays a big role in promoting economic development. The media in Macao, caring for the interests of the whole, has played a special role in maintaining social stability.
       
    While discussing Macao's economic progress in recent years, Li Chengjun, head of the delegation, said that Macao, following its set goal, has given priority to the development of gambling and tourism industries. The MSAR Government has established smooth exchange channels with the media and can attentively listen to the opinions of the media and the citizens, which enables it to achieve fairly good re-suits in administration.
       
    Minister Zhao and Vice-Minister Li exchanged views with delegation members in regard to the RMB exchange rate and to Article 23 of the Basic Law of the MSAR concerning legislation. Owing to China's slow development 20 years ago, they said, the international community had not paid much attention to the RMB. With the rapid development of China's economy over the past more than two decades, the RMB has increasingly attracted attention worldwide and become influential in the international market. This has drawn pressure for its appreciation. However, Minister Zhao noted, the free circulation of a currency should be realized in due course under proper conditions. He cited Argentina's currency as an example. The currency was first overvalued. It was later devalued by 33 percent, and the country's debts soared to USS 170 billion. China should draw a lesson from Argentina. The RMB exchange rate should be dealt with carefully, and it is inadvisable to let the RMB exchange rate float freely before the time is ripe. This concerns not only the interests of China, but also the country's responsibility for the global economy.
       
    On questions related to Article 23 of the Basic Law of the MSAR about legislation, Minister Zhao and Vice-Minister Li held that every country has its own law on national security. Article 23 of the Basic Law of the MSAR stipulates that the MSAR shall enact laws, on its own, concerning regional and national security, so does Article 23 of the Basic Law of the Hong Kong SAR. The timetable will be set by the two special administrative regions. Officials of both the Central Government and local authorities will not make suggestions on this issue. We respect the decisions adopted by the two special administrative regions on their own.
       
    Members of the delegation expressed their hope for closer exchanges with leading officials of the State Council Information Office.




    Minister of Commerce On China's Imports

    --China's import volume in the coming three years will reach USS1, 000 billion, and China will become the world's second largest market by 2020

    While meeting the press during the Fifth Asia-Europe Ministerial Conference held a short time ago in China's northeast coastal city of Dalian, Chinese Minister of Commerce Lu Fuyuan answered questions posed by Chinese and foreign reporters on China's import and export trade and the exchange rate of the Renminbi (RMB).
       
    Total Import and Export Volume to Reach USS1,000 Billion by 2010
       
    China's imports registered rapid growth in recent years, particularly in the first half of this year. During the six years between 1996-2001, China imported a total of USS 1,000 billion worth of goods. The same volume was acquired during the five years between 1998-2002. This indicates that the scale of China's imports is expanding rapidly.
       
    With the present speed of growth, China is expected to achieve the same import volume of USS1,000 billion in the coming three years. In the first half of this year, the import volume totaled USS 185.8 billion, averaging US$31 billion per month. The total volume for this year will stand at US$360 billion, calculated on the basis of a monthly amount of US$30 billion.
       
    The import volume of USS1,000 billion will be reached within only two years by around 2010. As the GDP by 2010 is expected to be double that of 2000, the corresponding goal for foreign trade will be met by then as well, with China's aggregate foreign trade volume rising from US$470 billion in 2000 to USS 1,000 billion and the import volume approaching US$500 billion.
       
    China to Become the World's 2nd Largest Market by 2020
       
    China will become the world's second largest market by 2020, announced Minister Lu. At present, the market scale of more than 1,000 kinds of Chinese commodities (including mobile phones, household electrical appliances and cement) ranks first in the world. China's market in other fields is also growing rapidly. For instance, the country is expected to become the largest computer market worldwide.
       
    Minister Lu expressed his belief that China's estimated market scale for 2010 as double that of 2000 was a somewhat conservative deduction. Take the auto market for example. Sales increased from 2 million units in 2000 to 3.35 million units in 2002. In the first six months of this year, 2.12 million units were sold. The figure is expected to exceed 4 million this year. This indicates that the market scale may double in only three years.
       
