The opportunity and challenge faced in Beijing after the entrysintosthe WTO

　　By Deng Hongbo

　　China’s entrysintosthe WTO firstly is the government's entrysintosthe WTO. After entrysintosthe WTO, the government will greatly adjust and improve policy regulation, the managerial system and controlling mechanisms according to the principles of the WTO and the Chinese government's promise of entering the WTO. As far as the Chinese government is concerned, entrysintosthe WTO is not only the transition from non-membersintosfull member, but also means new definite responsibilities.

　　First of all, after entrysintosthe WTO, the Chinese government will thoroughly sort out and adjust legal regulations at home, government rules and policy measures according to the principles of the WTO, and finish the integration of our foreign trade legal system with the WTO legal system, which will be a tough, sacred task. Our government has promised that, on one hand, our country is sure to uniformly implement the WTO agreement and the WTO entry protocol within our whole customs range; on the other hand, regulations and other measures including some sorts of proper documents regulated by the local government in accord with the WTO’s principles and our promise to government.

　　Secondly, the Chinese government will engage in the shift of the government role, the reform of the macro-economic system, and the administration system by means of WTO principle. The WTO principles are the unified products of their consulting among every member’s governments. They also have to be the basic guidance obeyed by every member's government, and guide and restrain their forms, ways, measures of government management of the economy among the members. After entrysintosthe WTO the biggest change of China will be the transmission of the government' s role and macro-economic adjustment, which finally lays a macro foundation for other changes and economic development.

　　Thirdly, the Chinese government will take some measures conforming to the WTO principles to maintain state benefits. The principle of WTO is "there is an exception within the principle and a principle within the exception." That is, under the special circumstance the Chinese government will take additional measures to restrict the free trade legally, ensuring that home industries are protected and to protect the economic safety.

　　In addition, entrysintosthe WTO will also deeply influence our industries and enterprises participating in international competition. After entrysintosthe WTO the industries and enterprises in our country will directly take part in international competition under the background of the economic globalization. There exist some impressive changes about the contents of the international competition.

　　(I) The radical changes have occurred in the range of our industry and enterprise participating in the international competition.

　　"Stepping out of the gate of our country" is no longer becoming the range within which our industry and enterprises entersintosthe international market and participate in the international competition. With the constant decline of the market permission standard, the main content of which is to reduce custom duties, cancel non-duties measures, and open the service trade, lots of foreign enterprises and a large amount of capital will directly entersintosand compete with the Chinese markets, even if they won't "step out of the gate of state" or have just "stepped out of the gate of the factory." Our products and service have already enteredsintosinternational markets and participated in international competition.

　　(II) The " visible goods" competition is not the sole focus of the competition of the international market. The competition of some "invisible goods" caused by the service trade and the competition of the factors market, e.g. capital, technique and personnel, will increasingly become the important content and the competition focus of our enteringsintosthe international market and taking part in the international competition directly before "stepping out of the state gate." Competition over "the visible goods" and the factors market, especially the international competition of all sorts of talented personnel, will be more radical and heated.

　　(III) The international competition between such factors market as the capitals, the technique etc. and the commodity market will occupy a commanding position and has a dominant and decisive influence.

　　With the dropping of the market permission threshold and the enlarging of the market permission range, a large amount of capital, technique and talented personnel may be more mobile among the members of the WTO. As for a believable medium of the international capital technique and the talented personnel -- the transitional companies and enterprises can be relatively easier to entersintosour market and directly compete with the domestic enterprises after finishing the transitional period of WTO entry. These transnational enterprises with rich human resources, techniques and capital will avoid some competitive advantages of the home commodities and compete with the state enterprises in the capital, technical, and talented personnel market.

　　The opportunity and challenge of entrysintosthe WTO to the economic development in capital.

　　Entrysintosthe WTO will bring many good opportunities to our country. The first is that our country can fully enjoy the generalized preferential treatment, pay less import tax, be offered the same treatment as the other members and improve our international situation in international trade. Secondly, we may take advantage of the multi-lateral dispute settlement system to avoid the politicalization of bilateral trade disputes, to reduce trade conflicts and to increase the room for freedom of action in dealing with foreign trade relationships in our country. Thirdly, we will open the market, take the national treatmentsintoseffect and further increase our markets' attraction to the foreign investors. Fourthly, after entrysintosthe WTO, backward industries won't be protected any longer and labor pains caused by competition will be intensified. But in the long run, it will be beneficial to adjusting the domestic industry structure rapidly, improving the enterprise management and increasing the competitive ability of the state-owned enterprises quickly. Fifthly, we will directly participate in making multi-lateral trade regulations, beneficial to promoting our international position and maintaining the immediate interests of our country. Sixthly, we will benefit from the internationalization of our product ingredients, from the multi-resources of parts and materials, will grasp some main techniques, will no longer repeat the old road, and will make full use of two kinds of resources and two markets to realize the integration of the resource and markets.

