Chen is of the same age as the PRC. Over the past 60 years, he has witnessed China's great journey from construction behind closed doors to opening its doors and achieving an economic boom by utilizing domestic and overseas markets and resources. Chen firmly believes that China must take a commercial development road with Chinese characteristics, change development modes and optimize structural adjustment to fully achieve the transformation from a trade giant to a trade power.
"Maintaining export volume to guarantee China's share in the international market"
To cope with the severe foreign trade situation, Chen's work schedule is extremely busy. He returned from overseas at the end of August then rushed to India for a small-scale ministerial meeting of World Trade Organization (WTO) at the beginning of September. This is the second meeting of that kind he has attended, following last year's Geneva Conference.
Chen clearly recalls last year's exceptionally difficult negotiations. "We negotiated for a total of 150 hours in 10 days. It was the first time that China joined the WTO negotiations at the core level." In such a crucial period of coping with the international financial crisis why did Chen, who is already overburdened, make time to attend this type of international negotiation?
"Multilateral trading system negotiations play an important role in promoting the development of global trade and economy. Once the Doha talks are concluded, the global tariff will be further reduced, hopefully bringing trade flows worth 150 billion USD. This is beneficial to the early recovery of the world economy,” said Chen.
He added, “Objectively speaking, many WTO rules were formulated with the interests of the developed countries. Having joined WTO, China is entitled to participate in the formulation of rules to safeguard its interests and those of most developing countries."
The increasingly important role China plays in WTO negotiations is a concrete manifestation of the country’s development and strength over the past 60 years since the founding of the PRC, and in particular over the past 30 years of reform and opening-up. In 2008, China's total export and import volume stood at 2.56 trillion USD, ranking third in the world and 15 times more than the combined total of the 30 year period from 1949 to 1978.
"During the early days of New China, China practiced a planned economic system and had only a few dozen foreign trade enterprises with nationwide operating rights. Since reform and opening-up, China has gradually established a socialist market economic system and at present there are already 760,000 foreign trade enterprises across China," said Chen.
What does the rapid growth of foreign trade mean to China? Chen expressed his understanding in a unique way.
"Transnational trade development has a basic economic principle: each country has its own comparative advantage. China has a large population but limited resources so it cannot develop rapidly by relying only on its domestic market. China must expand to the wider international market. Foreign exchange earned by exporting large volumes of products should be used to import some resources that China is relatively in short of, so as to promote the rapid development of the domestic economy."
China's opening-up is changing the country as well as influencing the world. "After entering the WTO, China has provided the entire world with a market worth nearly five trillion USD. This year in particular, China has organized groups to visit Europe and the US for investment and trade cooperation many times, which has greatly helped these countries to ease their pressure amid the financial crisis," Chen said.
To cope with the pressure brought about by the decline in overseas demand under the financial crisis, since the beginning of 2009, the Ministry of Commerce has formulated various measures to stimulate exports, strengthen its services for local governments and enterprises and help enterprises cope with international trade friction. "We must ensure that China will not lose its share in the international market," said Chen firmly.
He added, "Trade growth must be sustained, but the priority should be restructuring. China needs to transform the foreign trade growth model and rely more on increasing the added values of products as to occupy the international high-end market. At the same time, service trade should also be considered an important part of China's foreign trade development in the future."
"It is more important to enhance the quality of foreign investment than stabilize its quantity."
Foreign investment is a powerful force driving the rapid development of China's foreign trade. In this regard, Chen Deming has personal experience. In 1994, the Chinese and Singaporean governments established the China-Singapore Suzhou Industrial Park (CSSIP). Chen has worked in Suzhou since 1997 and made enormous efforts to develop both the CSSIP and the local economy, creating the well-known "Suzhou model".
He said, "Attracting foreign investment was just one of the objectives for establishing the CSSIP; it was more important to gain experience of development zone construction and management. For example, we learnt a lot from Singapore's investor-friendly one-stop investment approval service."
The "Suzhou model" is an epitome of China's successful utilization of foreign investment. Since reform and opening-up, new foreign investment has been introduced in successive waves from China's coastal areas to inland areas and from eastern regions to central and western regions. From hardware to software and from quantity to quality, the structure of foreign investment in China is constantly improving.
There were no foreign-funded enterprises right after New China was founded. Nowadays, China has been the largest foreign investment destination among developing countries for 17 consecutive years, and has become the world’s No 2 in terms of the attraction of foreign direct investment (FDI).
The introduction of foreign investment has significantly enhanced China's manufacturing capacity. "There are a wide variety of goods in Chinese shopping malls. The brands I saw overseas several decades ago are now available in China and many of these branded products are labeled 'made in China'. Over 50 percent of goods exported from China are produced in factories funded by foreign enterprises," said Chen.
