V.Sino-US Economic and Trade Co-operation
Shows Vast Vistas
Lasting economic and trade co-operation between China and the United
States requires sustainable and balanced growth in bilateral trade. The
Chinese side has always paid great attention to the need and taken active
measures to increase imports from the United States. China's market is
open to US goods and services. Over the past years, China has purchased a
great amount of US products. Investment sectors in China for US
businesses have widened and the scale of US investment in the country has
been growing continuously. All these have brought US enterprises huge
profits.
-- Trade in commodities: Between 1979 and 1996, China bought 69.476
million tons, or 11.62 billion US dollars worth, of wheat from the United
States. Now, China is the largest buyer of US wheat. In the period, China
also bought 46.243 million tons, or 9.56 billion US dollars worth, of
chemical fertilizers and 308 aircraft worth 8.72 billion US dollars from
the United States.
-- US investment in China: US investment in China has been increasing
rapidly. Among the top-500 US enterprises listed by the Fortune magazine,
more than 100 have so far invested in various fields in China.
-- Banking and insurance: Five US banks have altogether set up eight
branches in China. Three out of the six foreign insurers operating in
China are US companies, respectively set up by American International
Assurance Co. and the AIU Insurance Co. -- both subsidiaries of American
International Group Inc. (AIG).
-- Shipping services: APL (China) and Sealand (China) are the ear"iliest
wholly foreign-owned shipping companies to start operating in China,
where they already have nine subsidiaries at present.
-- Retailing: US retailers, including the renowned Walmart Co., have also
entered the Chinese market.
In order to open China's market wider, China and the United States signed
the Memorandum of Understanding Between the Government of the People's
Republic of China and the Government of the United States of America
Concerning Market Access in October 1992. In the following years, China
has made earnest efforts to fulfill the various obligations as stipulated
in the memorandum, and has taken a series of active measures in line with
its reforms and opening drive. Take sanitary and phyto-sanitary
quarantine as an example: After joint research and analyses by experts
from both countries, China not only abolished its import control over
apples from the Washington State and wheat from California, but has
signed with the United States new quarantine protocols on such imports as
pigs, horses, dogs and genetic materials. In April 1994, China and the
United States reached an agreement on hygiene quarantine provisions on
cherry imports from the Washington State and imports of relevant species
of apples grown in Idaho and Oregon. All these have helped further
development of Sino-US economic and trade ties.
China is now in a period of rapid economic growth, estimated to average
at least 8% a year in the run-up to 2000 and maintain above 7% in the
first decade of the 21st century -- promising broad market potentials. An
example is the market demand for energy and communications construction.
In the next five years, China will increase its installed
power-generating capacity by 80,000 megawatts and build
16,000-kilometres-long new railways plus another 2,800 kilometres of
freeways. It also plans to build another 150,000 kilometres of optic
fibre cables and increase telephone switching capacity by 70-80 million
lines. China will continue to introduce overseas capital, technologies
and equipment in an active, rational and effective way. China's imports
increased to 138.8 billion US dollars in 1996 from 10.9 billion US
dollars in 1978, representing an annual average growth of 15.2%. Between
1997 and 2000, cumulative imports to China will top 700 billion US
dollars. China's economic growth will offer a massive market for world
trade and investment. Back in 1994, the United States' Department of
Commerce had put China on the top of ``top-10 emerging markets,''
reflecting its high evaluation on potentials of the Chinese market. The
Chinese market is opening wider while the competition is also getting
tougher. We are willing to see that US enterprises win more chances to
compete on the Chinese market.
Chinese exports to the United States are mainly labour-intensive
products. These products pose no threat to the production of US
enterprises. An economist from the US-based Institute of International
Economics was quoted by a Washington Post story in June 1996 as saying:
It is true that the United States imports more and more toys and shoes
from China, but these industries have almost vanished in the United
States. Clyde Prestowitz, president of the Economic Strategy Institute of
the United States, pointed out in an article in a December 1996 issue of
the US News & World Report that China's exports to the United States are
large in industries where the United States does not make things anymore.
