Others News
- Trade and investment blaze ahead
Date: 20-Sep-2007 Sources: (People's Daily)
In the past four years, the nation has become the world's third-largest trader, the 13th-biggest foreign investor and a major target for overseas funds.
Boosted by steady global economic growth and fast expansion and reform of its trade system, China's imports and exports have seen robust development since the 16th National Congress of the Communist Party of China convened in 2002, the National Bureau of Statistics (NBS) said yesterday.
China's foreign trade expanded nearly 30 percent on average in the past four years, with exports increasing 31.3 percent annually and imports increasing 28 percent annually. This has brought the country's trade volume in goods to $1.76 trillion last year from $620.8 billion in 2002.
In 2006, exports rose by 27 percent year-on-year to $969 billion, while imports climbed 20 percent to $791.6 billion. The total trade volume grew 23.8 percent from a year earlier.
According to the World Trade Organization, China went from being the fifth-largest trader by volume in 2002 to the third-largest in 2004.
The nation has encouraged companies to climb the industrial chain since 2002, by improving exports in hi-tech products, cultivating brands and strengthening research and development. This policy has helped Chinese firms sharpen their competitive edge in the household electronic equipment and information sector. Electronic and machinery as well as hi-tech products are gradually replacing labor-intensive light industrial goods to become China's major exports.
Bilateral trade
Meanwhile, the nation is actively involved in regional economic cooperation and bilateral trade.
China has signed free trade agreements (FTAs) with the ASEAN, Chile and Pakistan. It is negotiating with another six economies, including Iceland, New Zealand and Singapore, and doing a feasibility study on similar agreements with India, South Korea and Peru, according to the NBS.
The country's optimized investment environment has continued to attract strong interest from foreign investors in the past four years.
In 2002, foreign direct investment (FDI) in China exceeded $50 billion for the first time and has increased steadily since. The figure in China's non-financial sectors was $63 billion last year.
China had accumulated $703.9 billion in actual foreign direct investment by the end of last year.
Between 2003 and 2006, $29.3 billion of foreign capital poured into manufacturing in the sectors of communications equipment, computers and electronics. But foreign IT giants are looking beyond China as a manufacturing base and setting up research and development centers in the country.
Foreign-invested companies have become part of the Chinese economy, and play the most active part in the country as it faces up to global competition, said Wang Zhile, director of the Multinational Enterprise Research Center under the Ministry of Commerce.
Foreign-invested companies contribute a third of China's industrial output, a fifth of the tax revenue and 20 million jobs.
With new regulations on mergers and acquisitions of Chinese businesses by foreign investors, the practice has become an important way to attract foreign investment and help domestic firms access advanced technologies and management expertise.
Branching out
Chinese companies have made remarkable progress over the past four years in overseas investment since the government began encouraging qualified firms to do so.
China's outward investment is a 'win-win' strategy, as the capital flow not only creates jobs at the investment destination and boosts the local economy, but also helps Chinese firms to diversify the origin of their products and thus avoid trade conflicts, the NBS said.
By the end of 2006 there were 30,000 Chinese-funded companies in 160 countries and regions with an accumulated foreign investment of $75 billion.
Chen Lin, deputy director of the commerce ministry's foreign economic cooperation department, predicted China's outward investment will speed up as the country's economic growth remains steady and foreign investment is high.
'We expected the country's outward investment to reach $60 billion during the 11th Five-Year Plan period (2006-10). Now we believe the actual figure will be much higher than that,' he said.
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