In the afternoon of February 27 of 2009 of Britain time, Chen Deming, minister of Department of Commerce will accept BBC (BBC) in London Host Robert of famous TV? Paes (Robert Peston) Special visit,it is on China it last group meaning, trade relationses Sino-British to visit Europe, object to trade protectionism and China economy,etc. issue,etc.'s stating one's views. The following are interview faithful records:
Reporter: Minister Chen, thank you very much for finding time to be interviewed by mine today. As far as I know, you have led nearly 200 Chinese enterprises to make up Chinese Government to send to the purchase group of Europe for the first time. Do you hope what kind of achievement such an important activity is made?
Minister Chen: I hope the thing which enterprises want to buy can be bought.
Reporter: Up till now has reached some agreements with British enterprises?
Minister Chen: Yes, we signed some agreements this afternoon. The total amount of money of these agreements is probably more than 2 billion dollars, including plane engine, metal material, include, make film, software person who serve other some cooperation of together too.
Reporter: Why choose now such a time point, why determine, send, purchase group come product and service to buy Britain now?
Minister Chen: We form a team to go to Europe to purchase and can be said a trip of meeting commitment this time. This is the common understanding which Premier Wen Jiabao reaches with prime minister Brown while visiting your country of the beginning of this year, the main purpose is to promote Sino-British bilateral trades to develop steadily. In January of this year, the trade between China and Britain dropped by 21%, this is unfavorable to two countries commonly in conformity with the impact on financial crisis. So we promote Chinese enterprises to come to Britain on the organization, hope to let enterprises try hard to buy the thing wanted to buy a bit more. In fact have the Chinese enterprises of many goods to actually buy, will just combine entrepreneurs this time, and encourage them to purchase more. The government just sets up the stage, is decided finally what and what price should be bought by the entrepreneurs.
Say practically, contract and agreement signed now were mostly the past two weeks we promoted and reached. The enterprises that purchase group come to Britain to further consult these two days, will reach a lot of new projects. Passing another religious service, we will also have one to invest in the study group to discuss how to expand Britain's investment question correctly. This morning, prime minister Brown specially wrote a letter to me, expressing him will purchase the warm welcome of the group to China.
Reporter: It sounds as if it is a series of very important purchase, and its background is that Britain side has sizable trade deficit in the trade of two countries of Britain and Chinese. Britain side statistics show, Britain side's unfavourable balance was 18 billion pounds last year, figure in the year before last was 15 billion pounds. We know, the export of China of Britain is really increasing, but the pace increased in export to Britain of China is faster. Then, in your view, will the unfavourable balance of the Britain side be hopeful to shrink in the future in Sino-British bilateral trades?
Minister Chen: Indeed, the trade between China and Britain increases quickly, though we grasped the scale of Britain side's unfavourable balance not old as as what you said, but it is China's favorable balance to be overall, Britain's unfavourable balance. Our place is in an era of a free trade, Britain lies in the economic structure of both sides is different to the basic reason of forming unfavourable balance of China's trade, because the entrepreneurs are all bought and sold voluntarily. Chinese Government does not go to pursue such unfavourable balance or favorable balance sedulously. I hope the trade between China and Britain can be more balanced, so in the middle of the bilateral trade in the future, we will pay attention to promoting enterprises from the British import goods more, for example import equipment, technology of Britain more. In addition, the tertiary industry of Britain is more developed, we encourage expanding service for Britain to import, so we have a media and enterprise of the moviemaking to purchase accompanying activity this time.
What every country does not need to pursue trade is absolutely balanced. Weigh a national foreign trade state, the trade that should not only look at between it and a certain country at first is balanced, it depends on whether this country is balanced to global whole trade. Even if trade is uneven needn't be too anxious either, because there are other international incomes, for example exchange revenue, tourist earnings, the key depends on whether the international revenue and expenditure of a country is balanced, this is the most important.
Reporter: The opposition protectionism that China and British government determine publicly, but some British enterprises once told me, it is very difficult too to have entry of some industries in China in fact, for example telecommunications, the trade of publishing. Some companies tell me and monopolize existing in China some fields too. Do you think Chinese side should do more work, further these fields opening to the outside world?