　　As for the opportunities brought to the economic development of the capital, I think, first of all, they will accelerate the function shift of the local government and the system innovation of the administrative managements and settle the problems of our state-owned enterprise in reform and development. Secondly they will benefit to further enlarging the fields of the capital which are open to other countries and speed up the step of the building capital and the Olympic projects. Thirdly the extensive usage of the foreign investment in the tertiary industry will benefit the capital service industry and service trade development. Fourthly, the reduction of the barriers in importing the hi-tech and of the R&D costs will benefit the capital of the hi-tech industry. Fifthly, the improvement of the international investment condition and the intensification of Beijing international purchasing center will benefit to enlarging the scale of Beijing international export and import and the implement of localization strategy of the market.

　　The entrysintosWTO will bring not only the chance but also the challenge which are mainly from the following two points in our state view.

　　The first is the influence caused by the disagreement with the WTO principle in legal regulations, government rules, policy measures, government function, macro-adjusting system and the government system of administrative management within the transmission period of the entry to WTO.

　　The second is the impact of the market permission and opening on our partial industry and enterprises, the main content of which are "the reduction of duties, the gradual cancellation of duties measures and the opening of service industry " and some macro problems possibly caused by those, e.g. the finance problems, the agriculture problems and the employment problems, etc.

　　As for the capital development in economy, I think, the following problems will be worth deserving. The first is the relative backward of system reform; the second is the concept transmission of the civil servant ranks and the innovation of the learning structure; the third is the more radical challenge facing in the secondary industry, the state-owned enterprise and employment. The fourth is the severe test facing the development of the first industry, the impact on the import of agriculture products, and the non-trade barriers of the agriculture products.

　　The acceleration of the reform to the management system of the local government.

　　As for the local government, we should regard the entry to WTO as a turning point and turn the pressuresintosthe motivation under the unified planning and leadership of the central government, further transmit the government function, set up the incorruptible and efficient administration system with the coordinating operation and the standardized action, and increase the administration ability according to the law. In my opinion, the city of Beijing can reach its target through the following jobs.

　　To improve the local administration and legislation, involving in the foreign economic affairs; to reduce the economic trade activity through such tradition means as using "the internal documents," the policy and the instruction; to speed up the steps of the government management; to set up the management system of the economic trade activity regarding the laws, regulations as the primary basis; to carry on the management of the economy according to the international trade principle.

　　To accelerate the realization of drawing a clear line between the function of the government and enterprise, to reduce the direct intervene of the administration and the range of planning management, to develop the social intermediate organization actively.

　　To reform the government means of the economic and trade management, to weaken the government's directive planned management to the economy and trade. To bring the government's macro-managementsintosplay to make the middle or long-term development plan of the capital economy, to regulate the proper local legal rules, to monitor the enterprise implement to the nation laws and the government regulations, at the same time, to change the government management manner single-managed way to economic trade and gradually to turnsintosthe management ways, mainly by means of the economy and law management. To set up the system of the local government affairs, involving in foreign economic management, including the announcement and inquiry system about the management rules of the foreign business, to design the administrative document to announce the program; to set up the information announcement system of the economy concerning foreign business, to promote the transparency of the government information including the governmental affairs about the foreign business.

　　To improve the examining and approving system of the administration, to sort out the present examining and approving items, gradually to shrink the examining and registering range in the administration, to improve the examining and approving ways, to strengthen the supervision to the examining and approving.

　　To improve the administration charge system, to sort out and rectify the charge manner, to set the charge by means of laws, to make the charge range clear.

　　Letting Beijing develop towards the world.

　　In my opinion, under today's circumstance of the economic globalization, Beijing must insist on the strategy of the "stepping out." Facing the present problems existing in the strategy implement of the "stepping out," the government has to make promoting policy prospectively. The following principles should be defined in those policies.

　　The main role of the government is to accelerate and spread the relevant surroundings construction. On the base of making full use of the dynamic role in the enterprise itself, the active function of the association and the intermediate organizations to offer the enterprises service to remedy the "market working improperly," instead of drawing a clear line between the function of the government and enterprises or taking the other's jobsintoshis own hands.

　　The government regulations are to propel the policy implement about the "stepping out" strategy. We should adjust and escalate the "stepping out" strategy and the domestic industry construction on the height of the whole national economy development, and realize the combination of the constant cooperation and development.

　　As for the local government, while studying, probing and making policies related to the overseas investment, it must sort out the functions different from the central government. Neither can it replace of the central government, nor has nothing done, or stick to convention. It should make an active research within the power of office.

　　To probe the encouraging policy of the overseas investment, we should be with the situation as a whole in mind. The target of economy policy is multiple and it is impossible or unreasonable to abandon other targets when you pursue certain one, but observing the whole situation, has the overall planning, distinguish the primary and secondary and has something done with choice. What should be done in restricting the overseas direct investment is always what is needed beyond the economic target of the overseas direct investment (e, g, the exchange rate stability of RMB). We shouldn't put much energysintosthe policy adjustment impossible, but focus on the policy measures with the practical possibility.

　　According to the above principles, insgroupsto propel the implement of the "step out" strategy effectively, the government should take following measures:

　　Amplify the regulations of the foreign investment management and increase the management efficiency; propel the enterprise reform, speed up the pace of the construction of the modern enterprise institution and create the active enterprise main body; carry out the management policy of overseas state-owned property and protect the safety of the overseas property; with the economic means, guide the industry of overseas direct investment and its distribution and maximize the benefits brought by overseas investment; inspire to build the overseas investment insurance system and the overseas investment service system.