The quality of imported Japanese consumer goods is creating controversy in China.
For Chinese artists, to globalize or not remains a key question at the year end.
Under the leadership of Milu, China finally realized the 44-yearold dream of qualifying for the World Cup Finals.
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Year In Review FRIDAY DECEMBER 28, 2001
Beijing: A Moveable Feast for the 21st Century Dear readers, The year 2001 has been a year of celebrations. Beijing won its bid to be the host city of the 2008 Olympic Games, China’s national football team won its ticket to the 2002 World Cup, and then finally last month China got its pass to the World Trade Organization. The city of Beijing, along with the rest of China, has experienced its wildest and longest carnival ever since July 13. The music paused now and then but has never stopped. We have to confess that we at Beijing Today are very proud to be here. For as young as we are, born on May 11, Beijing Today has had the honor to witness all these great events and to participate in this grand celebration of the city. In the July 13 outpouring of ecstasy, we were delighted to capture your faces, our dear readers, white, black, and brown faces mingling with yellow faces, thousands of you rejoicing for the city where you now work and live. Beijing was established in 1045 BC and has been the capital of a unified, powerful empire since 1271. Three thousand years of vicissitudes haven’t made Beijing senile and doddering; the scent of the glory and the humanity of the past fill every corner of Beijing, from the Forbidden City to the quadrangles to the siheyuans in the hutongs. And now prospects and opportunities for the future are greater than anywhere else in the world. Here I take the liberty of borrowing something from Ernest Hemingway, that is, his passion for Paris, and transfer it wholeheartedly to Beijing. For we, with an average age of 26, are as young as Hemingway when he was in Paris. If you are lucky enough to live in Beijing now, then wherever you go for the rest of your life you will carry it with you, for Beijing is indeed a moveable feast. Beijing Today is happy to be the weekly menu of specials to the feast, to offer you everything you need to be successful and to poetically inhabit this great city. The city will remember your youth, love, vigor, sweat, joy and tears. We wish you a happy, healthy, and prosperous New Year. Beijing Today Staff
Photo by Cui Jun EDITOR: LIU FENG
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Economists Review 2001
China’s Economy Expands as the World Sputters By Yang Xiao conomists act as summarizers and predictors, important roles that often influence policy makers. As the year 2001 ends, we present four influential Chinese economists (in alphabetical order) to analyze the economy.
difficult external conditions and maintained a high pace of development. Although there was a lot of internal debate, we have become a member of the WTO. This means that we will obey WTO rules and give up some national sovereignty, especially import tariffs. Given that seven or eight years ago we discussed every day whether to keep the market economy, this is great progress. But even now we encounter problems with the planned economy. The government has the power of approval, which impedes efficiency. Although the government realizes this shortcoming, its interests need to be considered. The problem involves the role of the government. The government is the representative of state-owned interests; at the same time the government acts as the referee in the economic arena. Under these conditions it is hard to maintain fairness among private companies, joint ventures, and state-owned companies. Shareholders were treated more fairly this year than before. The China Securities Regulatory Commission strengthened supervision and management and punished some renegade companies. On the other hand, rural people were not treated so fairly so well. Government policies still favor urban citizens over farmers. For example, farmers cannot share the interest of the social insurance fund. So the distance between urban and rural living standards is enlarging. This serious problem needs to be addressed.
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Justin Yifu Lin: Director of China Center for Economic Research Take part in the global division of labor This November China entered the WTO. This means that China can use its industrial capacity to compete with developed countries. They always put their labor-intensive industry in developing countries. Developed countries’ advantages come from capital-intensive or technologyintensive industries. We can take that as a rule. We will not manufacture hi-tech products but labor-intensive ones. And we will import advanced technology rather than conduct our own research-and-development to save the cost. This year the decision to sell state-owned shares on the stock market was an important event. In June five ministries began to carry out the policy, which led to a dramatic drop in stock prices, as I predicted. In November, after the stock index had fallen nearly 40 percent to about 1600 points, the sale of state-owned shares was suspended. Reducing the percentage of state-owned shares will adjust the structure of corporate ownership. But a lot of state-owned companies listed on the market show little ability to make profit. Under ideal conditions, the cost of raising capital by putting state-owned shares on the market should be more than the cost of borrowing capital from the banking system. But these companies cannot easily borrow from the banking system because they would have difficulty paying interest. The companies must improve their efficiency and their profit margins so investors are willing to buy their shares. Given these circumstances, the suspension of the sale of state-owned shares in November rejuvenated the stock market. During the next year, I hope the government will continue policies that enlarge internal demand. Liu Guoguang: Former Vice President of China Academy of Social Science Speed slows after 9-11 The world economy began to
Chinese model Yu Na captures the attention of a German admirer in September in Berlin Photo by Luke
slow down last year. The U.S. economy entered a recession in March; meanwhile the EU’s economy also began to show exhaustion. As a result China will achieve 7.4% GDP growth for 2001 rather than the 8% of last year. So I consider the 9-11 terrorist attack to be the most influential event in the worlds of both politics and economics. It
indicates the end of the developed countries’ long-term and rapid progress. This year we are making progress on enlarging internal demand, such as the development of the western areas. Although external demand has faded and international trade has dropped, inside the nation both investment and consump-
tion have remained strong. We still need to improve private investment next year; at the same time unemployment should receive serious attention. Mao Yushi: President of Unirule Institute of Economics Flying against the wind This year China overcame
Wang Guogang: Vice Director of Center of Finance Research, China Academy of Social Science Takeoff at the new century We can look on China’s entry to the WTO as a new beginning for the economy. China will face both opportunity and challenge when the world economy fluctuates. I think the most important phenomenon is “gradually complying with established rules,” which will influence public management policies, legislation, and market regulations. Government functions face a transition from a centrally planned economy to a market economy. From now on the government should not violate the established laws or rules. Companies can stop spending so much time worrying about their relations with relevant governments. We are happy to see the government has been complying with rules since the dawn of this year.
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