Minister Chen: What you said is a very important problem, some other western countries reporters ask the question that I am similar to too. What I wanted to explain is, trade protection and trade protectionism are two concepts. China, European Union, Britain are all the members of World Trade Organization, we all do business under the rule of World Trade Organization according to our commitments to World Trade Organization. So every country allows to have regulations of some protection, this is what World Trade Organization allows. Protect within the range of these regulations, cannot be regarded as protectionism. But if violate these regulations but adopt other means without authorization by oneself, that is that we are unwilling to see, or the trade protectionism which we object to together.
China new member, as a developing country and WTO, the service trade has not totally opened, but we promise to WTO the opening on the agriculture, industry and service trade has already been totally accomplished. Moreover, in the projects of 160 service trades which World Trade Organization stipulate, we have already opened more than 100, open most one in all developing countries. For example the telecommunication industry that you talk about, China has already promised to open on the value-added telecom services, and hold the middle position to the technological question. China is pursuing the third generation of mobile phone and communication network now, we combine rather complicated only adoption China TDS-CDMA with intellectual property right, we can be managed in China while allowing European WCDMA too, have released the license of permitting too, allow CDMA-2000 of U.S.A. to come to China too.
China should really plan to further open the markets, open the investment field too. However, as a developing country, we all accomplish in commitments of WTO, if we further open the investment field, especially the investment field of the service trade, then what should we bring to some other countries too? Should the other countries be a little to our equally more opening too? I think right. In the negotiation of Doha of Geneva round, there is bid meeting of a service trade last July, we have functioned as the bid further opening the service trade, hope for and bring the other countries corresponding and open to us too. For example, a lot of countries admit the complete economic status of market of China, but some countries do not acknowledge China is the market economy country; Some countries agree China make the investment, but still the investment in China of some countries still limits etc.. To be frank, I think we should really be more open, but we hope the reciprocal ground bring others' opening too greater to us. It's a pity, through the negotiation of 10 days, the round of Doha has not succeeded finally.
Reporter: Now most people think, this global economic recession that we go through now is mainly U.S.A. in the blind or irresponsible method of some respects, and the situation that some main national banks excessively borrow money causes. But some of us have such a view, think this relates to the fact that some countries such as China, Japan have a large number of finance or foreign currency surplus, because to some degree, its fund and foreign exchange reserve can be got easily by the western countries at very cheap price. So, some people may have such an idea, i.e.: If China such a country can reduce surplus, international economy can become steady or security further perhaps. As to this how did you see? If it might be at all possible to reduce this kind of surplus in the future in China?
Minister Chen: The immediate cause of the financial crisis is actually very clear. September 15 last year, " Lehman's brother " Bankrupt gradually American whole to be expose the issues of the investment banks,and then whether from throwing there aren't conduct. But I do not think still the time to investigate responsibility now, the ones that should be become first are to fire fighting to rescue the city. The immediate cause of the crisis is that the financial losing of some countries is supervised, the relaxation making the financial lever inappropriate enlarges, it is the financial enterprise's transition that pursues profits, and the question of the financial intermediary. Certainly, in the long term, really have international economy's out-of-balance questions, for example some western countries pass the low deposit and too high consumption. There are some other countries too, for example question on Asian countries' economic structure, these questions are in the globalization course, the international division takes shape for a long time, it needs longer time to solve these problems.
Really there are larger international revenue and expenditure surpluses in Japan, South Korea, Chinese and other countries in Asia, its reason has the stage of economic development and factor of the international division, there is influence on these national people's consumption of traditional culture. China is still in the long-term course of the structural adjustment at present, as workforce's big country, will keep certain export favorable balance in longer time. But we do not court the favorable balance, we hope to reduce this kind of favorable balance through the structural adjustment. The method which reduces the favorable balance is not a simple fluctuation which depends on the exchange rate of RMB, do not export by reducing, and should be by turning these into money of the foreign currency, more one goes to purchase, travels, educates, consumes and makes the investment abroad abroad. In this way China will be in international revenue and expenditure more balanced state.
