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Chinese Macro-economic Environment

During the past 20 years of reform and opening up, the national economy has been keeping a high-speed development with an average increase speed of two -digits, and has topped the countries all over the world. Since the latter period of the 1990s, the increasing speed though to certain extent dropped, still reached 7-8%, which was really commendable under the circumstance that the global economy increase slowed down. The Gross Domestic Product in 1997 was RMB7, 446.3 billion yuan, RMB7, 939.6 billion yuan in 1998, RMB8.205.4 billion yuan 1999, RMB8.940.4 billion yuan 2000, RMB9, 593.3 billion yuan in 2001 and RMB10.2398 trillion yuan in 2002 and become the sixth largest economic entity of the world.

China's economic development level was also improved with a high speed, the per capita GDP was nearly US$1,000, the people's living standard has been improving by a big margin and the problem of providing them with adequate food and clothing was settled, and some places and people have already took the lead in accession into the middle-advanced level.

Viewed from the increase of national economy and its development prospects, China also behaved tremendously well. The economic rate of increase during 1998-2001 was about 7.5%, which was still the highest in the world. The economic rate of increase of 2002 is 8% and is expected to be about 8% in the years to come. Meanwhile, the macro-economic environment was fairly stable. The government has, in recent years, energetically taken positive financial policies to stabilize exchange rate and reduce deposit interest rate so as to promote the development of economy; as a result, the residents' savings have been on constant rise and have exceeded RMB8 trillion yuan. From the perspective of factors of production, China's production costs consisting of labor force, raw materials and service and so on still possess powerful global competitiveness. The cost of payment is enormously under that of the developed countries and as well under that of most developing countries. China also increasingly elevates its economic opening degree. The total volume of export and import amounts US$620.8 billion in 2002, covering more than 40% of the proportion of GDP. Of which there is over US$325.6 billion of export, covering about 25% of the proportion of GDP, even more than that in many developed market economy countries. And foreign investment deposit amounts for more than US430 billion, covering about 1/3 of the GDP of the whole year; and an annual foreign investment of about US$50 billion has been absorbed, covering about 4% of the GDP. The above indicated that China's favorable macro-economic environment offers realistic conditions and reveals a broad prospect for foreign investment.

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