    Minister Lu analyzed the reasons for the rapid growth in China's imports. First, the swift development of China's economy calls for an increase in the import of large amounts of raw materials, components and parts. Second, this year is the second year following China's WTO entry, and to honor its WTO entry commitment, China has lowered its tariffs considerably. In addition, following China's participation in the zero tariff agreement in the information sector and other fields, imports of relevant products have soared. Third, the rising price of imported oil in the first quarter this year as a result of the Iraq War is another factor spurring the growth of China's, imports in the first half of this year.
       
    China's Enlarged Imports to Boost Global Economic Growth
       
    The rapid growth in imports suggests that China will become a major market for other countries. It will also help to expedite the economic development of other countries. During the 1997 Asian financial crisis, China's stand of not devaluing the RMB contributed to overcoming the crisis. The country's success in achieving an import volume of USS1,000 billion within a short period following the crisis has contributed to boosting the economic development of Asia and the world at large.
       
    Many countries worldwide are optimistic about the prospects of China's tremendous market. Minister Lu disclosed that at the ministerial meeting some of China's main trading partners expressed hopes of expanding their trade with China.
       
    "We are not worried about the rapid growth in imports, as we have fairly adequate foreign exchange reserves. We will continue to expand and encourage imports to meet the needs of the country's rapid economic growth," Minister Lu explained.
       
    RMB Exchange Rate to Remain Stable
       
    "At present, China persists in maintaining the stability of the RMB exchange rate. However, this does not suggest that the exchange rate will remain unchanged in the future. Whether or not the exchange rate should be changed is determined by China's economic goals. No country would consider the situation of other countries while formulating its own monetary policy, and all countries would give priority to the development of their own economies while taking into account the international situation," the minister added.
       
    All countries intend to fulfill the following four goals: expediting economic growth, expanding employment, enlarging imports while maintaining a balance between revenue and expenditure, and stabilizing the currency. China, persisting in development as the essential principle, has focused on economic growth. "We face many problems in economic development. But we don't avoid them, as we firmly believe that all problems can be solved as long as we keep up a certain speed," Minister Lu concluded.
       



    2003 Foreign Direct Investment Goals Set

    --Minister of Commerce Lu Fuyuan predicts that China will attract US$57 billion in foreign direct investment this year.

    In a written statement to the 2003 International Investment Forum held during the Seventh China International Fair for Investment and Trade in September, Minister of Commerce Lu Fuyuan predicted that China is expected to absorb US$57 billion in foreign direct investment this year.
       
    According to the minister, over the past 25 years since reform and opening-up, the Chinese Government has adhered to the policy of encouraging foreign investment and made continuous efforts to improve its policies and measures in regard to foreign investment and the investment environment. In addition, China's economy has maintained sustained, rapid and sound development during this period. All this has facilitated the sound development of China's foreign capital absorption. By the end of July this year, a total of 446,441 foreign-funded enterprises had been established in China, involving US$887.2 billion in committed foreign investment and US$481.3 billion in paid-in foreign investment. Last year, in spite of a continuous decline in transnational investment worldwide, the amount of foreign capital actually used by China exceeded US$52.7 billion, striking an all-time high and ranking first in the world.
       
    According to Minister Lu, in the first seven months of this year, China approved 22,245 foreign-funded enterprises, with committed and paid-in foreign investment reaching US$59.2 billion and US$33.4 billion respectively. This represents respective rises of 19.13 percent, 33.96 percent and 26.63 percent. A prediction based on current development shows that foreign direct investment to be absorbed by China this year will reach US$57 billion.

    Good results have been achieved in China's "going out" strategy that encourages Chinese businesses to invest abroad, said the minister. By the end of July this year, China had established 7,222 non-financial enterprises in more than 160 countries and regions worldwide, with Chinese investment exceeding US$10.09 billion. To expedite the implementation of the "going out" strategy in the new century, China will encourage and support Chinese enterprises with competitive advantages to engage in various forms of economic cooperation abroad in line with the principles of "equality, mutual benefit, efficiency, diverse forms and joint development".




    Is China Exporting Unemployment To the United States?