Generally speaking, I do not agree to that kind of statement, it was oneself that borrowed the others' money to consume ahead of time, get into serious trouble, go to blame to lend the money to the person of him also, say it is they that have responsibility, this kind of statement is impervious to reason in the view of philosophy of China, do not accord with general knowledge either. In addition, someone has this or that statements to the exchange rate question of China too. In fact, the stability of the exchange rate of RMB helps to increase people's confidence to international trade at present. RMB exchange rate rising and lowering to importing by a large margin and the export is unfavorable, it is very important too that the exchange rate of the present other countries keeps steady. From the point of another one, China and other countries are both the members of IMF, according to the rule of IMF and universally acknowledged principle, various countries can follow one's own situation and make one's own exchange rate policy, can implement the fixed exchange rate, whether there is limited floating rate of management or totally free and floating exchange rate policy. So the exchange rate policy which China adopts totally accords with the requirement for IMF and international criterion now, in fact since exchange rate forming mechanism reform of RMB, the exchange rate of RMB has already changed more than 20%.
Reporter: I know you do not approve the statement regarding Chinese Government handled exchange rate of RMB of newly appointed American finance minister Gaertner, but we must see that really have very large pressures to China in the world, require Chinese Government to adjust the exchange rate of RMB progressively during some time of future. In your view, will RMB appreciate in some time of future? Why?
Minister Chen: I want to say at first, it is said Mr. Gaertner said in some occasions, the report that the media quoted a remark out of its context to some sentence of his was not totally accurate, original idea of him media those meaning of report totally. I have not seen him himself, so have no way of verifying. I do not think China has handled the exchange rate, and I do not think either the U.S. government asserts China handles the exchange rate. In fact recent Hilary? Secretary of State Clinton visits China, other American ministers and I learn from each other, have not seen yes " Handle " This question.
In addition on one hand, the exchange rate of RMB is that adjustment comes according to the market supply and demand situation. If we have enough money that can be exchanged and paid, we should follow the market supply and demand and decide that go up and down. My own view, if no very great change will appear in global financial crisis and economic recession, then RMB are during some time when can see in the future, should be basically steady, do not exclude from fluctuating slightly, but will be in a basically steady state.
Some countries say China hold a large amount of foreign currency, but they do not know likewise serious influence of tsunami that the financial disturbance causes China. China, in past three months, imports and exports dropped seriously. Drop by 9% in November, drop by 11% in December, drop by 29% in January of this year. And because intension and shortage that the western fund is mobile, converge into and begin to flow and go outside reversely with outside. We will continue making some careful observation and analysis to these situations. In a word, RMB remain stable, it is favorable to international economy to avoid great wave.
Reporter: Global trade drops suddenly and has a very large impact on China's economy, do you think China's economic stability now has come down?
Minister Chen: The macroeconomy of China should look from two sides, says in terms of domestic economy, our basic side is good. We have taken much encouragement domestic economic development measures, including encouraging the people's consumption, expand investment in the government utility,etc.. Last December, the bank loan was RMB more than 900 billion, lent about 1,600 billion out in January of this year, it means the flowability of the Chinese fund is still very good, the basic side is good too. But China export-oriented degrees of high country, export of us account for GDP 37% about, imports and exports should account for 63% of GDP altogether. Such opening, in case of financial crisis and economic recession of the whole world, we can not be righteous alone in a community where the general moral tone is low, we receive very great influence too. According to my view, we continue being influenced in the first quarter of this year and in the second quarter, the foreign trade will also probably be further reduced, the pressure of falling is very large.
Someone thought global economy will recover at the end of this year, someone thought too Palestinian horse's government took a lot of measures after assuming power, U.S.A.'s economy may take a favorable turn. Certainly I hope so too, but I think U.S.A. very difficult, should rescue the finance as well as rescue real economy. May visit the bottom shortly but might not recover at once in economic growth of the world in term of my own view. As to this, China should make good preparations for tackling the challenge too. There are more than 10 million rural laborers working as a temporary labourer in the coastal cities in China to lose and work originally, have got back to the countryside again. So I think China must further open, shares in trouble with the other countries of the world to tide over the difficulty, this is why we will promote enterprises to come to Europe to purchase in so difficult cases too.
