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World News.com Article:

http://www.businessdaily.com/?action=display&article=12315948&template=worldnews/index.txt&a...
China Vows to Ease Pain of WTO Entry
The Associated Press, Wed 6 Mar 2002 Email this story to a friend
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BEIJING (AP) — Top officials promised Wednesday to ease the pain of China's entry into the World Trade Organization with spending on projects ranging from promoting high-tech exports to breeding better farm animals.

``Everything possible will be done to increase the country's volume of exports,'' said Zeng Peiyan, the development planning minister, in a report to China's legislature laying out economic goals for 2002.

Zeng and Finance Minister Xiang Huaicheng repeated warnings to China's industries — and especially its farms — that they must adapt to jarring changes after its December entry into the WTO, the rule-making body for world trade.

But they echoed the hopes of economic reformers that opening to foreign competition will make China's industries more competitive and encourage the inflow of investment, skills and technology.

Sounding more like a corporate vice president than a communist central planner, Zeng said Beijing plans to invest in new industries ranging from biotechnology to digital television.

Xiang promised help to China's inefficient, low-tech farms, which are expected to be among the biggest losers in the WTO transition. The government warned last week that China could lose 20 million farming jobs over the next several years.

In the countryside, where some 800 million people live, Xiang said China will spend $3.3 billion on developing better seeds and livestock and helping farmers adapt to competition brought by WTO entry.

Zeng promised support to more than 5 million jobless urban workers laid off in the overhaul of state industry. He said China's poorest areas would get $1.3 billion in ``poverty reduction'' spending.

Reversing a policy of restricting the outflow of investment, Zeng said Beijing will encourage Chinese companies to expand abroad.

``The strategy of going global will be vigorously promoted,'' he said. ``We will open emerging markets such as Russia, East Europe and Latin American.''

Such ambitions could prove daunting to foreign governments already facing a flood of low-priced Chinese exports. The United States reported a $83 billion trade deficit with China last year.

Xiang, in a separate report on the 2002 government budget, said Beijing also will try to boost domestic demand for Chinese goods by pumping more money into the economy through building bridges and other public works.

Xiang warned that Beijing faces a drop in revenues due to WTO-related tariff cuts, as well as tax cuts to stimulate business. He demanded an end to smuggling and rampant tax evasion, as well as tax breaks granted illegally by local officials.

Xiang and Zeng set an economic growth target of 7 percent this year. Such a figure would be the envy of other major countries, but it's below the 8 percent that Chinese officials say is the minimum required to replace jobs lost in shrinking state industry.