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Wen vows to boost ODI, foreign trade

Wen vows to boost ODI, foreign trade

Updated: 2012-03-06 07:49

By Ding Qingfen (China Daily)

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China will further advance its reform and opening-up policy this year by encouraging companies to go abroad and by ensuring there are more opportunities for private companies.

"Reform and opening-up is the right choice and could determine China's future and destiny," said Premier Wen Jiabao in his annual work report to the National People's Congress on Monday.

"The nation will advance economic and political reforms by showing more determination and more courage."

Wen lowered China's economic growth target to 7.5 percent, an eight-year low, and put a priority on boosting consumer demand.

Although "we are placing an emphasis on expanding domestic consumption, China cannot ignore how important global demand (and exports) are to the nation's economic growth", Wen said.

This year, the value of China's exports and imports is expected to grow by 10 percent from the year before, and China's trade surplus will decrease further, he said.

The country plans to adopt a series of measures to sustain the increase in its exports this year. China will try to maintain its foreign trade policy - including its exports-tax rebate - and improve customs supervision and services, quality testing and its foreign exchange reserves. That will help exporters cope with difficulties such as an insufficient number of orders from elsewhere in the world, rising costs and growing trade frictions.

"Although China aims to shift and strengthen its economy through enlarging domestic consumption, that does not mean the country will stray away and give up on developing exports, which are so important for jobs," said Zhang Yunling, director of the division of international studies under the Chinese Academy of Social Sciences and a member of the Chinese People's Political Consultative Conference National Committee.

Wen vows to boost ODI, foreign trade

Foreign ambassadors to China, who were invited to attend the opening meeting of the National People's Congress, observe the proceedings at the Great Hall of the People in Beijing on Monday. [Photo by Feng Yongbin / China Daily]

Investing abroad

This year, China will further its strategy of going abroad, Wen said.

"The nation is at an important stage of accelerating the steps it has taken to make outbound investments," Wen said.

"China will guide all sorts of companies to make orderly investments in the energy, raw materials, agriculture, service and infrastructure industries, using mergers and acquisitions," he said.

This year was the first time that Wen elaborated on which industries would be targets for Chinese outbound direct investment.

Using that, "China expects to send a signal to the world that China's overseas interests lie not only in natural resources but also in many other things," said Zhang Xiaoji, a member of CPPCC National Committee and researcher at the State Council's Development Research Center.

The value of China's outbound direct investment surged by 1.8 percent to reach $60.1 billion in 2011. The bulk of the money from the country goes into resources and commerce services.

Zhao Qizheng, spokesman for the annual session of the 11th CPPCC National Committee, said at a news conference last week that China's overseas investment is still at an early stage and the country should try to use "public diplomacy" to help companies make investments overseas in a way that is both smooth and efficient.

"The failure of many Chinese investment proposals could be attributed to China's lack of public diplomacy," he said.

Private economy

China will "unswervingly encourage, support and guide the private economy, break monopolies and open the economy more to private companies," Wen said.

The country will encourage private companies to enter the "railway, finance, municipal administration, energy, telecommunication, education and medical-service industries."

For years, the State Council has had guidelines meant to encourage private companies to invest in more industries, but there are many obstacles that lie in front of that goal.

"It's easier said than done," Zhang Xiaoji said. "We expect to have detailed rules and regulations adopted."

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