Reporter: Analyze from the formal technological aspect, do not you think China will fall into the economic recession? Could China avoid the gliding of economic growth? If present factories and close the serious situation of stopping work etc. in a large amount, can China's economy still be steady?
Minister Chen: I estimate, China's economy will increase to some extent in steady cases, but the acceleration rate will drop to some extent. So the economic growth that we expect this year is about 8%, and real standard several years ago was all more than 10%. What is called about 8%, even if is probably slightly greater than 8%, probably lack it a bit more than 8%. If we pass for half a year and have a look, this estimates the goal is too high or too low, we can change. As a whole, China economy certainly may keep positive growth avoiding negative growth, but the range increased will come down. Why I will have such confidence, on more than 6 billion people because of the whole world, and there are 1,300 million people in China, stage when these 1,300 million people and an income in the straight place increase progressively, consumption expand progressively. Expanding domestic consumption can remedy the part reduced influenced by world of export to a certain extent, in this way we can also continue keeping economic stabilizing and increasing. China exports the impact on GDP and probably gets in two percentage points between three percentage points. Through expanding domestic demand, our economy can keep the situation of growth.
I do not really worry about the growth of GDP, I think greatest challenge and problem are to solve the employment problem, the graduate's employment, employment of a large number of surplus workforces in the countryside. Fortunately those rural workers getting back to the countryside, they are still keeping field in the house, our governments at all levels are still trying every means to find them various work, for example lead them to do some little business, for example consider arranging for them to obtain employment etc. at first while building infrastructure. In a word, should try hard to let these persons losing the job can find some jobs of other substitution.
Reporter: We know your country's Premier Wen emphasizes very much the society is harmonious. Have one such situation in these countries of ours, will have unstable, turbulent situation of the some societies that appear when economy is not good. In this respect, are you anxious to some extent?
Minister Chen: What you said is right, so long as the economic growth rate falls, unemployed workers increase, society's unstable factor will really increase. We not only worry about this, the more important thing is to take various very careful concrete measures to reduce this kind of pressure. First of all, we want to improve peasants' social security, it is the diagnosing the illness of peasants that should have guarantee, the peasant child's reading ensures, the supporting parents of peasants should have guarantee. In the following several years from this year, we will invest more fund in the fields of these, let peasants' child study, peasants all have basic guarantee to diagnose the illness and support parents, even low-level. This has been accomplished, the relaxation that the social contradiction will be big.
Reporter: The last question. Everybody knows the countries all over the world sink into the economic recession deeply now, and China is with a very big, new super economic giant, in your opinion, it is in several weeks in the future or in time at several months can do China, can help by world until what pieces of things most important that come out in being the like a mess is?
Minister Chen: China is a big developing country, can't still deserved to be called the super economic giant far. Though so, we want one's own responsibility to the limit, contribute for the recovery of the present international economy. Have said, we can not be righteous alone in a community where the general moral tone is low, we are influenced too, we share in trouble in the front. I think a thing which we can do most is to do a good job of the Chinese thing, make China's economy still remain stable. China's economy and international economy have already had related relation greatly, it is very favorable that China's economy remains stable to the economic recovery of the world.
While doing a good job of one's own thing, we will take very open attitude, let in the overseas-funded enterprises of China, let the capital of enterprise, world of world all have a chance to participating in, China develop and construct. I think this helps everybody to propose confidence of shaking for the whole world. If we can make something again, we will advance the multilateral trade system in international affairs actively, promote the negotiation of the further free trade, advance the negotiation of round of Doha. We will appeal for paying close attention to at the meeting of G20 developing countries especially concern to the leaset developed countries further too, because influence and they which they receive overcome the difficulty of the difficulty than U.S.A., much larger than that of Europe. In addition, we will participate in discussion of the international reform in banking system,etc. actively too.
However, think the statement that China can rescue the world is unrealistic. China should make joint efforts with the countries all over the world, it is difficult that could really walk out. Real recovery of global economy await, consume national U.S.A. most in the world and heavy national association consumption of European Union mention and shake most, awaiting can go up on its stock market, house market, auto market, can enable international economy's real coming out like this.
Reporter: Can have an opportunity to meet you after hoping, but get here today, thank you very much.
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