More China. Their strong currency will affect exports. If China's currency is stable, they will continue to see fund inflows. China's enconomy does not depend on exports......................................
cei.go.cn
Exports, funds inflow may drop
by Xu Binglan
<Picture: [IMG]>
Financial crisis to affect China a little
CHINA'S exports and inflow of foreign investment will be affected by the economic turmoil in Southeast Asian countries, but not seriously, State Statistics Bureau spokesman Ye Zhen said yesterday.
Low labour costs and a sound macroeconomics environment will continue to lend a competitive edge to China's export business, Ye said at a press conference on China's economic performance in 1997.
Devaluated currencies in the Southeast Asian countries and similarities in exports structure between China and these countries are believed to make Chinese exports lose ground.
However, "if you take a close look at their respective export structures, you will find many differences," Ye said.
Besides, devaluated currencies also resulted in higher costs for the Southeast Asian countries' equipment and raw material exports, a fact which was somewhat neglected by observers, he said.
Ye said China's exports for 1997 are expected to total US$180 billion, up 20 per cent over last year.
Trading surplus for the whole year is predicted to be US$40 billion, he said.
Admitting that exports will make less of a contribution to China's economic growth in 1998, Ye said there will not be fundamental changes in 1998 in China's exports.
He said international investors' cautious attitude toward Asian countries will influence the influx of foreign capital into China. The growth trend has slowed down due to a large base figure.
But China's biggest market will be its long-term appeal to foreign investors, he argued.
The government's recent initiative of offering preferential tax policies to overseas investors in the high-tech sector will help maintain the growth of new foreign investments, he said.
Actual-used foreign capital by China is forecast to be US$62 billion for 1997, up 13 per cent over last year.
Of the foreign money entering China this year, US$43 billion will be direct investment, Ye said.
He said China's foreign exchange reserve is expected to top US$140 billion, representing an increase of US$35 billion compared to the beginning of this year.
According to Ye, China's industrial sector witnessed appropriate growth in 1997.
Added value in the sector is expected to rise by 11.2 per cent to 3,175 billion yuan (US$383 billion).
However, the rate for State-owned firms remains low, which will stand at last year's level of 5.5 per cent.
Growth in fixed assets investments and consumption are both stable in 1997, he said.
Fixed assets investment will total 2,530 billion yuan (US$304 billion), which represents a 9 per cent increase.
Sales for consumer goods are expected to expand by 10.7 per cent over 1996 to reach 2,720 billion yuan (US$327 billion).
The net income of urban residents per capita is expected to be 5,140 yuan ($619), representing a 2.9 per cent increase over last year. The figure for rural residents will be 2,080 yuan (US$250), up 4 per cent. Date: 12/31/97 |
