Press briefing on foreign trade

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Speaker:
Zhang Ji, director-general of the Department of Foreign Trade, Ministry of Commerce

Chairperson:
Hu Kaihong, vice director-general of the Press Bureau, State Council Information Office

Date:
May 20, 2014

International Business Daily:

In addition to the current circumstances in foreign trade and its importance in the new era that the director just explained to us, my question concerns the practice. Would you please compare the current circular with the one comprising 16 items and issued in September of 2012? Are there any differences between the two circulars, such as, the focuses of the policies and the implementations?

Zhang Ji:

This is a very good question. In my opinion, maintaining the growth of foreign trade conforms to the current situation of our country. It is a long-term strategy, which is important in regards to developing the economy and improving people's welfare across the country. Not a single country in the world pays less attention to foreign trade as well as export. Even the United States, EU, Japan and South Korea are of no exceptions.

As it is generally known, export, investment and consumption are the three driving forces behind economic growth. Yet, to me, the significance and logic of the three forces are different in regards to the varied developments of countries and regions.

Based on our own situation, economic growth still relies on investment, domestic demand and foreign trade over a certain period of time. Therefore, it is wise and farsighted to underscore the supporting force of foreign trade to the national economy at the Central Economic Work Conference. Foreign trade composes an important part of our open economy. Meanwhile, it is an important driving force behind the national economic development.

To be specific, first, it maintains a steady growth of the national economy. Foreign trade increased from US$20.6 billion to US$4.16 trillion from 1978 to 2013, registering an annual growth of 15.9 percent on average. Meantime, exports grew by16.3 percent yearly on average. In recent years, foreign trade contributed 20 percent on average to the economic growth annually.

Secondly, it increases the employment rate. Amid the accelerating urbanization and industrialization, hundreds of millions of migrants have moved away from the countryside. Moreover, we have millions of university graduates and postgraduates to be hired each year. It is calculated that foreign trade has provided jobs to 100 million people, among which the trade of processing industries have offered 40 million job vacancies.

Thirdly, the foreign trade is capable of breaking the bottlenecks caused by the shortage of natural resources. We are lacking natural resources as the average proportions of agrarian land, water, minerals and forests for a single person in our country account for only one second to one 10th of the world's average. The imports will not only ensure the domestic market supply, but also break the bottleneck in national economic development.

On a fourth note, it pushes forward the development of various industries. It is good for our enterprises to change mindsets, improve operational systems and enhance competitiveness after joining the competition globally.

Fifthly, it increases fiscal revenue. Tariffs and customs duties on value added tax are linked to the scale of foreign trade. Taxation from foreign trade took up 15 percent of the country's overall revenue. It would be up to one third if we add the taxes from foreign enterprises and the export-oriented economy.

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