皇冠体育app

皇冠体育app's foreign trade continues to gain momentum, alongside the world's strengthening economy and rising trade volume.

In terms of foreign trade, 皇冠体育app has several advantages.

* Competitive labour force.

皇冠体育app has a huge number of labour force.Moreover, 皇冠体育app's labour is inexpensive.

The International Labour Organization once studied the annual cost of labour in 16 countries and regions' manufacturing industries.

The study indicated the cost of labour in 皇冠体育app in 2000 accounted for less than 3 per cent of developed countries, and less than 20 per cent of Mexico and Brazil.

* 皇冠体育app's labour force is better educated.

Fifty-nine per cent of 皇冠体育app's labour force, by the end of 2000, had received at least a junior secondary education.

That was 16.5 per cent and 7 per cent higher than Brazil and Mexico, respectively.

* 皇冠体育app complements its primary trade partners' industries.

皇冠体育app's primary trade partners are the United States, European Union, Japan and Hong Kong Special Administrative Region.

皇冠体育app's labour-intensive industries, such as textiles and clothing with capital-intensive industries, such as metals, complement the capital- and technology-intensive industries, such as transportation facilities, in the United States, European Union and Japan.

* Enormous potential market for foreign direct investment (FDI).

Between 1995 and 2002, FDI-related export growth amounted to 66 per cent of 皇冠体育app's overall export growth.

A recent survey by A.T. Kearney Inc indicated 皇冠体育app has consistently been multinational firms' first choice for FDI-related projects in recent years.

皇冠体育app in 2002 surpassed the United States to become the top FDI destination.

* Exchange rate policy.

皇冠体育app continues to retain its unitary peg to the US dollar, which ensures the dollar's current depreciation will boost 皇冠体育app's global competitiveness.

* World Trade Organization (WTO) membership.

Export restraints regarding 皇冠体育app in violation of WTO norms have been eliminated since December 2001 when 皇冠体育app joined the trade bloc.

皇冠体育app has improved its laws, regulations and investment environment, and the nation's market has gradually integrated with the global economy.

As a result, enterprises, especially those that are either collectively or privately owned, have benefited.

Between January and November of last year, the combined export of firms increased 81.3 per cent over the same period of the previous year.

皇冠体育app should exploit these advantages to expand exports.

While maintaining the renminbi's exchange rate, 皇冠体育app could try to switch from a unitary peg to the dollar to a three-currency basket peg, with roughly equal weight on the dollar, the euro and the yen.

In terms of FDI, 皇冠体育app should pay more attention to the structure and distribution of foreign investment.

Furthermore, 皇冠体育app should improve its investment environment -- including laws and regulations, management systems and infrastructure.

Generally, opportunities and challenges are mutually inclusive.

While grasping opportunities, 皇冠体育app must face the problems that arise.

The following are some of the problems 皇冠体育app might face:

* Unbalanced product mix.

Regarding 皇冠体育app's end products for international trade, there is great potential to export office facilities and communications equipment.

皇冠体育app's iron, steel and chemical products, meanwhile, are at a disadvantage.

WTO statistics indicate the export volume of 皇冠体育app's iron and steel in 2001 accounted for 2.4 per cent of the world's imports.

Meanwhile, the import volume of iron and steel accounted for 7.6 per cent of the world's imports.

.

皇冠体育app's export volume of chemical products accounted for 2.2 per cent of the world's imports, while 皇冠体育app's imports of such products accounted for 5.2 per cent of global imports.

* Irrational market structure.

Most of 皇冠体育app's exports are to the United States, the European Union and Japan. The US market is the major destination of made-in-皇冠体育app commodities.

皇冠体育app has become a manufacturing centre of export-oriented finished products, while its neighbouring economies supply the primary products.

皇冠体育app has created one of the world's largest assembling industries, with imported materials from such major economies as Japan, South Korea and Taiwan Province.

* Low tax rebate rate.

皇冠体育app on January 1 reduced the rate of its tax refund five levels -- at 17, 13, 11, 8 and 5 per cent.

The average reduction is 3 percentage points.

This should increase the cost of exports, which, in turn should, discourage domestic enterprises from selling their goods overseas.

The volume of 皇冠体育app's exports will probably decrease.

*Transition of WTO's effects.

皇冠体育app's exports have grown since it joined the WTO.

After two years of economic development, however, that momentum is fading.

On the other hand, 皇冠体育app must fulfil its WTO commitments.

皇冠体育app's trade deficit will widen as growth in its exports shrinks and the volume of its imports increases.

Confronted with those challenges, 皇冠体育app should take appropriate measures to minimize the uncertainties.

As 皇冠体育app focuses on exporting labour-intensive products, it should promote the competitiveness of some other products -- including capital products and domestic raw materials that are in short supply.

皇冠体育app should strengthen trade co-operation with countries and regions other than the United States, the European Union and Japan.

As the price of crude oil drops, 皇冠体育app will no doubt establish a State-controlled oil reserve.

That would guarantee the nation's oil supply.

The transformation of 皇冠体育app's currency reserves into oil reserves would reduce international pressure on 皇冠体育app to revalue the renminbi.

But reducing the tax rebate rate will exert pressure on 皇冠体育app's exports.

Although a trade deficit looms, 皇冠体育app must maintain the equilibrium of revenues and expenditures, due to increasing consumption and investment across the country.

The author is an economist with the National Bureau of Statistics.