    Recently, the media in the United States has shown much concern over the country's unemployment problem, issuing profuse reports about staff reductions in each and every company. However, what's hard to understand is that some reports ridiculously link the problem with China, claiming that the increased unemployment is caused by the influx of Chinese products. Comments such as "Chinese enterprises have grabbed the Americans' rice bowl" and "China is exporting unemployment to the United States" are becoming prevalent in the United States. According to a recent survey by the American Association of Manufacturers, 64 percent of the manufacturing enterprises believe that China poses the greatest threat to their survival. Some personages from America's political and economic circles, making an issue of this fantasy, have repeatedly demanded China appreciate the Renminbi (RMB). A recent commentary in China's Economic Daily makes the following analyses to rebut such falsehoods.
       
    --Internal and external reasons for China's growing exports to the United States. China does have increased exports to the United States. However, of China's total export trade, more than 50 percent is carried on by foreign-funded enterprises, including a large number of enterprises funded by American multinationals. To make maximum profits, capital tends to flow to countries with low production costs. Hence, many US-based multinationals have moved their production bases to China. Though China benefits greatly from this, US investors benefit the most. Losses often follow gains. The transfer of production bases has led to some job losses for American workers. But China should not be blamed for this, as it is an inevitable result of global industrial restructuring, and the United States is not the only country to be affected.
       
    --Positive results of the international division of labor. Rational international division of labor, a result of economic globalization, has played an important role in upgrading industrial structures worldwide. Large quantities of low-cost, good-quality commodities provided by China and other developing countries to America's market have enabled the country's traditional manufacturing industry to release more capital and materials to go in for new and high technologies. This has expedited the upgrading of America's industry, spurred the optimization of America's industrial structure, and helped the United States to extricate it-self from the yoke of traditional industries in good time and to maintain its leading position in the global economy. Without the substitution of traditional industries in developing countries, America's manufacturing industry could permanently remain in the stage of color TVs and refrigerators. If the United States had not given up garment and toy production, it would not have created the world's most advanced information industry and other high technologies. In this sense, the United States, instead of worrying about China's increased exports, should confirm the positive role played by Chinese substitutes in the restructuring and optimization of its industry.
       
    --Benefits of low-cost products. The export of large quantities of low-cost products to the United States, on the one hand, enables the country's poor people to enjoy the goods they could not otherwise afford, thereby improving their lives. On the other hand, it helps reduce expenditure by America's rich people. Furthermore, it cuts expenditure on consumption by the American people. As a chain reaction, the capital thus saved can be diverted to new scientific research projects and the development of new products.
       
    Some American media units and personages from political and economic circles have blamed China for not purchasing American products while exporting large quantities of goods to the United States, spuriously maintaining that it would lead to the collapse of the world trade system. But what they assert is not true. Since the 1990s, while expanding exports, China has increased its imports rapidly. Even in the first half of this year, in spite of the impact of SARS, China's imports rose by 44.5 percent over the same period of last year, with the growth rate exceeding that of exports by 10.5 percentage points. The continuous increase in China's import capacity has made positive contributions to the economic development of the world at large, including that of the United States.
       
    In fact, American goods have been part of the Chinese people's daily life for a long time. Many Chinese now ride in Boeing planes, drive Buick cars, watch American movies, wear Apple jeans, drink Coca Cola, have physical check-ups with the use of American medical equipment, communicate with Motorola mobile phones and work with the aid of IBM computers installed with Microsoft software.
       
    China did intend to purchase larger quantities of advanced products from the United States. The latter, however, owing to political reasons, more often than not banned the exports. Hence, China should not bear responsibility for this man-made trade deficit.
       
    To sum up, saying that "China is exporting unemployment to the United States" does not hold water. A falsehood like this could only be used by some politicians to influence voters. China's exports to the United States aim for mutual complement and mutual benefit. Structural readjustment and industrial upgrading in the United States represent the main reasons for its increased unemployment, which is inevitable and normal. In essence it has nothing to do with China's exports. The American economy is the most powerful in the world, and nobody would believe that China's exports could threaten it.




    Japanese Enterprises Net Huge Profits in China

    Recently released reports on implementation of the budgets of Japanese listed enterprises for the fiscal year 2002 (April 2002-March 2003) indicate that China's economic development has brought numerous business opportunities and huge profits to many Japanese enterprises.
       
