Chinese array their broad investment vistas for more Western businessmen
It was the kind of international conference Peking likes to play host to. Some of the world's top bankers and financiers come to town (at their own expense) to learn firsthand about China's future development.Skip to next paragraph
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In the thickly carpeted meeting rooms of the Great Hall of the People, the messages spill out simultaneously in Chinese and English: Be patient. Think long term. China's policies are basically sound, even if they are not yet ``perfected.''
The appeals to consider China's potential and to cooperate in the government's ambitious economic development programs come from authoritative Chinese spokesmen in the state planning and economic commissions, the Foreign Trade Ministry, and the state banks -- and of course from the country's top technocrat, Premier Zhao Ziyang himself.
Sophisticates from London, Zurich, Tokyo, and New York like the sound of it, warming to the challenge of turning China's vast labor force and presumably massive but largely undetermined resources into a modern industrial dynamo.
The conference, held in Peking last week by the Bank of China and Euromoney Publications Ltd. of London, was just such an event. The meeting brought an unusually broad range of potential investors face to face with Chinese officials hungering for foreign capital and technology. Each of the 10 financial institutions that sponsored the meeting, reportedly at a cost of $65,000 each, brought in scores of clients to hear about investment opportunities inside the People's Republic.
Even some of the most experienced China hands were moved to praise the Chinese government's forward-looking presentations, though they had heard much of it before. ``I'm impressed by the strength of the Chinese commitment [to the open-door policies] and by the candor of their discussions,'' said one top financial officer from a Hong Kong-based subsidiary of a Fortune 500 company.
The predominantly West European and Japanese crowd was here mainly to learn and not to press concerns about the difficulties of doing business in China.
``This is very much an attempt to enlighten foreign bankers about the problems [of economic development] in China,'' Lord Chalfont, chairman of the conference, told the Monitor.
China's door to foreign business will open even wider, Premier Zhao told principal participants at a briefing before the conference. Economic progress goes hand in hand with political stability, Mr. Zhao said, and China's present policies are for the long term.
These assurances have been made frequently and emphatically since last year, when they first were stressed by senior leader Deng Xiaoping himself. They are always a welcome message for foreign businessmen, in view of China's three decades of political excesses and antagonism toward capitalism and foreign commercial interests.
China's economic growth rate must be stabilized at 7 to 8 percent a year, Zhao told investors. Last year it ran 12 to 13 percent. ``We have learned that the economic growth rate has to be controlled. An excessive rate is worse than an inadequate one.'' China's 1986-90 five-year plan will aim for a growth rate that minimizes inflation and does not strain China's underdeveloped systems of transportation, communications, services, etc.
China also realizes it must turn to international capital markets to finance development. ``We attach great importance to cooperation with foreign financial circles,'' Zhao told bankers. ``China has rich resources and a vast market, but it is short of funds. There are broad prospects for technical and economic cooperation between us.''
Western commercial experts say this is refreshing to hear. China had been relying on cheap money and concessionary loans, mainly from Japan and the World Bank. But the size of its development projects requires that it enter the high-interest international capital markets for more normal financing, one foreign commercial expert says.
China's capital needs are large. Its energy projects alone will run into the billions of dollars, Western diplomats say. China's foreign-exchange reserves, now estimated at about $14 billion, are far from adequate to finance development projects in the priority areas of energy, transportation, telecommunications, and the production of industrial materials in the next five years.
There were relatively few Americans at this conference, partly because the sponsoring institutions were mainly based in Europe and Japan. But some diplomats suggested that another reason is that American investors are at a different point in their learning curve with China.