HONG KONG, Dec 7: China’s imminent World Trade Organization entry will see the country emerge even stronger than it has been over the past decade, incoming WTO chief Supachai Panitchpakdi said on Friday.
Supachai, speaking at the Foreign Correspondents’ Club in Hong Kong, discounted predictions that WTO accession could lead to the collapse of China’s communist government.
He was responding to a question about a book — Gordon G. Chang’s The Coming Collapse of China which predicts WTO entry will help bring about the fall of the communist government.
By being subject to (WTO membership), of course there will be pressure, said Supachai, who will become WTO director general in September next year.
If China would have to go its own way alone, single-handedly, it would be very difficult and I think the doomsday predictions would materialise.
But, under the WTO reforms, China’s emergence in the international trade arena will be even more pronounced than in the last decade.
WTO entry would force Beijing to make reforms while allowing it to raise enough funds to keep the country stable.
Supachai said this would unleash (the) tremendous potential of China to compete, to mobilise more funds, to mobilise more revenues so much so that China will be able to support, to finance the kind of social security system that China needs to finance.
China cannot keep on subsidising agriculture, automotive industries, steel or cement because China will need all those funds put into the development of the western areas (of the country), he said.
It would not be able to mobilise enough funds without privatisation and market reforms.
He said Beijing would attract more foreign direct investment, which could increase to up to $120 billion within the next few years from the current average of 40 billion.
The country’s gross domestic product expanded at an average of over 10 per cent over the 1990-2000 period. It has projected growth of 7.0 per cent for next year.
Supachai was launching a book entitled China and the WTO: Changing China, Changing World Trade, which he co-authored with BusinessWeek magazine journalist Mark L. Clifford.
China’s entry into the World Trade Organization (WTO) will provide foreign firms with more opportunities to take part in disposing of the country’s huge pool of bad loans, a senior Chinese official said Friday.
China’s joining the WTO will bring even better opportunities on the whole of having foreign companies take part in disposing of the bad assets, said Sun Xiaoxia, deputy director-general of the finance ministry’s financial department.
The amount of bad assets non-performing loans (NPLs)at China’s four major commercial state-owned banks amount to 26.2 per cent of all loans according to the central bank is huge and poses a serious problem to China’s financial system, Sun said.
We encourage and welcome domestic and foreign investors to take an active part and join our financial asset management companies in disposing of bad assets, Sun in a prepared speech delivered to the Hong Kong 2001 China Investment Policy Seminar.
The disposal of bad financial assets by China’s four financial asset management companies has been been progressing well,” she said.
Initial figures show that as of the end of September 2001, the four financial asset management companies have disposed of bad assets which have an original worth of $11.5 billion, and have recovered assets which are worth 40.3 billion yuan, of which 23.3 billion yuan are in cash, Sun said.
The percentage of assets recovery is as high as 42.07 per cent, while the percentage of cash recovery is 24.32 per cent, she said.
Last week, Huarong Asset Management Corp. announced the sale of $1.3 billion of NPLs to a consortium of investment banks at a 79 per cent discount.
The sale to the consortium led by Morgan Stanley and including Lehman Brothers, Salomon Smith Barney, Zhongjin Fengde and KTH Capital Management Ltd. was the result of China’s first ever portfolio sale of non-performing loans held on November 12.—AFP