The US-Iraqi war will not seriously affect the
Chinese economy, stated Long Yongtu, secretary-general of
the Bo'ao Forum for Asia and former minister of foreign
trade and economic cooperation, at an investment symposium
held on March 28 in Hong Kong. Long explained that with
regard to China's economy, the greatest impact of the war
was on oil. At present, however, oil accounts for 20 percent
of China's energy structure, and the amount of oil imported
by China from Iraq makes up only 1 percent of its total oil
imports.
According to Long, the
growth of China's export in the first quarter this year
would reach a high rate of 50 percent, due to market
purchase for reserves prior to the US-Iraqi war. Since China
is facing the problem of deflation, the oil price rise will
not adversely affect China's economy. Further more, the
US-Iraqi war is a local war, which will have little impact
on the Chinese economy. Long said China's
current economic growth may be attributed to strong domestic
demand. For instance, the country's steel and cement
consumption last year accounted for 25 percent and 40
percent of the global total respectively, and the sales
volume of motor vehicles increased by 50 percent on the
previous year. With the progress in the housing reform,
demand for these products will continue to soar.
When asked about the arrangement for
closer economic and trade ties between the mainland and Hong
Kong, Long believed substantial agreement would be reached
in June this year. He stressed that the conclusion of
agreements between the mainland and Hong Kong and Macao does
not violate WTO rules. At present, many countries and
regions in the world, complying with the WTO rule on free
trade zones, have provided more favorable treatments to
other countries and regions. This practice conforms to the
stipulation of the WTO.
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