    With the rapid growth of China's economy, investing and setting up factories in China can not only lower production costs, but also bring considerably economic returns to many Japanese enterprises, thanks to China's tremendous market and the smooth absorption of Japanese goods in the market. Matsushita Electric Co., Japan's main producer of household electrical appliances, boasts 43 factories in China, which put out a variety of products, ranging from electric cookers to super-thin plasma television sets. The supply of many of its products now falls short of demand in China. Thus, the Chinese market, as Matsushita's main source of profits, has made a considerable contribution to the all-round restoration of its volume of business.
       
    Clarion, Japan's main audio products manufacturer, has transferred most of its motor vehicle audio production to China, with low-cost, high-quality output in view. Since then, the company has gained marked economic returns, with its profits registering a 11 O-percent increase over the previous fiscal year to hit an all-time high of 9.5 billion yen. Konica Co., after transferring the production of photocopy machines and digital camera lenses to China, has not only lowered its production cost by 10-20 percent, but also increased the share of its sales in China's market. Its profits in the 2002 fiscal year set a record high.
       
    Shiseido, Japan's prestigious cosmetics producer, reported a sales volume of 16.9 billion yen in the 2002 fiscal year, up 25 percent over the previous fiscal year.
       
    Along with the rapid development of China's auto and household electrical appliances industries, the demand for synthetic resin has increased considerably. The products of the Sumitomo Chemical Industry Co. have enjoyed a ready market in China, with the sales volume for the 2002 fiscal year rising by 13 billion yen over the previous fiscal year. Investment in China helped Toshiba lower its expenditure on cost by 441 billion yen in the 2002 fiscal year.
       
    China's economic development has led to a growing demand for raw materials, providing a tremendous market for Japanese exporters. Losses for more than a decade had forced many Japanese polyethylene producers to shift to other lines of business or stop production. Changes have taken place in recent years, following increased exports to China. In 2002, Japan exported more than 700,000 tons of polyethylene to China, with the amount greatly exceeding its reduced output of 500,000 tons. Exports to China helped turn the industry from losses to profits.
       
    Thanks to China's growing demand for mould-use steel, the Japanese Kohin Steel Co., which was on the brink of bankruptcy, increased its export to China from 150 tons in 2000 to 1,800 tons in 2002. The company's general manager said that the export of mould-use steel to China has saved the company. Increased export to China is also a main source of profits for Komatsu, a large building machinery manufacturer. Last year, the company's domestic sales dropped more than 10 percent from the previous year. Its export to China, however, increased by 70 percent to 43 billion yen.

    Many personages from Japan's economic and trade circles think that China's economic development has brought numerous opportunities to Japanese enterprises, and China will become a main source of profits for many of them. A research fellow with the Economic and Industrial Research Institute under the Japanese Ministry of Economy and Industry stated that China's growing demand was a key to the recovery of Japan's traditional industries that were at a standstill.



    Development of China's Undertakings for the Disabled

    The Fourth National Congress of the China Association for the Disabled, held recently in Beijing, reviewed the achievements in the undertakings for the disabled over the past five years.

    In the past five years, the government has taken a series of measures to improve disabled people's conditions of subsistence. The 16th National Congress of the Communist Party of China clearly set the task of developing undertakings for the disabled. The State Council has promulgated the Program for the Development of Undertakings for the Disabled in the 10th Five-Year Plan Period (2001-05). The National People's Congress and the Chinese People's Political Consultative Conference have, on many occasions, organized teams to investigate and inspect the enforcement of the Law on Security for the Disabled. The Coordination Committee for the Work of the Disabled under the State Council has intensified its leadership, clearly divided up its duties, and ensured that each of its member units takes on its work for the disabled as a special responsibility. Party committees and local governments at all levels regard caring for and bringing tangible benefits to the disabled as a task that embodies the Party's principle of working for the public and administering in the interests of the people. Associations for the disabled at all levels have been further promoted during structural reform, and the work for the disabled at the grassroots has developed vigorously.    

