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| Speech of Mr. Fu Ziying at the 5th Annual Conference of China's Import and Export Enterprises |
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Ladies and Gentlemen,
I am very glad to have this opportunity here, at the 5th Annual conference of China’s Import and Export Enterprises held by the CAITEC. (Chinese Academy of International Trade and Economic Cooperation) First of all, please allow me, on behalf of MOFCOM, to extend our sincere congratulations to the successful of the annual conference, and to extend our warmest welcome to all guests and participants. I would like to exchange some opinions with you on China’s foreign trade development, upcoming challenges and our responding strategies and policies.
1. China has seen tremendous development since its entry into the WTO five years ago
--trade volume hit new high.
Since December 11, 2001, after China entered into the WTO, its foreign trade progressed to a new high. In 2001, China’s import and export volume realized 243.6 bn and 266.1bn USD respectively, which totaled 509.7 bn USD. In 2006, China’s import and export volume amounted to 1.7607 tn USD, with a yearly growth of 28.1% on average. Import and export reached 969.1 bn and 791.6 bn USD respectively, with a yearly growth of 29.5% and 26.6%, which advanced China’s worldwide ranking from the sixth place to the third.
--trade structure continued improving
In 2001, machinery and electronic product accounted for 44.6% of China’s total export volume, of which, 17.5% was high-technology products. Meanwhile, primary import products accounted for 9.9% of China’s import volume. In 2006, machinery and electronic products, as well as high-technology products took up 56.7% and 29% of China’s export volume respectively. The proportion of primary products import also went up to 23.6%
Foreign trade has made a tremendous contribution to China’s tax revenue. In 2001, China’s tariff and tax revenue at import totaled 249.2 bn USD, which rose 19.6% yearly and amounted to 610.4 bn USD in 2006. In addition, foreign trade also created more job opportunities and enhanced China’s national economic security. By the end of 2001, China’s foreign exchange reserves reached 212.2 bn USD, and in 2006, China soared to the World NO. 1 ranking with 1.0663 tn USD at the year end.
China has achieved great development widely-recognized all over the world, ranging from trade scale and structure to quality and profit. We attributed all these accomplishments to China’s entry into the WTO, since China’s economic system environment has changed for the better, both home and abroad; further development and expansion of China’s domestic enterprises as well as a rapid growth of the world economy. To be more specific, I think it includes several aspects as follows:
Firstly, world market continued opening to China’s products, which provides China’s foreign trade with an exterior system environment to develop at a high rate. After China’s entry into the WTO, foreign countries lessened their restrictions on China’s products and further opened their markets towards China, which provides more opportunities for Chinese enterprises to participate in international competition fairly. In addition, WTO’s dispute settlement mechanism played a very important role in reducing trade frictions between China and the international market, which, to some extent, lessened some negative influences from trade frictions.
Secondly, China’s constant innovation on foreign trade management mechanism laid a solid interior systematic ground for China’s fast growth in foreign trade. After entry into the WTO, China made a review of more than 2000 laws and regulations related to trade, and abolished more than 700 laws and regulations that contradicted the rules of WTO, meanwhile, China also made further improvements and changes to other responding amendments, related laws and regulations. In July, 2004, the amended “Foreign Trade Law of People’s Republic of China” was put into effect, which boosted enterprises’ potential to pursue and participate in foreign trade.
Thirdly, China’s enterprises continued to develop and expand. On one hand, China’s advantages in traditional industries, such as light and textile industries continue to be enhanced, and new prosperous industries like household appliances and information industry continued to rise. On the other hand, China’s private economy has become the main momentum of its foreign trade growth over the past few years. In 2006, China’s private enterprises contributed 31.3% of China’s export growth.
Additionally, the overall world trade and economic situation has been strong, which has provided China with good opportunities to develop and expand worldwide. In 2002, world economy and trade volume went up by 3% and 3.3% respectively, and the figures were expected to reach 5.1% and 8.9% in the year 2006. meanwhile, driven by the increase of world economy and trade volume, multinational enterprises enjoyed soaring profits; world stock market continued to boom and multinational investment also developed at a higher rate, which attained 27% and 29% in 2004 and 2005 respectively.
2. changing situation ahead
From 2007 to several years from now, China’s foreign trade development will face a series of challenges, and here are the three aspects that are worth our attentions and discussions:
(1) Over the past five years after China’s entry into WTO, China’s tariff has been down from 15.3% in the year 2001 to 9.8% as of today. On December 11, 2006, Regulations of the People’s Republic of China for the Administration of Foreign Banks was put into effect, which highlighted that China’s banking opening up had entered a new era. Among the 160 trade sections in WTO’s category, China has opened 102 in accordance with its promise to the world, which was much more than other developing countries.
(2) Since 1994, China’s trade surplus has continued to grow. In 2004, China’s trade surplus amounted to 32.1 bn USD, which went up by 2.2 times and reached 102 bn USD in 2005, and soared up to 177.5 bn USD in 2006. How should we consider China’s trade surplus? First of all, expansion of trade surplus is an outcome of economic globalization and international division of trade. Secondly, it also indicates the enhancement of China’s industrial competence, which is attributed to China’s reform and opening up. Additionally, the expansion of trade surplus will also increase foreign capital flow and strengthen China’s capability to resist exterior economic risks.
(3) Despite of the stable development of the world economy, we also need to consider those uncertain factors in a bid to get a better understanding of China’s foreign trade situation. Presently, the biggest problem of the world economy is imbalance, which mainly emerged in the U.S. huge trade deficit and tremendous trade surplus of Asia and OPEC (Organization of Arab Petroleum Exporting Countries). During the first 11 months of 2006, the U.S. trade deficit totaled 758.4 bn USD, a 7.9% increase over the previous year. Some measures should be taken to ease the imbalance in world economy before the problem gets worse.
In 2007, we should adopt comprehensive measures to transform China’s foreign trade growth mode, and to improve the quality of foreign investment as well as increase domestic enterprises’ investment in foreign countries in a bid to achieve a balance of payment, and to make new contributions to China’s national economy.
Comrades and friends, import and export enterprises and foreign traders have made great contribution to the achievements we have recently attained. Faced with new challenges in our mission, we hope that you make a stronger effort in the transformation of China’s foreign trade growth mode, and pay equal attention to both optimizing China’s export structure and boosting China’s import growth. Continue to work hard to maintain a stable and harmonious development for China’s foreign trade.
I wish a happy spring festival and all the best to all of you.
Thank you!
(Source: Network Center of MOFCOM)
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