Ministry in bid to diversify exports

PUBLISHED : Monday, 08 February, 1999, 12:00am
UPDATED : Monday, 08 February, 1999, 12:00am

Foreign Trade Minister Shi Guangsheng has outlined a new strategy of promoting hi-tech and high value-added products in an attempt to diversify the mainland's range of exports.

The strategy has been approved by the State Council and involves designating pilot industrial parks to lead the way in exports as well as using the convenient Hong Kong market to expand exports of hi-tech and new technological products, according to Xinhua.

The Ministry of Science and Technology will collaborate with the Ministry of Foreign Trade and Economic Co-operation (Moftec) and other ministries to formulate supporting policy.

Although the mainland has managed record figures in the last two decades, export growth turned negative last year, with a deep decline averted by a huge boost in low-tech products such as textiles, shoes, suitcases and plastic products to Europe and the US.

The technological level is truly what matters in international trade competition, Mr Shi said.

Mr Shi said there was vast potential for the export of hi-tech goods, pointing to India where computer software exports in 1997 amounted to US$1.75 billion, 12 times the value of the mainland's and second only to the US.

He said the strategy complemented Beijing's aim of using science and education to revitalise the nation.

One analyst warned the two countries could not be compared.

India had a huge advantage in English, the dominant computer programming language, and much of its hi-tech and software success has been driven by the private sector, he said.

In a further effort to boost flagging exports Beijing was to set up an export credit insurance agency which would operate separately from the mainland's Eximbank and the People's Insurance Company of China (PICC), the two organisations presently charged with aiding export firms.

Officials from Eximbank and the PICC said their companies were driven by the need for profit and could not afford to implement a proper export credit policy over the long term, the China Daily Business Weekly said.

The government stipulation that banks and insurance firms separate their operations also created difficulties, the paper said.

The Finance Ministry, Moftec, the China Insurance Regulatory Commission, the PICC and Eximbank are now talking about the details of the new organisation.