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IV. Adapting to the New Situation Following China's Entry into the WTO and Opening Wider to the Outside World
China's entry into the WTO indicates that our opening up has entered a new stage. We need to actively participate in international economic cooperation and competition on a broader scale and in greater depth and complete our tasks for the first year of China's membership in the WTO.
In recent years and especially over the past few months, we have done a great deal of work to meet requirements for China's entry into the WTO. Review of relevant state laws and statutes has been completed by and large, and a number of laws and regulations have been repealed, revised and formulated. Beginning January 1, 2002, China's general tariff level has dropped from 15.3% to 12%, and the reduction involved more than 5,300 taxable items. This year we need to concentrate on increasing our international competitiveness and fulfilling the following tasks on the basis of what has been achieved. First, following the principles of the uniformity of law, nondiscrimination, and openness and transparency, we need to quickly improve the system of foreign-related economic laws and statutes so that they are suitable to domestic conditions and the WTO rules and able to guarantee fair and efficient law enforcement. Second, according to China's commitments in its entry into the WTO, we need to gradually expand the spheres of activity open to foreign businesses. In addition, we need to promptly formulate and revise market access standards for quality, sanitation, epidemic prevention, environmental protection and safety. Third, we need to study, master and fully exercise all the rights that China enjoys as a member of the WTO, and promote and participate in regional economic cooperation. Fourth, we need to study and publicize information about the WTO and its rules, and we need to provide training to public servants, especially leading cadres at and above county and division level and to managerial staff in large and medium-sized enterprises by stages and in groups. We need to bring forth, through training, a contingent of people who are well acquainted with the WTO rules and international economic cooperation and trade.
Foreign trade work has to be done conscientiously. We need to continue implementing the strategy of market diversification to increase this year's exports. We will retain existing markets for China's exports and open new ones. We will adjust and optimize the mix of export commodities, improve their quality and raise their added value. The policy measures for encouraging exports must be fully carried out. Key enterprises that generate large sums of foreign exchange through export and enjoy a good reputation should be ensured of tax refunds in full and on time. We will promptly reform and improve the system of export tax refunds. Tax exemption, reduction and refunding measures will be applied to those commodities which producers manufacture and export on their own or entrust foreign trade businesses to serve as agents for exporting. We will expand export credit insurance and provide more support for export. Reform of the customs service must be deepened to further facilitate customs clearance and to improve customs supervision. We also need to further reform and reorganize state-owned foreign trade businesses and diversify foreign trade entities and export channels. In continuing implementing the "go global" strategy, we need to encourage and help eligible enterprises under various forms of ownership to set up factories or undertake contracted projects outside China, particularly in neighboring countries, in order to increase the export of technology, equipment, materials and labor. We will import advanced technologies, key equipment, and raw and semi-finished materials that are in short supply in China. We will gradually diversify China's import markets for strategic supplies.
We will continue to utilize foreign funds and optimize the mix of foreign investment. We will focus on bringing in advanced technology, modern managerial expertise and qualified specialists. We need to encourage, through guidance, foreign businesses to invest in modern agriculture, industries using high and new technologies, construction of infrastructure facilities, and development of the western region and to participate in the restructuring and reorganization of state-owned enterprises. We should encourage foreign businesses, especially transnational corporations, to set up research and development centers, production bases and regional headquarters in China. To promote the development of China's service industries, we need to attract large reputable foreign enterprises and intermediary agencies engaged in commerce and trade, tourism, accounting and auditing. We also need to create conditions for attracting investment by small and medium-sized overseas enterprises. We need to continue improving the investment environment and the legal system. We need to do everything in accordance with the law, render better services to investors, improve our efficiency, and standardize our work related to attracting foreign businesses and investment. We will gradually give foreign-funded enterprises the same treatment as their Chinese counterparts. We support Shanghai in its bid to host the World's Fair for 2010.
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