Economics and Peace: Consul General Zhong Addresses China’s Goals

Consul General Zhong Jianhua, from the Consulate General of the People’s Republic of China in Los Angeles, brought into sharp focus recent developments in the Chinese economy, Chinese foreign policy, and Chinese regional development in a three-pronged update at a luncheon held on March 12 at the Marriott.

With GDP from 2002 totaling US$1.2 trillion, foreign trade volume of US$600 billion, a 19% increase in foreign direct investment (FDI), strong exports, and heavy state spending, the Chinese economy is extremely robust. The projected growth rate for the PRC economy in 2003 is 7%. Also significant was the recent convening of the People’s Congress and the Chinese People’s Political Consultant Congress, where new policy steps to further Chinese reforms were discussed. Premier Zhu Rongji unveiled a economic structure reform plan that focused on areas such as deepening reform of the state owned assets management system. "Though on the surface, these seem to be minor changes, the significance of restructuring cannot be underestimated, for it represents a bold step to put an end to the remnants of the traditional planned economic system," Consul General Zhong explained.

In addition, the PRC will continue to fulfill its commitments to the WTO, maintain stability with a market diversity strategy, and expand trade in goods and services. China is also redoubling efforts to improve the investment environment and standardize procedures for attracting overseas investments. Bilateral, multilateral, and regional cooperation are important steps towards healthier Chinese economic growth, which in turn will inject more vigor into the global economy.

On the foreign policy front, Consul General Zhong stressed that China will continue to pursue an independent foreign policy of peace that seeks common development, a peaceful international environment, and a stable neighboring environment. Regarding the situation in Iraq, China’s position is that a political solution within the framework of the United Nations should be sought. On the Korean Peninsula, China advocates a nuclear-free North Korea and a peaceful solution for the overall stability of the region. China has played a positive and constructive role in this as well as other issues, and 2002 saw a marked improvement in U.S.-China relations.

The regular exchange of views between the two nation’s leaders has resulted in "an increased mutual understanding and trust that will undoubtedly ease international relations." Lastly, Consul General Zhong shared some personal observations about the dynamics between two economic stars: Shanghai and Hong Kong. Shanghai has developed very rapidly in the last decade and is beginning to challenge the traditional role of Hong Kong in certain sectors, leading to some competition between the two. However, Hong Kong’s more developed economy retains unique and irreplaceable advantages. Consul General Zhong predicted that Hong Kong will continue to be an international financial market while Shanghai will be mostly a domestic capital market. Hong Kong will continue to be dominated by service sectors and information technology while Shanghai focuses on the manufacturing and industrial sectors. Moreover, while the Hong Kong businessperson brings international business experience to Shanghai, Shanghai companies go to Hong Kong for capital raising experience and a more sophisticated financial structure. As the competition between Hong Kong and Shanghai is healthy and mutually beneficial, it is something to be embraced. Although faced with some challenges, such as a financial deficit, Hong Kong may also capitalize on greater integration with the Pearl River Delta region to strengthen its role as regional center for business operations. It has a good chance to not only restructure its economy, but "elevate its traditional role as a major hub connecting the PRC to international markets and consolidate its position as an international financial and economic center."

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