China: Moving Towards the Next Millennium
Statement at the 30th International General Meeting (IGM)
of PBEC

Li Lanqing
Vice Premier of the State Council
People's Republic of China

(May 21. 1997, Manila)

Mr. Chairman,

Ladies and Gentlemen,

It is my great pleasure to attend the 30th International General Meeting of the Pacific Basin Economic Council (PBEC), which is at its 30th anniversary, and deliver a speech. Please allow me to extend on behalf of the Chinese government, our gratitude towards PBEC, the host of this IGM, for the kind invitation. And please accept our congratulations on the success of this conference.

The famous philosopher of ancient China, Confucius, said that one becomes mature at 30. With the efforts made by the member economies in the last 30 years, PBEC has become an influential business organization, and has made contributions to the economic development and social progress in the region. This region, the Pacific Basin, is characterized by its vast territory, large population, abundant resources, and huge market, and it is becoming a very important force on the global economic arena. As mankind will soon enter the 21st century, it is of great significance for us to gather here to discuss how to further increase the influence of PBEC, and promote the economic development of the Asia Pacific region.

China is a member of the Pacific Basin. It has been 18 years since China first embarked on the road of reform and opened to the outside world at the end of 1970. Ever since then, China's GDP has increased at an average annual growth rate of 9.9%, and the annual import and export growth rate has reached 16%. The target of quadrupling the GNP of the year 1980 by the end of this century was realized in 1995, 5 years ahead of schedule. In 1996, we, after taking into account the increase of 300 million people from the year 1980 to the end of this century, set our new plans to quadruple the per capita GNP of 1980 by the end of the century, basically eliminating poverty, and upgrading people's living standard to a fairly high level. In the first ten years of the next century, the target will be to double the GNP of the year 2000, improve the nation's economic and technological level by a large margin, and further upgrade people's living standard. All of these will lay a foundation for the realization of modernization and for developing itself to a moderately developed country by the mid term of the next century. Last year, the GDP of China continued to increase at a rather high speed, reaching 9.7%, and inflation rate fell from over 20 % to 6. 1 %. The import and export volume in 1996 amounted to US 289.9 billion, and it is also the second consecutive year for China to have a good harvest. There's still great potential for the future development of China's agriculture. As long as we increase the scientific & technological input and investment in the agriculture sector, we will be able to solve the feeding problem even though the population continues to grow. All the facts prove that China is capable of solving the feeding problem, developing its economy is a sustained, speedy, and healthy manor, and constantly improving its people's living standard.

While referring to the achievements we have made, we are fully aware of the difficulties and problems we face. We have a weak industrial and agricultural base, and the per capita GNP is still very low. Besides, we are also confronted with problems of irrational economic structure and low economic efficiency, and there are still 60 million people under the poverty line. It is our major task in the future to develop our economy and solve the above mentioned problems. Therefore, we will continue to implement the opening and reform policy initiated by Mr. Deng Xiaoping, accelerate the establislment of a socialist market economy, and further increase the opening to the outside world. Chinese people are confident for the future, and are working hard to construct a prosperous, democratic, and civilized modern country.

Mr. Chairman, China will resume its exercise of sovereignty over Hong Kong in just 40 days. It is an important historical event. The chief architect of the opening and reform policy, Mr. Deng Xiaoping, launched with the vision of a great statesman and his wisdom the concept of of one country, two systems" and "Hong Kong people governing Hong Kong." The concept is now being turned into reality. As the special administration region of China, Hong Kong will enjoy a high degree of autonomy. Now, the Hong Kong people have chosen Mr. Tung CheeHwa to be the first Chief Executive Officer of the Hong Kong SAR. He has won the trust and support of the Hong Kong people as well as all the Chinese people. What's more, almost all the Hong Kong civil servants, led by high level officials like the Chief Secretary Ms. Anson Chan, have been invited and employed to continue to work for the Hong Kong government. We are fully confident in the smooth transition of Hong Kong's sovereignty and the future prosperity and stability of Hong Kong. The existing Capitalist System and the present life style in Hong Kong will remain unchanged for a long time, and Hong Kong people will fully enjoy the rights stipulated in the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China. Its status as the center of international trade, banking and finance, transportation and tourism, a free port, information center, and independent tariff zone will not be tampered, but on the contrary will be further strengthened. We believe, under the leadership of Mr. Tung Chee-Hwa, the Hong Kong SAR government is fully capable of further developing Hong Kong.