Affected by the global financial crisis, foreign investment in China has dropped since the beginning of 2009. The Ministry of Commerce has issued policy measures to improve services and the investment environment to stabilize the scale of foreign investment in China.
"China enjoys a sound investment environment and favorable labor resources. With a population of 1.3 billion at the stage of urbanization and industrialization, China has a huge potential market, particularly in coastal areas with a well-developed infrastructure. This is why China is so attractive." Chen is confident about the prospects for attracting foreign investment.
However, Chen also said frankly, "China's manufacturing capacity of general labor-intensive products already has a relative surplus. More importance should be attached to adjusting the structure and enhancing the level of foreign investment, guiding foreign investors to develop with China in higher-end fields."
As well as attracting foreign investment, China has also accelerated its pace of "going global." Historical experience shows that most developed countries first undergo the "attracting foreign investment" process then the "going global" process. At present, with per capita GDP exceeding 3,000 USD and sufficient foreign exchange reserves, China has the economic power and a realistic need to "go global".
"For example, if Chinese enterprises can access international marketing networks through mergers and acquisitions, they can accelerate the promotion of their brands allover the world; by establishing research and development centers overseas, they can improve the design capacity of China's manufacturing sector," said Chen.
"To expand consumption, we must focus on constructing a circulation network."
The Ministry of Commerce office buildings are located in Beijing’s busiest district opposite the renowned Wangfujing Commercial District, which houses shopping malls, department stores and all kinds of franchised shops, along with bustling crowds of tourists and shoppers.
Before reform and opening-up, Chen Deming, like many common Chinese people, had to queue up at the sparse network of State-run stores with monthly food, gas and other coupons rationed by the government to purchase daily necessities.
From simply-decorated State-run stores to stylish large shopping malls, in the 60 years since the founding of the People’s Republic of China (PRC), the commodity circulation system has shifted from planned to market-oriented. As commercial and trade circulation continues to thrive day by day, China's domestic market continues to expand and consumption structure continues to improve.
At present, old and new commercial patterns including convenience stores, supermarkets, department stores, specialist shops, shopping malls and online shops have all appeared in China. In 2008, China's total retail sales of consumer goods exceeded 10 trillion yuan, 392 times of the 27.68 billion in 1952.
Along with the rapid commercial development in urban areas, circulation in rural areas has also changed dramatically. "At present, chain 'rural stores' have been set up in around half of China's 600,000-odd administrative villages. In the first half of 2009, the year-on-year growth rate of total retail sales of consumer goods in rural areas exceeded that of urban areas for the first time," said Chen.
In order to adapt to the new changes in China's economic situation, in 2003 the Ministry of Commerce was established, with the original intention of achieving the integration of domestic and foreign trade.
Under Chen's personal direction, a special space for the domestic sale of commodities originally produced for export was set up at the Spring Session of the Canton Fair, and domestic retailers were invited to the Fair to purchase for the first time.
To alleviate the impact caused by the decline in overseas market demand on economic growth, this year the Ministry of Commerce launched a series of measures including "home appliances and vehicles going to the countryside" and "trade-ins", to stimulate circulation and expand urban and rural consumption. "So far, these measures have achieved remarkable success in stimulating consumption in the short term. The supportive role of consumption for the national economy is very clear."
However, Chen also pointed out that, "With the passage of time, the marginal effectiveness of the policies is likely to decrease. So in the long run, in order to expand consumption and invigorate circulation, we must still focus on constructing a circulation network, and in particular a logistics network in rural areas." Talking about the development prospects of China's commercial work over the next five to ten years, Chen said, "We should always remember that China has 1.3 billion people and this huge manpower needs employment, and that although we are large in 'quantity', we are still low in 'quality'. The task of changing the mode of development and raising the level of development remains arduous, and we need to redouble our efforts in future."
By People's Daily Online
Foreign investment is a powerful force driving the rapid development of China's foreign trade. In this regard, Chen Deming has personal experience. In 1994, the Chinese and Singaporean governments established the China-Singapore Suzhou Industrial Park (CSSIP). Chen has worked in Suzhou since 1997 and made enormous efforts to develop both the CSSIP and the local economy, creating the well-known "Suzhou model".
He said, "Attracting foreign investment was just one of the objectives for establishing the CSSIP; it was more important to gain experience of development zone construction and management. For example, we learnt a lot from Singapore's investor-friendly one-stop investment approval service."
