China signals West: We still need help from capitalists
Brussels — The largest team of senior trade officials ever to leave China has just spent two weeks in Brussels convincing worried Europeans that the trade potential of the People's Republic is not so bad after all.
Their visit, which ended April 10, was occasioned by the so-called EEC-China Business Week, which was initially planned as a simple get-acquainted meeting for the Europeans and the Chinese. But it became suddenly laden with meaning only weeks ago when the Chinese canceled $2 billion worth of foreign projects in China, including several petrochemical and steel plants to be built by European, Japanese, and American companies.
Western businessmen were clearly shaken by the cancellations, fearing the beginning of the end of hopes of blossoming business in the world's most populated country. "The halcyon days seemed over before they began," a European executive said.
But the Chinese have said that the cancellations heralded nothing more than a temporary shift in focus during a period of "readjustment." Nothing so drastic as closed-door leanings had been intended, the Chinese said.
In fact, for much of their stay in Brussels the 100 Chinese delegates wandered the chandeliered corridors of the Sheraton Hotel in their Mao suits telling 500 European businessmen, bankers, and government officials --business world -- that capitalists were still loved and needed.
"Readjustment does not mean making backward steps only," Vice-Minister for Foreign Trade Jia Shi said. "It involves both retrenchment and expansion."
Certain projects "which are not urgently needed or are beyond our present capabilities" will be discontinued or postponed, Jia Shi said. "But continued efforts will be made to expand production in agriculture, the light and textile industries, and consumer goods." Also high on the list of priorities will be improving energy production, communications, and transportation, and raising the level of science, education, public health, and culture.
Imports of technology, equipment, and materials in those fields will be increased, he said, and overall foreign trade will continue to grow. "Prior consideration will be given to importing equipment and technology which can add to our export capacity."
The Chinese have been saying all along that recent Western fears over trade and investment potential in their country have stemmed from initially outsized expectations. A developing country with a population of 1 billion could not help being a business bonanza, Westerners have reasoned.
But the Chinese have argued that growth would not be unqualified and unlimited, and that priority would be given to fulfilling long-term goals, not short-term expediencies.
Misleading, too, has been the meteoric rise in China's total import-export turnover in the past four years -- from $14.8 billion in 1977 to $36.6 billion last year. A slow down has been almost inevitable at some stage, and it is coming sooner rather than later.
"There is still plenty of trade and investment potential," a US official in Brussels said, "but finding the right formula to match the shift in emphasis in China's economic development will be the challenge."
European businessmen agree with that assessment after the Brussels meeting. Chinese officials have stressed to them they will need new and flexible strategies to deal with China's new priorities, including a shift away from heavy industry to light industry with export potential.
Chinese officials at the EEC-China Business Week, meanwhile, assured the country's main trading partners -- the EEC, Japan, and the US -- that slowly expanding trade in agricultural and manufactured products can be expected. Imports of raw materials, energy-exploitation equipment, technical expertise, and managerial expertise will also be needed to meet domestic production and construction demands, the Chinese officials said. American grain and cotton and European chemicals and fibers are said to be high on the list.
Whether the Chinese hold to their plan remains to be seen. In the meantime, they are holding the doors open. Gu Mu, the Chinese vice-premier and the third most influential policymaker in the country, has said, "We are ready to have extensive cooperation with the EEC and other friendly countries. I am convinced that there are bright prospects for our economic cooperation and t wo-way trade."