Economy

China's development offers opportunities for world economy

(Xinhua)
Updated: 2011-01-27 14:42

Economic quagmire

In recent years, Chinese leaders have often taken large business delegations along on overseas visits to promote economic exchanges.

The latest examples included trade deals valued at more than $20 billion with India and Pakistan signed during Premier Wen Jiaobao's visit to the two countries in December, and the $20.9 billion in contracts with Spain, Germany and Britain during Vice Premier Li Keqiang's visit to those nations this month.

According to the World Trade Organization (WTO), in 2009 when global trade tumbled, US imports dropped 16.5 percent and those of the European Union fell by 14.5 percent. China was the only major economy that saw a rise in imports, which amounted to 2.8 percent.

Last year, China became the largest export market for Japan, Australia, the Republic of Korea, Brazil and South Africa. It was also the third largest export destination for the United States, the European Union and India.

Hard hit by the global financial crisis, the US economy remains thirsty for foreign investment to lift it out of its quagmire. Chinese entrepreneurs, used to accepting foreign investment, are learning to grow their money abroad.

Ahead of Hu's visit, Chinese business delegations attended an investment promotion event organized by US city administrations.

Easing restrictions

However, political barriers hinder their global expansion.

Cheng Lixin, vice president of telecommunications equipment manufacturer ZTE, last week said the company was unfairly treated in the US market because of misunderstandings with US politicians.

Major Chinese telecom equipment makers, like Huawei and ZTE, were frequently questioned by US investigators over concerns of potential threats to US information security, undermining major deals with companies such as Verizon and AT&T.

"Wherever you are from, as long as you abide by the law, you should receive equal opportunities," Cheng said.

Barriers not only exist in the US foreign investment policy, but also in export regulations. That restricts long-term bilateral trade, which the one-off purchases, though in hefty volume, do not assist.

"Whether China will buy more foreign products depends on what kind of products they offer. If they can ease the restrictions on exports of advanced technology, China surely will buy more," said Wang Jinbin, professor of economics at China's Renmin University.

The US government bans exports of a wide range of products and technology to China ranging from nuclear facilities, laser devices to aerospace technology, for reasons of "safeguarding national security".

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"The US has been adopting a discriminatory trade policy against China for years. Military supplies are prohibited, and even those for civilian use are under severe scrutiny," Chen Deming said.

In December, the US granted preferential trade rights to 164 countries, said Chen, but China, its third largest export base and with a huge market potential, was excluded.

Chen also pointed out in Washington that export restrictions are largely to blame for the trade imbalance between the two countries, saying the US accounted for 99 percent of China's surplus last year.

He said both sides need to further open trade policies.

"Hopefully our sincerity and efforts will be well responded to. Chinese importers are looking to freely purchase anything that people need," Chen said.