Labour-intensive Chinese exports to the United States will neither affect
industrial production and employment in the United States, nor affect
international market shares for US products. Instead, they are beneficial
complements to the economic structure of the United States and can help
the United States to readjust its economic structure.
Paralleling with the gradual deepening of its economic reforms in recent
years, China has increasingly amplified its foreign-related legal system,
steadily improved its trade and investment environment and enforced the
intellectual property rights protection system. On the issue of trade
system transparency, China has sorted out and publicized all management
documents that used to be deemed confidential and publicly abolished 744
of them. In 1993, the Bulletin of the Ministry of Foreign Trade and
Economic Co-operation of the People's Republic of China was launched to
exclusively carry laws and regulations on the management of foreign trade
and economic co-operation. Import restriction was further eased and by
the end of 1995, China had rescinded import licensing and quota control
over 826 tariff lines. Since the past year, China has again taken a
series of imortant measures in improving its foreign-related economic
regime and policies as follows:
-- A massive cut in the import tariffs of more than 4,000 tariff lines
was introduced in April 1996, bringing average tariff from 35.3% down to
23%. It has also pledged to further lower overall tariff rate to 15% by
the year 2000.
-- China has taken active steps to phase out non-tariff measures. Only
384 items of imports are subject to the measures today as compared with
1,247 before. China has also set forth a timetable to further lift such
measures.
-- In 1996, the Chinese currency Renminbi became freely convertible under
the current account, enabling foreign-invested companies to be free in
international settlement and transfer under the current account.
-- China has started, on a trial basis, to open its market to foreign
investors in such service sectors as domestic retailing, finance,
insurance and foreign trade. Some foreign companies and financial
institutions have already entered these markets. In the Pudong New Area
of Shanghai, some foreign banks have begun handling Renminbi business.
By the year 2000, China will have initially established a system of
socialist market economy and built up a unified and standard
foreign-related economic regime, which will create better conditions for
the world's business communities including those from the United States
to develop economic and trade co-operation with China.
Equality and mutual benefit are the cardinal principle of international
trade. It is normal that countries will seek to protect their own
interests, which may lead to trade frictions and disputes. The key lies
in how to cope with these issues correctly in a cool and wise way. China
has always advocated that parties involved should adhere to the principle
of mutual respect and settle bilateral or multilateral trade disputes,
reasonably, through friendly discussions. Having experienced a winding
course in their bilateral relations, China and the United States should
cherish the mainstream in the two-way trade development, look to the
future and face the reality with a constructive attitude. Bullying,
forcing unacceptable demands on the other through constant threats of
trade sanctions and even actually imposing sanctions will not help solve
problems but cause damage to the interests of both sides.
It is China's sincere wish and also to the interest of the United States
to expand bilateral trade and economic co-operation. Both governments are
obliged to provide a sound and stable climate for the long-term
development of the bilateral trade and economic co-operation. It is their
duty to substantially improve bilateral trade ties and lay a solid
foundation for developing and balancing trade between the two countries.
We welcome the business communities from the United States to play an
active role in fair competition on the Chinese market. We wish the US
Government will take forcible measures to fuel stronger growth in two-way
trade and economic co-operation.
We are happy to note that, when they met on the sideline of the summit
meeting of the Asia-Pacific Economic Co-operation (APEC) forum last
November in Manila, the Philippines, Chinese President Jiang Zemin and US
President Bill Clinton reached a wide range of consensus on the
comprehensive, healthy and stable development in bilateral ties.
Following the summit, three Sino-US joint committees on commerce and
trade, economy and science and technology were convened in succession.
The active and pragmatic attitude as reflected in the meetings helped
promote the development in bilateral trade ties, reinforce exchange and
co-operation, enhance mutual understanding and inject new vigour into
bilateral ties. Looking to the future, China has confidence in the
development of Sino-US economic and trade co-operation. China and the
United States have every reason and should strive together to open new
and better prospects in their trade ties. It serves the fundamental
interests of both peoples.
From site: http://www.hellomandarin.net
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