Mr.
Chairperson,
Ladies and
Gentlemen,
It gives me great
pleasure to have the opportunity to share with you my
perspective on the situation of Chinas economic
development and the prospects of Sino-Dutch economic
cooperation.
In the era of
economic globalization, in particular, with the recent trend
of economic slowdown in many countries, Chinas
economic situation, its role in the world and its future
development has more and more become the focus of attention
by other countries and regions in the world, including the
business circle in the Netherlands. I consider it my duty,
as the Chinese Ambassador, to shed some light, with my
limited knowledge, on what is happening and what is going to
happen in my country.
Let me
begin with Chinas economic
situation.
Past twenty years or
so have witnessed fast, stable and sustained economic
development in China, with the average annual GDP growth
rate being around 9%.
China was
also hit by the Asian financial crisis that began in mid
1997. However, thanks to the pro-active financial and solid
monetary policies as well as the efforts to expand domestic
demand, China has managed to keep the momentum of
comparatively high economic growth rate despite the impact
of the crisis. Chinas GDP last year reached 8.94
trillion yuan, equivalent to 1.1 trillion U.S. dollars,
representing an increase of 8% over the previous
year.
Imports and exports have
increased rapidly. Compared with 20 years ago, Chinas
foreign trade has increased by 22 times. The volume of
imports and exports of the year 2000 totaled US $474.3
billion, an increase of 31.5% over 1999. China is now the
seventh largest trading nation in the
world.
Cumulative foreign
direct investment in China has now amounted to over $ 359
billion. Conditions for the utilization of foreign
investment have become more favorable than ever. The number
of foreign-funded projects approved by the Government in
2000 increased by 32.1% and contracted foreign investment
grew by 51.3% over 1999.
Industrial structural adjustment has
made significant progress and the reform of large and
medium-size state-owned enterprises advanced vigorously.
Good results have been achieved in upgrading technology in
key enterprises. Fast growth has been registered in the
production of high-tech products. The output value of
telecommunication industry exceeded one trillion yuan, about
120 billion US dollars, making it the first pillar among all
manufacturing industries. Remarkable progress has been made
in establishing a modern corporate structure in those
enterprises. In 1997, 6,599 large and medium state-owned
industrial enterprises were operating at a loss. By the end
of 2000, the number was reduced to less than 2000.
Considerable
improvement has been made in infrastructure and environment.
Last year, more than 16,000 kilometers of banks along major
rivers and lakes were reinforced. More highways and railway
tracks were put to use. The capacities of urban water, heat
and gas supplies and urban sewage systems were improved.
Major projects were carried out to improve the ecological
environment in key areas, to protect natural forest
resources and natural pasture and to restore terraced fields
on steep slopes to woodland or pasture in the central and
western regions. Projects to prevent and control
environmental pollution in Beijing proved to be successful.
The environmental conditions of the whole country have been
greatly improved.
Peoples
living standard has improved considerably. The per capita
GDP in 2000 reached US$800, while 20 years ago, it was $250.
Commodities are abundant. Prices remain stable, the consumer
price of 2000 was only 0.4% higher over
1999.
The economic situation of
the first half of this year continued to be in good shape.
The GDP growth rate was 7.9%. Industrial output value
increased by 10.4%. The foreign trade value totaled $241
billion, an increase of 11.3% over the same period of last
year. The export increased by 7.3%. Compared with last year
when export increased by 28% over 1999, it is an obvious
sign of the impact of the global slowdown, however, it is
still on the increase. In the first half of this year,
foreign direct investment that was actually utilized was
27.4 billion US dollars, 20% more than the same period last
year. The financial situation remained stable. Chinas
foreign exchange reserves reached 193.5 billion US dollars
by mid September.
I might have
bored you with figures, but figures quite often explain
themselves.
People are asking,
why, unlike many other countries and regions, Chinas
economy has not been seriously affected by the slump of the
world economy?
In my view,
generally speaking, export, investment, consumption are the
main factors contributing to economic growth. Although
Chinas export has been affected to certain extent, the
other two factors are still functioning. In particular,
China has a huge domestic market, with enormous potentiality
yet to be tapped. Strong domestic demand plays a significant
role in stimulating the economic development. It is believed
that about 90% of the 7.9% growth rate of the first half of
this year was contributed by domestic demand. This factor
will continue to function in the
future.
Having talked a lot
about the positive side of Chinas economic situation,
I would like to briefly touch upon the other side. The
achievements China has so far made are the results of
overcoming numerous problems and difficulties of all kinds.