    Tremendous achievements have been made in the undertakings for the disabled over the past five years:
       
    --The quality of life for disabled people has further improved. The number who have been rehabilitated in varying degrees has increased from 4.16 million to 8.8 million. Particularly, distinctive results have been achieved in treating cataract, preventing and treating mental diseases, providing hearing aids to those with hearing handicaps and supplying artificial limbs of an economic type. The compulsory education enrolment rate of school-age children with sight, hearing or mental handicaps has increased from 64 percent to 76 percent. Vocational education for the disabled has further developed, and a special education system ranging from pre-school education to higher education has initially taken shape. The employment rate of the disabled has risen from 73 percent to 84 percent, with the continuous expansion of employment channels and consistent improvement in employment services for the disabled. The extensive implementation of the poverty-relief program and the special program for aiding poor disabled people has helped nearly 10 million disabled people out of poverty. In addition, the livelihood of 4.99 million destitute disabled people is guaranteed through government allowances, subsidies and other forms of support.
       
    --Opportunities for disabled people to participate in social activities more widely have increased. Profound changes have taken place in the public's understanding of the disabled. A modern sense of caring for the disabled has gradually struck roots in the hearts of the Chinese people. Placing greater importance on the needs of the disabled, educational, health, civil affairs, labor and security, judicial, cultural, sports and other social management departments and public service institutions have created conditions of equal participation and share for them. Various circles in society have carried out diverse forms of activities to aid the disabled, helping them solve problems in living, medicare, education and employment. Attention has also been attached to the construction of barrier-free urban roads, structures and information services, to the convenience of disabled people while participating in social activities and enjoying public services. The mass media has actively publicized undertakings for the disabled, which helps influence public opinion to create an environment for civilization and progress. The general public's consciousness of upholding the rights and interests of the disabled in accordance with the law has been enhanced continuously, and the legal environment for developing disabled people's undertakings has been further improved.
       
    --Capabilities of the disabled have advanced significantly. Large numbers of disabled people, optimistic and dauntless in their pursuit of self-improvement, have enhanced their ideological, ethical, scientific and cultural levels continuously. This has strengthened their ability to participate in social activities. More and more disabled people have become self-reliant, with some of them becoming affluent through hard work. Outstanding disabled people have emerged from all trades, with some of them elected as deputies to people's congresses and members of people's political consultative conferences at various levels. The special art that displays the will and talents of China's disabled people has enjoyed great prestige both at home and abroad, and disabled athletes have won honor for the country in a series of major international competitions.
       
    --China is playing an ever-wider role in international affairs for the disabled. The Chinese Government and organizations for the disabled have actively participated in and promoted international activities for the disabled. The China Association for the Disabled, as a special consultant to the UN Economic and Social Council, has participated in international activities for the disabled in an all-round way and has been actively involved in the drafting of the UN Convention on the Rights and Interests of the Disabled. It has also energetically helped support the two 10-year actions of the disabled in the Asia-Pacific Region. It has established cooperative relations with the International Organization for the Disabled and relevant international institutions. In addition, it has endeavored to explore international cooperative projects, and undertaken international obligations that are commensurate with China's international status. The achievements made in China's undertakings for the disabled have won wide acclaim from the international community.
       
    In the 15 years since the founding of the China Association for the Disabled, China's undertakings for the disabled have developed in scale from small to large and from a relief- and institution-oriented scheme to a comprehensive social cause aimed at providing the disabled with equal opportunities to participate in social activities and share public services. Numerous disabled people have emerged from the status of public welfare recipients to self-reliant workers, and this has profoundly altered their lives.
       
    To date, although the general living standard of the Chinese people has reached a well-off level, that of the disabled, known as the most vulnerable group in the country, has lagged far behind. China now has 60 million disabled people, and the number of their relatives surpasses 200 million. The disabled now make up more than one-third of China's 30 million poor people. The illiteracy rate of the disabled is as high as 60 percent, and the compulsory education enrolment rate of blind children is only 59 percent. The demand for rehabilitation of most disabled people has not been met. The living standards of the disabled are much lower than the average level of society at large, and this gap keeps growing. The barriers that prevent the disabled from participating in social activities still exist, and the tendency to look down on the disabled and infringe on their legitimate rights and interests frequently arises.
       
    It is a glorious and arduous task to realize the goal of ensuring that all disabled people live a better-off life. The Fourth National Congress of the China Association for the Disabled called on all people involved in undertakings for the disabled to make full use of current favorable conditions, correctly estimate the situation, face up to difficulties and take on all challenges, and strive to integrate undertakings for the disabled with the country's overall development program and to create a new situation for the cause of the disabled.




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