The "Suzhou model" is an epitome of China's successful utilization of foreign investment. Since reform and opening-up, new foreign investment has been introduced in successive waves from China's coastal areas to inland areas and from eastern regions to central and western regions. From hardware to software and from quantity to quality, the structure of foreign investment in China is constantly improving.
There were no foreign-funded enterprises right after New China was founded. Nowadays, China has been the largest foreign investment destination among developing countries for 17 consecutive years, and has become the world’s No 2 in terms of the attraction of foreign direct investment (FDI).
The introduction of foreign investment has significantly enhanced China's manufacturing capacity. "There are a wide variety of goods in Chinese shopping malls. The brands I saw overseas several decades ago are now available in China and many of these branded products are labeled 'made in China'. Over 50 percent of goods exported from China are produced in factories funded by foreign enterprises," said Chen.
Affected by the global financial crisis, foreign investment in China has dropped since the beginning of 2009. The Ministry of Commerce has issued policy measures to improve services and the investment environment to stabilize the scale of foreign investment in China.
"China enjoys a sound investment environment and favorable labor resources. With a population of 1.3 billion at the stage of urbanization and industrialization, China has a huge potential market, particularly in coastal areas with a well-developed infrastructure. This is why China is so attractive." Chen is confident about the prospects for attracting foreign investment.
However, Chen also said frankly, "China's manufacturing capacity of general labor-intensive products already has a relative surplus. More importance should be attached to adjusting the structure and enhancing the level of foreign investment, guiding foreign investors to develop with China in higher-end fields."
As well as attracting foreign investment, China has also accelerated its pace of "going global." Historical experience shows that most developed countries first undergo the "attracting foreign investment" process then the "going global" process. At present, with per capita GDP exceeding 3,000 USD and sufficient foreign exchange reserves, China has the economic power and a realistic need to "go global".
"For example, if Chinese enterprises can access international marketing networks through mergers and acquisitions, they can accelerate the promotion of their brands allover the world; by establishing research and development centers overseas, they can improve the design capacity of China's manufacturing sector," said Chen.
"To expand consumption, we must focus on constructing a circulation network."
The Ministry of Commerce office buildings are located in Beijing’s busiest district opposite the renowned Wangfujing Commercial District, which houses shopping malls, department stores and all kinds of franchised shops, along with bustling crowds of tourists and shoppers.
Before reform and opening-up, Chen Deming, like many common Chinese people, had to queue up at the sparse network of State-run stores with monthly food, gas and other coupons rationed by the government to purchase daily necessities.
From simply-decorated State-run stores to stylish large shopping malls, in the 60 years since the founding of the People’s Republic of China (PRC), the commodity circulation system has shifted from planned to market-oriented. As commercial and trade circulation continues to thrive day by day, China's domestic market continues to expand and consumption structure continues to improve.
At present, old and new commercial patterns including convenience stores, supermarkets, department stores, specialist shops, shopping malls and online shops have all appeared in China. In 2008, China's total retail sales of consumer goods exceeded 10 trillion yuan, 392 times of the 27.68 billion in 1952.
Along with the rapid commercial development in urban areas, circulation in rural areas has also changed dramatically. "At present, chain 'rural stores' have been set up in around half of China's 600,000-odd administrative villages. In the first half of 2009, the year-on-year growth rate of total retail sales of consumer goods in rural areas exceeded that of urban areas for the first time," said Chen.
In order to adapt to the new changes in China's economic situation, in 2003 the Ministry of Commerce was established, with the original intention of achieving the integration of domestic and foreign trade.
Under Chen's personal direction, a special space for the domestic sale of commodities originally produced for export was set up at the Spring Session of the Canton Fair, and domestic retailers were invited to the Fair to purchase for the first time.
To alleviate the impact caused by the decline in overseas market demand on economic growth, this year the Ministry of Commerce launched a series of measures including "home appliances and vehicles going to the countryside" and "trade-ins", to stimulate circulation and expand urban and rural consumption. "So far, these measures have achieved remarkable success in stimulating consumption in the short term. The supportive role of consumption for the national economy is very clear."
However, Chen also pointed out that, "With the passage of time, the marginal effectiveness of the policies is likely to decrease. So in the long run, in order to expand consumption and invigorate circulation, we must still focus on constructing a circulation network, and in particular a logistics network in rural areas." Talking about the development prospects of China's commercial work over the next five to ten years, Chen said, "We should always remember that China has 1.3 billion people and this huge manpower needs employment, and that although we are large in 'quantity', we are still low in 'quality'. The task of changing the mode of development and raising the level of development remains arduous, and we need to redouble our efforts in future."
By People's Daily Online
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