Dr. Ludolf v. Wartenberg, director-general of the Federation of German Industries (BDI) and a member of the Presidential Board, has asserted that "China is evolving into a key economy, of vital importance in Asia as well as on a broader, international front."

In an article entitled "Great Opportunities", obtained by Xinhua when asking for an interview, the BDI chief listed sound economic policy, growing prosperity and regional and international integration as the three main reasons for projecting China's increased importance.

First, since the late 1970s, China's economic policy has been marked by a high degree of determination, stability, and orientation towards the market economy.

In contrast to other developing countries, China had a plan from the outset, which it put into action with great self-confidence, Wartenberg said, adding that most importantly, China did not focus solely on the labor-intensive sector: the government wanted to excel in all areas.

To this end, China invested, and indeed still invests, huge sums of money in education and research and development (R&D).

He noted that in terms of R&D spending, China nowadays ranks third in the world, only behind the United States and Japan. He said a long tradition of encouraging education in China has helped in that respect.

Moreover, China has paid great attention to economic reforms and made great efforts to build up institutions needed for a functional market economy.

Wartenberg's second argument is that the Chinese economy is doing very well on the whole as a nine-percent growth for more than two decades has stunned onlookers and resulted in a growing prosperity.

Foreign trade is increasing by two-digit figures, making China one of the world's largest export nations.

China has been the number one destination for direct foreign

investment for many years. In this sector, Wartenberg said, China should be given credit for its comprehensive reforms.

Thirdly, Wartenberg said China's integration into the outside world -- both at a regional and international level -- has enhanced its importance.

He said China fought hard to become a new member of the World Trade Organization and acceded under very strict terms as it agreed to substantially lower tariffs, to abolish trade restrictions, and to open up most sectors to foreign companies.

It was "a hard task and China has to be given credit for fulfilling the majority of its WTO accession obligations. "

"No wonder China's foreign trade is booming!" he said.

Wartenberg said that China is also seeking closer relationships with its direct neighbors.

It has closed a deal with the ten neighboring Asian nations, aiming to have free trade from 2010 onwards, and is also negotiating accelerated free trade agreements with several other countries, aiming for a liberalization before 2010.

"China's neighboring countries profit from such free trade agreements, as do German companies for whom such deals open up new investment opportunities in Asia," the BDI chief said, adding that much is to be gained from cooperating with China.

Wartenberg expressed his understanding for the slow progress in some areas of China's reform due to the size of the task and the difficult framework involved.

As for China's huge demand for raw materials, he said there is of course nothing wrong with China entering the international raw materials markets as a new and powerful buyer, but export restrictions for certain raw materials cannot be tolerated, nor can indirect subsidies for Chinese buyers of raw materials.

On account of its powerful position as a buyer, China has a dramatic influence on the worldwide supply of raw materials, but at the same time it is also dependent on it, he said, warning that China should therefore be careful not to artificially increase the price of raw materials more, or to keep them in short supply by competition-distorting measures.

Source: Xinhua