China's WTO Entry
19 Industries to Face Both Challenge and Opportunity After WTO Entry

China's accession to the WTO will bring important development opportunities for its economic construction, of course, it will also bring many challenges, but it should be said that opportunities would outdo challenges. Then, how do ordinary people look upon the Chinese market after WTO entry? What kind of products will be well received? What products will face grim challenges? What products will bring in more opportunities? What are enterprises expecting of the government? Recently, Beijing Youth Daily conducted a survey in Beijing, Shanghai and Guangzhou.

--After WTO Entry, Who Will Have Greater Competitiveness?

After China's accession to the WTO, of the State-owned and privately owned enterprises, who will have stronger market competitiveness? The survey shows that 58.5 percent of the surveyed said that compared with State-owned enterprises, private enterprises are more receptive to new things and more adaptable to the ever-changing market, their market competitiveness will be stronger.

State-owned enterprises are currently undergoing a series of restructuring and reorganization. Compared with private enterprises, State-owned enterprises are probably more conservative in terms of their market concepts and operational mechanisms and will sustain more violent impacts. Of course, there were also 30.6 percent of the people surveyed who were filled with confidence in the strength of State-owned enterprises. The answers given to this question by these three localities were different: 33.5 percent of those surveyed held State-owned enterprises had competitiveness, while there were only 27.3 percent of people holding this view in Beijing, in Guangzhou those holding this view lay between the above two (31.1 percent); most of those surveyed in Beijing held that private enterprises were more competitive, accounting for 65.1 percent, while those holding this view made up only 50.2 percent in Guangzhou, the proportion was 60.7 percent in Shanghai.

--Entrepreneurs Full of Expectations of the Government

Then, what are the expectations of entrepreneurs after WTO entry? What are their attitudes? Generally speaking, entrepreneurs are quite optimistic about the situation after WTO entry, the majority of enterprises maintained the most active reaction was enhancement of their own competitiveness.

The survey conducted by the China Entrepreneurs' Investigation System shows that entrepreneurs are full of expectations of the government, they expected that the government could quickly accomplish the change of government functions after WTO entry. Most enterprise managers hoped the government would adopt measures to improve macro external conditions, the choice rate of measures arranged in the first five positions comes in order as follows: perfecting the social security system, deepening State-owned enterprise reform, straightening out the relations between government administration and enterprise management, improving the market system, including improving the market environment and promoting entrepreneurs to become professionals. Of which the social security system received the greatest attention.

--What enterprises Do Common People Most Hope to Get Foreign Firms Involved in Competition?

The survey shows that 43.2 percent of those surveyed most hope that foreign firms would compete with the telecom industry. This is because people are dissatisfied with the current monopoly of the domestic telecommunication industry, and along with the price adjustment conducted twice not long ago by the telecom industry, the ordinary people seem to have faintly sensed, from the footfalls of the "WTO entry", the fact that they are or will soon bid farewell to the worry caused by the expensive telecom cost, it can thus be seen that the telecom industry has held an important position in the daily life of ordinary people. There also existed noticeable differences in the choice rates in the three localities, 58.9 percent of those surveyed in Guangzhou "hoped that there would be foreign enterprises involved in competition with telecom industry", 20 percentage points higher than that in Beijing and Shanghai (Shanghai 37.9 percent, Beijing 32.1 percent). The choice rates of other enterprises were in order like this: Auto industry (13.6 percent), Banking insurance (9.1 percent), stocks and securities (7.3 percent).

--Do Common People Favor Chinese Goods, Or Choose Foreign Goods?

Of domestic and foreign products and services, which kind will people be inclined to choose after WTO entry? The survey shows that over half of the residents surveyed were inclined to buy foreign products in the order arranged as follows: Digital cameras (69.4 percent), handset (68.8 percent), motor cars (65.9 percent), palm computer (62.5 percent), household appliances (60.6 percent), family computer (56.9 percent), all belonging to high-tech products. What's gratifying is: in the choice of family computer, 30.3 percent of those surveyed said they were inclined to buy home-made products, this shows that domestic computers are already quite competitive.

Over half of residents were inclined to buy domestic products which are arranged in the following order: Dairy products (67.4 percent), fruit (59.3 percent), housing (52.5 percent), concentrating mainly on daily consumer goods.

--19 Industries Face "Challenges" and "Opportunities"

In light of the current market share and competitiveness of the domestic market, we classify the products of 19 major industries roughly into three categories of market: 1. Leading market for domestic products; 2. Mixed competition market; 3. Leading market for foreign products. Currently domestic products on the leading market include palm computer, household electric appliances, family computer, telecom, travel by air, wire TV, tourism, insurance, stock, bank, fruit, housing, dairy products, embracing products of the overwhelming majority of enterprises; products on the mixed competition market include mainly automobiles, cosmetics and home furnishings and building materials; foreign products on the leading market include handset, digital cameras and high-grade clothes. The survey demonstrates that the 19 major industries will face both "challenge" and "opportunity"

--Computer, Household Appliance and Automobile Enterprises to Face Severe Tests

Palm computer, household appliance and family computer are in the area facing "severe tests". i.e., these three categories of products are currently domestic products in the dominant position, although there are foreign brands participating in competition, due to factors such as price, however, the Chinese people mostly buy Chinese products. However, after China's entry into the WTO when tariffs are reduced and price is liberalized, under the circumstance of giving no consideration to price factors or when prices are almost the same, with regard to these three types of products, over 60 percent of those surveyed indicated that related domestic enterprises will undoubtedly be faced with severe tests. Take household appliances for instance, after WTO entry, home-made household appliances will enter into protracted war with foreign household appliances. Nevertheless, nearly 40 percent of the surveyed said that the above-mentioned enterprises also contain fairly big opportunities.

In the face of China's auto industry still lacking the capability for independent development, 70 percent of those surveyed indicated that they would later choose "foreign products". So the competitive pressure facing China's auto industry is tremendous, therefore in the five years of protection after WTO entry, it is vitally important whether they can find a road suitable for their own development, because it determines the fate and future of China's auto industry.

--Superior Domestic Enterprises Have Greater Opportunities

The survey shows that telecom, aviation, wire TV, tourism and insurance are currently superior industries at home and they will have still greater opportunities after joining the WTO. People holding this view accounted for about 60 percent of those surveyed. In addition, most consumers cherish expectations of domestic brand-name garments, financial business and housing consumption.

(People's Daily November 22, 2001)


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