November 6, 2001	Tuesday	Shaba’an 19, 1422

BANDAR SERI BEGAWAN, Nov 5: China’s Premier Zhu Rongji on Monday gave a bright outlook for China’s economy, saying increasing foreign investment would partly offset the decline in exports arising from the global economic downturn.

Actual foreign direct investment in China increased by 21 percent from January to September, compared to the same period last year, Zhu said on the sidelines of an East Asian summit here.

Next year there will be even more foreign investment to China. I believe that will partly lessen the impact of the decrease in exports, Zhu said.

The premier said the real impact of the September 11 terrorist attacks in the United States and the slowing US economy would not be felt by China until next year.

Now we’re only seeing a little bit of the influence, he said.

But Zhu voiced confidence the Chinese economy can weather the global economic slowdown.

Please believe me, we have ways. Increasing domestic demand and developing our citizens’ economy. And one more thing, China is now the world’s safest, most stable place for investment, Zhu told reporters.

Asked about Southeast Asian concerns that China was drawing foreign investment from its neighbors and becoming increasing economically competitive as it prepares to enter the World Trade Organization (WTO), Zhu tried to alleviate fears.

My job is to develop China’s economy well. It will contribute to other countries and can guarantee their prosperity and stability, Zhu said.

Only after we develop (our economy) well will we have the ability to conduct (trade) exchanges with them, Zhu said. Developing the Chinese economy well will be an encouragement to this region.

He added a prosperous China would be able to buy more products from its neighbors, and Chinese people would be able to travel through Asia and spend money there.

Southeast Asia is facing increasing pressure as China — with its market of 1.3 billion people, cheap labor and relatively abundant land supply — is becoming more attractive to foreign investors.

Its entry to the WTO will help it lure more investment, as it implements trade liberalization policies and lifts investment restrictions.

South Korea’s top economic official warned last month China will take over many of his export markets over the next decade.

We will witness a great China shock over the next three years, or 10 years at the most, Economy and Finance Minister Jin Nyum told business leaders.

We are already feeling the impact but the future shock will be much greater, he said, adding China will turn into the world’s manufacturing plant, sucking all manufacturing facilities into it like a black hole. Chinese exports also have become more competitive as massive economic reforms have made producers more efficient, analysts said.

For example, China has been taking a larger market share of imports to the US from the Pacific Rim region, while Southeast Asia has seen its market share decline.

China’s exports, as a share of the total US imports from the region, increased from 17.6 per cent in 1996 to 24 per cent last year, according to a western economist. Southeast Asia’s export share fell from 23 per cent to 20 per cent in the same period.—AFP