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Remarks by H.E. Ambassador GUAN Chengyuan of the People's Republic of China at the WTO Conference Hosted by the British Chamber of Commerce
Brussels, March 6th 2002

Ladies and Gentlemen,

Good afternoon!

I'm very delighted to have the opportunity to join you at this conference and share with you some of my thoughts about China's economic prospect and the China-EU relations after the country's WTO accession.

China's WTO accession is a historic event. A win-win situation as such is of far-reaching significance both for China and the world at large.

China's accession brings to the world much benefit.

- First, China's membership helps make the WTO more universal, representative and authoritative. China is now the 7th largest trading nation globally in terms of its total trade volume, which is as high as 500 billion US dollars or more. It has also a potential market of  1.3 billion people. Without China’s involvement, the WTO is by no means complete.

- Second, China's WTO accession helps push forward the new round of WTO negotiations, establish a new fair and reasonable international economic order on an earlier basis. It can also help create more favorable conditions for the trade and economic cooperation among different countries to develop on a healthy and smooth track.

- Third, enormous business opportunities will come out for foreign commodities to enter the Chinese market, thus injecting new vigour into the international economic cooperation and the world economy.

On the other way around, the WTO accession benefits  China a lot.

- First of all, by entering the WTO, China can compete and cooperate more in the international economy both in breadth and depth. The Chinese economy can thus be further converged and integrated with the world.

- Secondly, China will further its reform and opening-up, improve its domestic investment environment and in the meantime explore the overseas market.

- Finally, our country will have a better platform to learn from and draw upon experiences from other countries. China will be in a better position to speed up its efforts to improve the socialist market economy system and the modern enterprise system.

China will certainly have its share of challenges after the WTO accession.

- China has to familiarize itself with the WTO rules. Therefore, there is an urgent need for training all kinds of professionals.

- China must accelerate the establishment of a new foreign trade administrative regime. The government functions will be much broadly transformed accordingly.

- WTO membership is bound to produce tough foreign competition for China, which will have a great impact on some of China's industries and enterprises.  

- China will confront much pressure in terms of employment. Some workers will lose their jobs, thus an increased pressure on China’s social security system.

Some people overseas therefore put a question mark on China's ability to abide by the WTO rules and deliver its commitments. I can say to you in a responsible manner that China has both the determination and capability to tackle difficulties of all sorts on its way forward.

The Chinese Government and people have been fully prepared for the WTO accession. We know what opportunities we have. Nonetheless, we are better aware of the difficulties ahead. The issue of accession itself had been well deliberated on. Following this strategic decision, we will certainly honour commitments and fulfill obligations. The Chinese leaders have repeatedly stated that the strong determination of China to abide by the WTO rules and its own commitments are beyond any question and doubt.

The policies of the Chinese Government have been well supported by the Chinese people.  In view of the WTO-related opportunities and challenges, the Chinese Government has adopted different measures and initiatives.

- These include efforts to speed up economic restructuring and reform, to improve the enterprises' capability for technical innovation and managerial level so as to sharpen their competitive edge in the market and raise the ability to ward off risks.

- All kinds of professionals are being introduced, who are well versed in the know-how and rules of international trade and economic affairs.

-  Efforts are also made to increase job opportunities and encourage multiple ways of reemployment by opening up more channels of employment and reforming the labour and employment system. The establishment of an improved social security system is moving forward.

These policies and measures have been proven significantly effective. The ordinary Chinese have got real benefits from these policies with their material and cultural lives greatly improved. Our people support stability, support reform and are also in strong favour of the Government's strategic decision to join the WTO.

China has a sound economic base. Against the backdrop of the international economic and trade slowdown in recent years, the Chinese government continues to implement the proactive fiscal policy and prudent monetary policy. High priority has been given to the expansion of domestic demand.

Our GDP in 2001 has been over US$ 1 trillion, which is number 6 in the world. The Chinese economy realized a 7.3% growth in 2001, import and export trade grew by 7.5%, actual foreign investment increased by 14.9%, and foreign exchange reserve reached 212.2 billion US dollars at the end of that year. China is expected to see an economic development on a sound track of rapid growth, high efficiency, and low inflation. It is expected that China's economic aggregates will double that of 2000 by 2010. We have full confidence and capability to overcome the temporary difficulties.

There has been an overall opening pattern forming up in China. We have stored some experiences in terms of increasing international economic cooperation and taking on foreign competition. China does have its own strength in this regard.

Our country has been the largest foreign investment recipient among developing countries for 9 consecutive years. Actually, more than 400 transnational corporations of the world top 500 have invested in China. Many a famous Europe-based transnational has settled in China and big companies like Bell, Janssen, Nokia, Erisson and Siemens are already household names among the Chinese people. Reform and opening-up let the world come into China and the other way around, China has learned much more about the world.

As an old Chinese saying goes, “ the brave fear no difficulty and the wise let go no opportunity”.  The Chinese people are working hard to do better on different fronts by taking pressure as motivation. In the 3 months since the WTO accession, gratifying and significant differences are emerging in structural, legal and conceptual terms.  

- A government-wide study of WTO rules is now in full swing both at central and local levels.  President Jiang Zemin, Premier Zhu Rongji and other state leaders have all made important speeches in this regard, stressing that leaders at all levels should have a good command of WTO rules and put them into practice, be well aware of how to guide the economic undertakings forward, encourage and reward innovation and be good at seeking advantages while avoiding disadvantages.  

