In this crucial period of coping with the global financial crisis, Chen Deming, who has been engaged as commerce minister for just over a year, is facing a tough battle. On one hand, China must stabilize overseas demand to ensure that international market share is not lost; on the other hand, it must expand domestic demand to stimulate consumption.
Chen is of the same age as the PRC. Over the past 60 years, he has witnessed China's great journey from construction behind closed doors to opening its doors and achieving an economic boom by utilizing domestic and overseas markets and resources. Chen firmly believes that China must take a commercial development road with Chinese characteristics, change development modes and optimize structural adjustment to fully achieve the transformation from a trade giant to a trade power.
"Maintaining export volume to guarantee China's share in the international market"
Chen Deming, Minister of CommerceTo cope with the severe foreign trade situation, Chen's work schedule is extremely busy. He returned from overseas at the end of August then rushed to India for a small-scale ministerial meeting of World Trade Organization (WTO) at the beginning of September. This is the second meeting of that kind he has attended, following last year's Geneva Conference.
Chen clearly recalls last year's exceptionally difficult negotiations. "We negotiated for a total of 150 hours in 10 days. It was the first time that China joined the WTO negotiations at the core level." In such a crucial period of coping with the international financial crisis why did Chen, who is already overburdened, make time to attend this type of international negotiation?
"Multilateral trading system negotiations play an important role in promoting the development of global trade and economy. Once the Doha talks are concluded, the global tariff will be further reduced, hopefully bringing trade flows worth 150 billion USD. This is beneficial to the early recovery of the world economy,” said Chen.
He added, “Objectively speaking, many WTO rules were formulated with the interests of the developed countries. Having joined WTO, China is entitled to participate in the formulation of rules to safeguard its interests and those of most developing countries."
The increasingly important role China plays in WTO negotiations is a concrete manifestation of the country’s development and strength over the past 60 years since the founding of the PRC, and in particular over the past 30 years of reform and opening-up. In 2008, China's total export and import volume stood at 2.56 trillion USD, ranking third in the world and 15 times more than the combined total of the 30 year period from 1949 to 1978.
"During the early days of New China, China practiced a planned economic system and had only a few dozen foreign trade enterprises with nationwide operating rights. Since reform and opening-up, China has gradually established a socialist market economic system and at present there are already 760,000 foreign trade enterprises across China," said Chen.
What does the rapid growth of foreign trade mean to China? Chen expressed his understanding in a unique way.
"Transnational trade development has a basic economic principle: each country has its own comparative advantage. China has a large population but limited resources so it cannot develop rapidly by relying only on its domestic market. China must expand to the wider international market. Foreign exchange earned by exporting large volumes of products should be used to import some resources that China is relatively in short of, so as to promote the rapid development of the domestic economy."
China's opening-up is changing the country as well as influencing the world. "After entering the WTO, China has provided the entire world with a market worth nearly five trillion USD. This year in particular, China has organized groups to visit Europe and the US for investment and trade cooperation many times, which has greatly helped these countries to ease their pressure amid the financial crisis," Chen said.
To cope with the pressure brought about by the decline in overseas demand under the financial crisis, since the beginning of 2009, the Ministry of Commerce has formulated various measures to stimulate exports, strengthen its services for local governments and enterprises and help enterprises cope with international trade friction. "We must ensure that China will not lose its share in the international market," said Chen firmly.
He added, "Trade growth must be sustained, but the priority should be restructuring. China needs to transform the foreign trade growth model and rely more on increasing the added values of products as to occupy the international high-end market. At the same time, service trade should also be considered an important part of China's foreign trade development in the future."
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