We are still facing many problems and challenges. I am sure
you have all heard about the Long March in Chinas
modern history, China is now in the process of a new Long
March. The transition from Planned economy to socialist
market economy is no plain sailing. Our economic
restructuring is far from being completed. The difficult
task of reforming the state-owned enterprises is only a few
steps from the beginning. The development between the
eastern and western regions of the country is unbalanced.
Unemployment, income disparity, ecological and environmental
protection are all problems China is confronted with. To
integrate itself with the world economy, China still has a
long way to go.
Ladies and
Gentlemen,
China will continue to
implement the opening-up policy and its door will be open
wider to the outside world. It will promote all-directional,
multi-tiered and wide-ranging opening-up and take part in
international economic cooperation and competition in width
and depth. It will continue to develop its foreign trade
vigorously. It will stick to the policy of making active,
rational and effective use of foreign capital. It will
continue to improve its investment climate in order to
attract more foreign capital. It will explore various ways
to make better use of foreign capital by acquisition,
merging, investment fund and equity investment. It will
phasein the liberalization of such service sectors as
banking, insurance, telecom and trade, and promote the
opening-up of its central and western regions. It will
support enterprises to take part in international
cooperation and exchange. It will play an active role in the
multilateral trading systems, as well as regional and
international economic cooperation.
The next five to ten years
will be a crucial period for Chinas economic and
social development. The blueprint has already been drawn up.
According to the program, continued efforts will be made to
promote economic growth and social progress, with
development as the main theme, with restructuring as the key
link, with reform, opening-up and technological advancement
as the driving force, and with higher living standards as
the ultimate goal. At present, China is making strategic
readjustment to its economic structure and speeding up the
readjustment of its industrial setup, regional structure,
urban and rural structure and ownership composition. China
will continue to give prominence to the development of
science, technology and education, accelerate the
utilization of the information technology in economic and
social progress, strengthen environment protection, expedite
township development, and improve the public service system.
Chinas GDP is expected
to reach around 1.53 trillion US dollars by 2005.
Chinas development will present huge business
opportunities to other countries. According to a preliminary
estimate, from 2001 to 2005, China will import US$1.4
trillion worth of equipment, technologies and products. We
welcome more overseas investment in China. We hope to
establish long-term stable cooperation with businesses in
the Netherlands and around the
world.
Ladies and
Gentlemen,
Entering into the
21st century, China faces more opportunities as well as more
challenges in its development. We are determined more than
ever to move steadily towards the goal of modernization. In
my view, three major events will play an important role in
Chinas future economic development, namely, the
strategic economic restructuring, the Go West Strategy and
Chinas entry into the WTO.
Firstly, the strategic
economic restructuring. Readjusting and improving industrial
structure is the key to the strategic economic
restructuring. The information technological revolution has
greatly speeded up economic globalization. Facing this
trend, we are going to reform the traditional industrial
sectors with high, new and advanced technologies. We are
going to intensify construction of water conservation,
transportation, energy and other infrastructure facilities
and attach great importance to strategic issues concerning
resources. We are going to accelerate development of the
tertiary industry, especially service sectors such as
information, finance, and legal service. We are going to
develop new and high-tech industries such as IT industry and
bio-technological industry. All these will increase the
dynamics of the Chinese future
economy.
Secondly, the Go West
Strategy. Western China, which spans some 56 percent of the
nation's territory and accounts for 50 percent of its
mineral resources, has not enjoyed the same degree of
prosperity as eastern China. The ultimate goal of this
Strategy is to fully develop the economy in this region and
close the economic gap between Chinas eastern and
western parts. We will carry out the strategy step by
step.
As the first step, in the
next five years, our major efforts will focus on
infrastructure construction and environmental protection
projects, thus to create a sound natural and social
environment for investment. Major projects such as
transferring natural gas from western areas to Shanghai area
in the east with the total length of pipeline of 4200
kilometers, transferring electricity from the western to the
eastern areas, construction of Qinghai-Tibet railway,
protection of natural forests and reforestation have already
started. These projects will make notable impact on the
overall development of the Western areas. In the first half
of this year, the Chinese Government has already pooled 170
billion yuan, or about 20 billion US dollars, in
infrastructure construction in the region, and 12 other new
long-term infrastructure projects with a total investment of
300 billion yuan, or about 37 billion US dollars, will begin
this year.
The development of
Western China needs investments from home and abroad.
Therefore, preferential policies are adopted. For example,
foreign investment projects in western regions under the
encouraged category can enjoy a reduced 15% income tax rate.
Investors of transportation, electricity and water
management will enjoy a 2-year exemption of income tax and a
three-year 50% reduction of income tax. We hope more
businesses both from China and abroad, including those from
the Netherlands will be interested in western
China.
