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Rediff News  All News  » Business » Fears of China's economic might exaggerated: WTO chief

Fears of China's economic might exaggerated: WTO chief

November 10, 2003 18:04 IST

China's phenomenal growth has sparked off fears the world over that the Asian giant's enormous export capacity and gigantic domestic market would make it impossible for any nation to compete effectively with Beijing.

But the World Trade Organisation director general Supachai Panitchpakdi said that these worries are 'largely exaggerated,' reports Business Times Singapore.

He was speaking at a seminar 'WTO and China' organised by China's ministry of commerce in Beijing.

Panitchpakdi said that the world could actually benefit from China's growth. He said that for almost two decades, the Chinese gross domestic product had logged a fairy tale annual growth rate of 10 per cent. The Asian giant's exports had registered an even better rate of growth of 14 per cent, which is three times faster than world trade, said Business Times Singapore.

India and China have been among the fastest growing economies in the world, and seem to poised for even bigger growth this year.

'No country in history has burst onto the world economic stage as dramatically as China. Just two years after entering the WTO, China has become the world's fourth largest trading nation, following the United States, the European Union and Japan," the WTO chief was quoted by Business Times Singapore as saying.

China's total foreign trade last year amounted to $693 billion and it has accumulated $450 billion in foreign direct investment, the newspaper said in its online version.

"These are really impressive results. Indeed they are so impressive it has raised concerns in some quarters that it will be impossible to compete effectively against China's immense export capacity and market size. Personally, I feel these fears are largely exaggerated," Business Times Singapore said quoting the WTO chief.

"Trade is not a zero sum game. China is not only a major exporter but also a major importer. China's modernisation program and export industries have required and will continue to require billions of dollars worth of equipment, technology and raw materials," said Panitchpakdi.

He noted that in the first nine months of 2003, China's exports rose 32 per cent, while its imports surged 41 per cent.

China will soon overtake Japan as the world's third largest importer behind the United States and Germany, the WTO chief predicted.

"At a time when the global economy remains fragile, China's robust economic performance should be welcomed as an engine for global growth," he said.

China's success should serve as inspiration for other developing countries, said the WTO chief.

"China's experience shows in the most concrete terms that developing countries can and do benefit from economic openness and integration," said Panitchpakdi, reports Business Times Singapore

The world trade body's chief said that Doubting Thomases who had warned China's integration had been proved wrong, reports Business Times Singapore.

China has taken recourse to tariff reductions after its entry into the WTO. This has led to lower prices of essential commodities, more choices for consumers, lower prices of essential imports for Chinese industries, and increased their competitiveness, said Business Times Singapore.

China's success is attributable to its commitment to deep economic reforms aimed at modernisation and growth, reported Business Times Singapore.