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Manufacturers, Exporters, Wholesalers - Global trade starts here.

China, US Likely to Dominate World Economy

Vice Premier Zeng Peiyan said at the World Economic Forum China Business Summit 2004, which closes on Monday in Beijing, that China will achieve an annual economic growth rate above 7 percent through 2020. His prediction echoed forecasts by some of the world's business leaders, who said that the global economy will be gradually dominated by both the United States and China, rather than by the US alone.  

China's gross domestic product should reach US$4 trillion and per capita GDP is likely to increase to US$3,000 in 2020, said Zeng at the two-day summit jointly organized by the World Economic Forum and the China Enterprise Federation. China's GDP has grown at an average rate of 9.4 percent over the past 25 years, and per capita GDP topped US$1,000 last year.


Speaker Jeffrey E. Garten, dean of Yale University's School of Management, said that he expects that the US will be required to share its dominance of the world economy with China within the next 10 years.


He said that the United States and China will vie for resources globally, a situation that will require China to adopt a more assertive foreign policy that could compete with that of the US in some areas. China's under-representation in many international organizations must change, Garten stated, and the US and China should cooperate at the highest levels to prepare for the evolution in their relationship with each other and with the world.


Garten also warned that China should put more effort into protecting its culture and education while integrating with the global economy.


Other speakers expressed concern about the state of Sino-US economic relations.


Yu Ping, vice chairman of the China Council for the Promotion of International Trade (CCPIT), said the two countries had laid solid foundations for mutual economic development with the permanent most-favored nation status the United States extended to China in 2002.


In the years between 1979 -- when the two countries established diplomatic relations -- and 2003, Sino-US trade multiplied by a factor of 50, to US$126.0 billion, according to China Customs.


In 2003, China's exports to the United States reached US$74.9 billion, climbing 32.7 percent year-on-year. The nation's imports from the US rose 25.7 percent to US$27.6 billion.


US investment in China has also grown rapidly. In 2003, US investors poured US$4.3 billion in actual investment into 2,553 projects. By the end of last year, they had invested a cumulative US$30 billion in the mainland, covering such areas as machinery, oil, electronics, telecommunications, chemicals, autos and pharmaceuticals.


However, Yu complained that the complicated visa application process, which requires fingerprinting, has become a frustrating non-tariff barrier to Chinese businesspeople who might wish to invest in the United States.


The US government, he said, has also failed to do enough to promote exports to the Chinese mainland. For example, it should lower its restrictions against exports of high technology.


Moreover, said Yu, while promoting its own exports to China the US should publicize its desire for Chinese investment there. Few Chinese companies understand that the United States is also hungry for new capital and new jobs.


The theme of the two-day China Business Summit 2004 is "China's Development: Balancing Fast and Smart Growth." Participants include Ma Kai, chairman of the National Development and Reform Commission; Li Wei, vice chairman of the China Banking Regulatory Commission; Grant Aldonas, US Undersecretary of Commerce for International Trade; and Japan's Foreign Affairs Minister Yoriko Kawaguchi.


(China Daily, China.org.cn September 13, 2004)

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