And lastly, Chinas
entry into WTO. Now all obstacles have been cleared and
China is only one step away from becoming a members of WTO,
that is the approval by the ministers at the Doha meeting in
November.
Chinas entry
into WTO is a historical event and a two-win situation for
both China and the world. As far as the world is concerned,
after China joins the WTO, Chinas enormous market
potentiality will be turned into purchasing power, thus
provide the countries and the regions of the world with a
huge, open market. This is an important contribution China
will make to the mankind. As far as China is concerned,
after becoming WTO member, China will, according to the WTO
principles, further perfect its socialist market economic
system that complies with common international practice.
China will strengthen economic and technological
co-operation with all the WTO members. This will greatly
promote Chinas modernization drive and the ability to
take part in international economic
activities.
Joining the WTO
will lead to further improvement of Chinas investment
environment, and boost the confidence of foreign investors
and profit forecasts of foreign investment projects in
China, will enhance its exchanges and cooperation with other
members in trade policies and market environment, and will
also boost Chinas trade with other WTO members to a
new level.
Ladies and
Gentlemen,
In the present world
we are living, there are two major trends, i.e. peace and
development. All the countries and people want peace and
development, so do China and the Chinese people. Unless we
are forced to do otherwise, we will concentrate all our
efforts to the development of our
country.
Summing up the
experiences and lessons of the past 20 years or so, we
credit our progress to the proper handling of the
relationship between stability, reform and development.
Practices have proven that reform is the precondition for
development, development is the guarantee of stability, and
without stability, there will be no basis for reform and
development. If China is to continue to make progress, it is
of vital importance to continue to successfully deal with
these relationships.
A stable
and prosperous China is not only in the interest of the
Chinese people, but will also contribute to the peace,
development and stability of the
world.
We are confident that we
will achieve all our objectives. We are prepared to make
more contributions to the world, to the
mankind.
Ladies and Gentlemen,
Finally, let me turn to
Sino-Dutch economic
cooperation.
Soon after I set
foot on your beautiful country, I had a meeting with a
senior Dutch official, who asked me if I knew that there was
a saying: The Dutch people are the Chinese in Europe,
and the Chinese are the Dutch in Asia? This saying has
later on been repeated to me by different people.
I believe there is some sense
in this saying.
At least, the
Chinese people and the Dutch people have one thing in
common: Both are good at doing
business.
As a matter of fact,
we have been doing business quite
well.
With the concerted
efforts of both governments and business circles of our two
countries, recent years have witnessed sound and steady
development of the overall bilateral economic and trade
relations.
Our bilateral trade
volume grew up to $7.9 billion in 2000, while in 1983, it
was 270 million US dollars. The Netherlands is now
Chinas third largest trade partner in Europe, while
China has become the second largest trade partner of the
Netherlands in the Far East. Dutch investment in China has
also been undergoing a steady growth. According to
statistics, by the end of last year, Dutch enterprises had
invested in 824 projects in China, with contracted amount of
US$7.48 billion, of which US$ 2.99 billion in total has been
actually invested, making the Netherlands the fourth largest
investor in China among EU
countries.
As a famous Chinese
poem goes: If one desires for a grander sight, one has
to reach a greater height. In order to promote our
bilateral economic relations to a new higher level, we need
to make more efforts. I believe that Dutch enterprises can,
among others, have a bigger share in the reform of
Chinas social security system, in the reform of
Chinas traditional industries, in the construction of
western Chinas infrastructure and in the field of
ecological and environmental protection.
There are broad prospects for
economic and trade cooperation between our two countries.
There are enormous business opportunities awaiting the Dutch
companies to explore. Seize these opportunities before too
late, because other countries are also trying to seize
them.
My advice
are:
Firstly, be more
far-sighted;
Secondly, do more
investigation by sending more people to China and meeting
with more in-coming Chinese delegations, so as to have
better knowledge of what China actually
needs;
The last but not the
least, be more decisive and bolder. Although many Dutch
companies, big or small, have been quite successful in doing
and expanding business in China, I sense that some Dutch
business people are still a little bit too cautious. Take
investment for example. The Netherlands is among the top ten
countries in the world in term of its investment in foreign
countries, yet its direct investment in China only accounts
for about 3% of its total foreign investment, ranking only
the 13th among the top twenty countries that make investment
in China. You can do more in investment in China and in
other fields as well.
As
Chinese Ambassador to the Netherlands, it is one of my
missions to further promote the economic and trade relations
between our two countries. I am sure, by making joint
efforts together with all of you present here and others, I
will accomplish my mission successfully. At the same time, I
wish to assure you that whenever you need help, the Chinese
Embassy and myself will always be at your service.
Thank you very
much for your attention.