The resolution made at this conference shows that PBEC supports the smooth handover of Hong Kong and it is confident in the future development of Hong Kong. Hong Kong is the bridge of communication and cooperation between China and the rest of the world. The Chinese government strongly supports the further development of Hong Kong. We welcome people from the business and financial sector to continue to develop their business in Hong

Kong. It is certain that Hong Kong will make new contributions to the prosperity and development of both the Asia Pacific region and world.

Ladies and gentleman, China attaches great importance to economic cooperation in the Pacific Basin and has actively participated in the various activities of PBEC. The reform China has been carrying out is not only a necessity for the development of its economy, but is also an important measure adopted to open itself to the world and actively integrate itself in the global economy and the economy of the Asia Pacific region in particular. Now the price of 85 % of China's agricultural products, 95% of consumption goods, and 80% of the production materials is determined by the demand and supply of the market, and resources are also allocated by the demand in the market. The reforms in areas of fiscal and budget, finance, foreign exchange, foreign trade, investment, pricing, enterprise management mechanism, and circulation system are being implemented and perfected. China will also continue to let special economic zones such as the Shanghai Pudong New Area, and other opened areas play an important role in China's economic development.

We have realized the free convertibility of RMB under the current account, which ensures the free repatriation of proceeds of foreign investors. We have reduced the overall tariff level from 35.9% to 23%, and it is still subject to further adjustment. By the year 2000, the tariff level will be reduced to the average level of that of developing countries. We will also learn useful experiences from other countries to accelerate the perfection of the legal system and safeguard the order of competition in the domestic market. We are now further enhancing the transparency of our policies and the efficiency of policy implementation. We will try to increase the share of foreign direct investment in infrastructure push forward the experiment on BOT and other investment modalities. We will gradually extend the coverage of such experiments. We encourage Chinese enterprises to actively carry out international trade, invest in other countries, and participate in various cooperation and exchanges. In a word, China is ready to continue to make its own efforts.

Ladies and gentlemen, after the conclusion of the cold war, the trend of multi-polarization is developing rapidly. We always hold the idea that all countries, no matter big or small, rich or poor, are equal members of the international community. Multi-polarization will be beneficial to the safeguarding of world peace and security, as well as the development and prosperity of the world economy. Cooperation on the basis of equality will benefit all, while friction and confrontation will do harm to everyone. It should be pointed out that without the mutual recognition of diversity and stress on flexibility, and without the adherence to the principle of equality, consultation-based consensus and volunteerism, the development of the Asia Pacific and world economy will be unattainable. It is to this very reason that China stands firm to oppose trade protectionism, and support the World Trade Organization to actively play its role in international economics and trade. It is also to this reason that China is ready to join the WTO. However, China, being a developing country, adheres to the principle that rights and obligations should be in balance, and can not conunit itself to what exceeds its capacity and ability. China needs the WTO, and the WTO also needs China. Without China, I am afraid to say that the World Trade Organization can not fully exert its influence.

Ladies and gentleman, the economy of the Pacific Basin is developing very fast, and the development of the economy of East Asia is even faster. According to statistics of the Asia Development Bank, the average growth rate of the economy of East Asia, from the end of the 1970's to 1990's reached 8% and this momentum of fast growth will continue. The next century will be the new century for the speedy development of the Asia Pacific region's economy. In the meantime, China's economy will continue to develop in a speedy manner. However, even if China realizes its development goal by the year 2010, China is still a developing country that is burdened with the task of developing its national economy and enhancing its people's living standard. China will stick to a domestic policy, and opening and reform policy. We have always devoted ourselves to the establishment of a peaceful and stable international environment, and hold the idea that nations should treat each other equally and friendly. Nations should resort to dialogues to resolve problems that exist or may come up. China's development will only make contributions to the maintenance of peace, prosperity and stability of the world, and will never pose a threat to other countries. Facts have proven and will continue to prove that China is the country of peace, stability, and development.

Ladies and gentlemen, I sincerely wish that PBEC will play a more constructive role in the Pacific Basin, and this region will make further progress. Let PBEC open its arms to embrace the new century with sincerity and cooperation.

Thank you.

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