News from BBC - Marconi won major network contract in China. I think CS already started its business involvement in China.
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Business: The Economy
UK investment boost in China
China would like to encourage more trade and investment with the UK
UK businesses have won contracts worth $3.5bn in China.
The news comes on the second day of President Jiang Zemin's state visit to
Britain, the first by a Chinese head of state.
The largest contract is between BP Amoco and the China Petroleum
Corporation to build a chemicals complex near Shanghai.
Other projects include a power plant in Hunan province, to be built by National
Power, and a fibre optic cable network for China's railways from Marconi.
"These deals show the massive commitment which UK companies are making
and their confidence in China as a major market for the 21st century," said
trade and industry minister Stephen Byers.
The UK is the sixth largest investor in China, with $13bn of direct investment.
Economic problems
Meanwhile, Chinese President Jiang Zemin conceded that China faces some
difficult economic problems during his state visit to Britain.
Speaking to businessmen at a lunch hosted by the China-Britain Business
Council, Jiang admitted that there were "new situations and new problems"
facing the Chinese economy in the future.
"Exports are under considerable pressure and consumption in the
domestic market is lagging," the Chinese president explained.
But he maintained that "China's economy on the whole is doing well."
Problems for investors
China's economy has been slowing down sharply in the past year, posing
problems for Western investors.
Growth declined to 7% in the third quarter of this year, well below the
average 10% growth rate during the extraordinary economic boom of the last
twenty years.
And prices fell by 2.8% - the second year of falling prices.
In a bid to restrict output, the Chinese government has banned new
investment in factories producing most consumer goods.
Qiu Xiaohua, deputy head of the State Statistics Bureau, blamed the deflation
on the spread of the market economy.
"In a market economy, consumers pay more attention when they see a
bargain and when goods they buy have better value. They are not in a rush to
buy," he said.
Exports have also been hurt by the devaluation of rival Asian currencies
during the Asian crisis.
Joining the World Trade Organisation
Jiang Zemin maintained that China was still determined to join the World Trade
Organisation, which could help boost investment and trade.
It has been seeking membership for the past 13 years, but has still not
reached agreement with the United States and the EU over measures to open
up its markets in return.
The Chinese President said that it was both in the world's and China's interest
for China to be inside the WTO.
But he made it clear there was a limit on Chinese concessions to obtain that
goal.
"We are firm on not sacrificing our national interests in undertaking any
international economic cooperation," he told the businessmen.
David Aaron, U.S. Under-Secretary of Commerce for International Trade, said
on Tuesday that China's WTO bid was approaching the "midnight" hour, and
that it would become very difficult to salvage a market-opening pact this
year.
China's central bank insisted that the opening up of the financial sector, one
of the key reforms, will continue whether or not China wins WTO membership.
"China's reform of the financial sector will absolutely not be affected (by the
WTO outcome). Reform polices outlined since 1998 will materialise step by
step," Cai Esheng, Assistant Governor of the People's Bank of China, said.
Several major UK financial institutions, including the Prudential, are waiting for
clearance to begin selling insurance policies in China.
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