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Commentary: Injecting Fresh Vigor into World Economy

Shanghai in October once again becomes a place that attracts world attention: As the APEC informal senior officials meeting just closed, two-ministers meeting, the summit of industrial and commercial leaders, the industrial and commercial consultation council meeting, and the ninth informal meeting of leaders will begin one after another. As an important grand meeting in the APEC historical process, by then it will see leaders and officials of 21 economic entities gather together in Shanghai to discuss matters of paramount importance concerning Asia-Pacific economic cooperation and development.

China's Economy: Focus of World Attention

At the APEC finance ministers meeting held early last month, the 7.9 percent growth rate of China's economy in the first half of the year became the focus of attention of the finance ministers from various economies. Singaporean finance minister said that the robust growth of China's economy had brought confidence not only to China itself, but also to the world economy; leader of the Brunei delegation also held that China's economic growth had exerted positive influence on Asian countries; Canadian finance minister expressed the hope that China would play an important role in stimulating economic globalization.

In the macro environment featuring a marked slowdown in the global economic growth rate, China's economy has maintained a good development momentum this year; in the first half of the year, China's GDP saw a 7.9 percent year-on-year increase; from January to August, its industrial output value increased by 10.4 percent over the same period last year, financial revenue by 24.7 percent, total import and export volume by 9.6 percent and the volume of foreign investment actually used by 20.4 percent.

While analyzing the Chinese economy, chairman of the Hong Kong and Shanghai Banking Corporation specially emphasized: Thanks to long-term stability for reform and opening up, the inland of China, like a magnet, is attracting international investors.

In his recently published research report, chief economist of Morgan-Stanley pointed out that he looked at the global economy as gloomy, and that only China enjoys a thriving economy. In the global economic system, China is the only big country that has a promising economy. He added: over the past four years, the fact that China has twice successfully overcome the impact brought about by global economic recession, the anti-risk capability of the Chinese economy is being continually enhanced.

Motive Force Propping Up China's Economy

In the pattern of the world economy being sinking into depression, where is the supporting point that helps the Chinese economy to continue its prosperity?

It is the view of some experts that the continued great momentum of the Chinese economy mainly benefits from the strong personal consumption and the vigorous public investment; some economic personages hold that it is due to China's possession of a vast domestic market. These analyses contain some truth, but what is beyond doubt is the fact that the Chinese government's actions of judging the hour and sizing up the situation, its timely readjustment of the macro control orientation, its adoption of a correct macro-economic policy and its perseverance in expanding domestic demands-all have played a decisive role in boosting economic growth. Since 1998, China has been continually faced with such a situation as increase in the uncertain factors of the world economy, insufficient domestic demand, excessive enterprise products, continued price fall, the lack of strength for consumption growth, difficulties in foreign trade and other new situations, new problems and new contradictions, under this circumstance, the Party Central Committee and the State Council firmly and determinedly adopted the policy of expanding domestic demands, implemented a proactive fiscal policy and stable monetary policy for years on end and, through the comprehensive use of planning, financial and banking means, gave play to the leverage role of price, taxation, interest rate and exchange rate, and actively expanded investment, consumption and export. Over the past years, the government has issued long-term national treasury bonds worth a total of 400 billion yuan which was mainly put into energy source, communications, the upgrading of power grids, the construction of water conservancy projects and other links urgently needed for the national economy, thus accomplishing many things which it had wanted to do for many years. Despite a glide in the growth of export trade in the first half of the year, investment and consumption, however, remained strong, with increases reaching 17 percent and 10.3 percent respectively. The expansion of domestic demand had not only cleared the outstanding accounts in domestic infrastructure construction, improved people's living standards, supported the sustained, rapid development of the Chinese economy, but also has provided the Chinese economy with more room for manoeuvre in the turbulent world economy.

Going with the Surging Tide of World Economy

At the time when China is actively participating in the APEC cooperation process and is busily preparing for the series of APEC activities and conferences, not long ago, a good news about the adoption of all legal documents concerning China's WTO entry came from Geneva, location of WTO Headquarters. This was another rich achievement China gained in actively pushing its reform and opening up drive. Joining the WTO will provide a larger stage for China to further merge with the world economy. Shi Guangsheng, minister of Foreign Trade and Economic Cooperation, has promised: After China's WTO accession, the Chinese market will be further unified and opened, the Chinese government's administrative management will be more standard and highly efficient, and China's environment of policy and law will be better and more transparent. Facts show that in its preparations for WTO accession, China has revised and sorted out 2,300 relevant laws and regulation documents, of which 830 documents have been planned to be abolished and 325 documents to be revised. After its "WTO entry, China will further check up and improve the system of foreign-related economic policies, laws and regulations, maintain the consistency and authority of these policies and laws and create a steady, transparent and foreseeable environment of policy and law for foreign businesses. Dai Xianglong, governor of the People's Bank of China, also indicated that five years after China's entry into the WTO, foreign banks and Chinese banks will enjoy equal national treatment.

Zeng Peiyan, minister of the State Development Planning Commission, said that the general situation regarding the Chinese economy is more inspiring: the growth rate of the Chinese economy reach around 7 percent in the next five years after its WTO entry. To support economic development, China will create a favorable environment for various market economic activities, including large-scale construction of urban subways, and enlarged construction of highways, railways, airports, ports and power projects. The Chinese government will provide a series of preferential measures for foreign investment to enter the western region of China.

(People's Daily 10/17/2001)

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