- Rapid progress has been made in relevant legislation, law-revision and annulment.  Statistics show that there are forty pieces of laws and administrative regulations to be enacted or revised pre and post accession.  Up till now, thirty-four of them have already been in place.  The decision to repeal twelve pieces of administrative regulations has been announced.  The annulments of thirty-six pieces of State Council directives have been or will be made known to the public.  The target of revising or annulling over 1150 sectoral regulations has been by and large reached.  It is really a rare case in the world that such an arduous task has enjoyed so much progress in such a short time.

- In addition, solid measures have been taken to honour the WTO commitments. Four initiatives have been taken to lower tariff rate, to eliminate non-tariff barriers, to expand access for agricultural products and to open the service market.  For the time being, China has taken the initiative to lower the tariff rate to from 15% to 12% and has also delivered its promises on other aspects.  

China has created favourable conditions and environment for foreign products and direct investments. Efforts in this regard include those aimed at increasing policy transparency, adopting the national treatment principle, sharply removing restrictive regulations on foreign enterprises, and gradually opening up the service markets such as banking, insurance, tourism and telecommunication.  The scope of Sino-foreign economic co-operation is being further broadened, intellectual property rights are given full respect and the legal system is being improved.  China has established a fair, transparent, foreseeable and law-based trading system and market climate.

The Chinese business community has adopted a positive attitude in coping with the situation after the accession, taking on the international competition aggressively and working very hard to enhance competitiveness so as to make the strong industries even stronger and turn the weak into strong.

Moreover, the Chinese Government is well aware of the issue of unemployment resulting from the WTO accession and has so far adopted a series of measures, especially by developing the tertiary industry, to create more jobs.  The Government is focusing on the establishment of social insurance system and the development of social welfare undertakings.  

We are confident that China will maintain its political stability, social unity and the momentum of economic development.  What we have is a bright future.

Ladies and Gentlemen,

China's accession to the WTO has also brought about a better prospect for China-EU economic cooperation.  EU is now China’s largest technology supplier, the third largest trading partner and the fifth largest actual investor.  China in turn is EU’s fourth largest trading partner.  The trade volume between China and the EU reached 76.6 billion US dollars in 2001.  It was an increase of 11% over the same period the previous year, higher than that of the trade with Japan and the US.  China has introduced 1050 technical projects from EU states with a total value of 4.42 billion US dollars.  EU enterprises have set up 12583 investment projects in China, with an implemented investment worth of 30.3 billion US dollars.

China will further open its domestic market to all countries, including those in Europe.  It is anticipated that China's GDP will enjoy an annual increase of 7% from 2001 to 2005.  China's GDP will reach 1.2 trillion US dollars by 2005. The total foreign trade volume will stand at 680 billion US dollars and FDI reaching 40 billion US dollars each year.  According to preliminary estimates, China will import equipment, technologies and products worth of 1.4 trillion US dollars from 2001 to 2005.  This will create enormous opportunities to enterprises from EU states.

China is now opening its sectors of finance, insurance, telecommunications, foreign trade, commerce, transportation, construction and tourism in a step-by-step manner.  

Foreign business people are allowed to set up Chinese-foreign equity or contractual joint ventures, or wholly-foreign-owned companies.

China encourages foreign investment in high-tech industry and agriculture in particular. Incentives will be formulated in terms of equity limitations on registered capital, ownership composition and taxation.  At the same time, foreign investors will be encouraged to open venture capital companies. Favorable conditions will be created for the setting-up and development of high-tech enterprises and agricultural companies.  

China will take more initiatives to attract foreign investment in overhauling and transforming state-owned enterprises.  Foreign investment is allowed to participate in assets reorganization and disposal of financial assets management companies. Foreign investors are also welcomed to participate in the reorganization and transformation of SOEs by means of cross-border mergers and acquisitions, industrial investment funds, venture capital, equity joint ventures, franchised operation and so on.

China will further relax limitations on joint venture trading companies with foreign investment.  Export by foreign-invested enterprises will be facilitated.  Transnational companies are encouraged to locate their regional headquarters and research and development centers in China.

China encourages foreign investment in the development of the West.  Limitations on foreign investment in service sector of the middle and western regions will be appropriately relaxed.  Requirements of domestic financing of foreign-invested projects in the western regions will be eased.  

China will also take steps to promote the liberalization in services.  Laws and regulations will be worked out regarding foreign investment in banks, insurance companies, travel agencies, foreign trade companies, construction, project design, accounting firms, education services, distribution of AV (audio-visual) products, civil aviation and telecommunication.  

EU states are leading the world in many of the above aspects by enjoying an obvious advantage.  We welcome a more important role by the EU and its member states in China’s overall foreign trade and economic co-operation.  Of course, we also hope that the EU will fully open its market to China so that the two-way, win-win and mutually beneficial co-operation will get deepened and expanded over time.

Years of contacts have helped strengthen the mutual understanding between China and the EU and co-operation is getting more and more mature.  China and the EU will make further use of their economic complementarity and the great potential of co-operation will gradually turn into real achievements.  Europe will sure have a big play in the new round of China's development after the WTO entry. I am certain that there will be a better future for both of us!

Thank you.

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