Vice Governor You, Mayor Liu, Mr. Chairman, Distinguished Guests,
It gives me great pleasure to be invited to The Third China (Shenzhen) Consumer Goods Procurement Fair high-level roundtable meeting. I would like to suggest four considerations for your reference.
First, I would like to use some statistics to explain to you the huge capacity, excellent growth momentum and ever improved environment of the Chinese market. This year we have 3 groups of figures that may arouse your interest. One, this year the total volume of domestic and foreign trade will exceed US$1 trillion, in which the volume of import might exceed US$500 billion. Two, the total retail sales volume of social consumer goods will for the first time exceed 5 trillion yuan RMB to reach around 5.2 trillion yuan. Three, the volume of production material market of China will exceed 10 trillion yuan RMB to reach an estimated 10.3 trillion yuan. If the current development trend goes on, the import volume of China after 2010 might exceed US$1 trillion.
Before and after China's entry into the WTO, the Chinese government had all provinces, cities and autonomous regions revise over 2,300 laws and regulations, and we can say the trade and investment environment and relevant legal documents have totally met the requirements of the WTO. All these figures have fully demonstrated that the Chinese market has a huge capacity, excellent growth momentum and an ever-improved trade and investment environment.
Let me move on to my second consideration. China's logistic industry has enjoyed sustained development. Procurement fair of this kind is a positive attempt to promote development of modern logistics. Surely it also calls for improvement. I would like to quote a few figures to illustrate the rapid development of modern logistics. Three years ago I was here attending a meeting organized by the CPC Guangdong Provincial Committee of and the Guangdong Provincial People's Government. Secretary General Li Changchun himself, together with mayors of all the cities in Guangdong Province participated in that meeting. At that time, the sales volume realized by the chain business sector in Shenzhen accounted for only 20% of the city's total retail sales of social consumer goods; today, three years later, this ratio has risen to 40%. If this ratio further doubles in 3 or 5 years' time, on the indicator of chain store retailing, the development level of retail sector in Shenzhen will be the same as that in the US, the EU and Japan.
So far, the retail volume realized by the chain business sector of Guangdong Province has increased by 31.3%, indicating a rapid growth rate. That is the increase rate. In terms of the total retail volume, it has reached 175 billion yuan. Modern logistics has developed very rapidly in Shenzhen. The third China (Shenzhen) Consumer Goods Procurement Fair, which was open today, offers a no-time-difference and zero-distance way to link small- and medium-sized enterprises in China with domestic purchasers and retailers as well as foreign especially multi-national purchasers and retailers. This fair symbolizes exchanges and communication between Chinese small- and medium-sized enterprises and multi-national retail groups in a no-time-difference and zero-distance way across national borders. This approach facilitates others while developing ourselves. Therefore, it is a good model of sincere cooperation, mutual benefit and common development.
Of course, this fair needs improvement. And the improvement lies in supporting services. There's no need for procurement fairs of this kind to publicize the purchase volume accomplished. That's not important. What really matters is that a link is established, through which some multi-national purchasing groups can bring their standards, products in need and concepts to China and help Chinese enterprises communicate with the world and realize restructuring. This link should be a link of trade, a link of investment, and a platform of comprehensive economic integration. Therefore, the importance should be attached to the establishment of links, the enhancement of understanding and communication instead of the actual transaction volume. The transaction volume following the fair and the economic links will produce more fruitful results.
Supporting services for such procurement fairs are indispensable. For example, once a partner is found and orders placed, banks should follow up and offer their service. Just now someone suggested strengthening the follow-up service in distribution, logistics, quality inspection and IPR protection. This suggestion, and in fact, suggestions of this kind are very helpful. We initiated such a fair three years ago in Nanjing. I sincerely hope fairs like this will have a better development in the future.
Third, great importance should be attached to the IPR protection work. The Chinese government has remained a consistent and unswerving attitude and principle in IPR protection. We have never had any change in this respect. IPR protection is not only necessary for improving investment environment and expanding opening-up, but also the need of encouraging technological innovation and self improvement. The CPC Central Committee and the State Council also pay great attention to the IPR protection work. The State Council established the National Working Group on IPR Protection involving 12 departments with Vice Premier Wu Yi being the leader. The office of this working group is set in the Office of the National Leading Group for Rectifying and Standardizing Market Economic Order, of which I am the director. I believe we should emphasize this matter, for it has aroused great concern of all aspects. IPR protection is in the interest of promoting economic growth and all-round social progress. Therefore the State Council has decided to spend a year on nationwide special IPR protection campaigns. The Supreme People's Court and the Supreme People's Procuratorate will issue new interpretations on IPR protection laws and regulations by the end of this year. The IPR Protection Office has established regular contact with Quality Brand Protection Committee of China Association of Enterprises with Foreign Investment. The media have also intensified the education on the public on IPR protection. IPR protection work should be carried out in accordance with law and based on public participation. That's the third point I wish to put forth.
Fourth, with the coming of the year 2005, the transitional period after China's entry into the WTO will soon come to an end. It's one of our important tasks to fulfill our work well in the transitional period. I hope our enterprises will continue to keep their promises and abide by the WTO rules under the leadership of the Chinese government. We have done so in the past, and we shall keep doing it in the future. Also we need to establish a new mechanism for government, associations and industries to deal with all problems cropping up in the transitional period, and give full play to intermediate agencies and enterprises. In this regard, China Chain Store & Franchise Association has done very well. Tomorrow the 6th national conference of the China Chain Store & Franchise Association is to be held. Today we have many multi-national purchasing groups present at this conference. Seated together with them, our Chinese enterprises will find themselves among the most competitive players. What we can do now is to create a fair and equal environment so as to promote sincere cooperation, mutual benefit and common development. I hope to make one last suggestions to our Chinese retailers, a soldier is supposed to hold on to his post and train himself hard. We should be brave and competent enough to meet challenges brought by international counterparts. Those soldiers who are not willing to be a general are not good soldiers.
(Full text of the remarks by Zhang Zhigang, Vice Minister of Commerce of the People's Republic of China at the Roundtable Summit of the "3rd China Consumer Goods Procurement Fair" on November 8, 2004)