China and Asia in the New Century 9789814379236

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CHINA AND ASIA IN THE NEW CENTURY

The Institute of Southeast Asian Studies was established as an autonomous organization in 1968. It is a regional research centre for scholars and other specialists concerned with modern Southeast Asia, particularly the many-faceted problems of stability and security, economic development, and political and social change. The Institute's research programmes are Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS) and Regional Social and Cultural Studies (RSCS). The Institute is governed by a twenty-one-member Board of Trustees comprising nominees from the Singapore Government, the National University of Singapore, the various Chambers of Commerce, and professional and civic organizations. An Executive Committee oversees day-to-day operations; it is chaired by the Director, the Institute's chief academic and administrative oflicer.

Singapore Lecture 30 November 1999

CHINA AND ASIA IN THE NEW CENTURY

Zhu Rongji

Institute of Southeast Asian Studies

Published by Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614

Internet E-mail: [email protected] World Wide Web: http://iseas.ac.sg/pub.html © 2000 Institute of Southeast Asian Studies, Singapore

Cataloguing in Publication Data Zhu, Rongji. China and Asia in the new century. (Singapore lecture series; no. 17) I. China-Economic policy-19762. China-Economic conditions-19763. China-Foreign economic relations. 4. China-Foreign economic relations-Asia. I. Title. II. Series. DS50 I 1597 no. 17 1999

slsl999126339

ISBN 981-230-090-2 ISBN 0129-1912

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise. without the prior permission of the Institute of Southeast Asian Studies. Typeset by Superskill Graphics Pte Ltd Printed in Singapore by Seng Lee Press Pte Ltd.

CONTENTS

Opening Address

Lee Hsien Loong

1

II

JJi [i'iJ *JT tlt~C. ~ ~ 00 lj ilE {:1+1

Zhu Rongji

3

III

China and Asia in the New Century

Zhu Rongji

16

IV

itiB

29

v

Discussion

39

VI

Closing Remarks

Chia Siow Yue

49

I

Opening Address Lee Hsien Loong

Your Excellency, Premier Zhu Rongji, Prime Minister Goh Chok Tong, Excellencies, distinguished guests, ladies and gentlemen. I extend a very warm welcome to all of you present today. It's a great honour to have Premier Zhu Rongji with us today to give the 17th Singapore Lecture. Premier Zhu is the first leader in the People's Republic of China to address this forum. Premier Zhu's record speaks for itself. As Mayor of Shanghai from 1988 to 1990, Premier Zhu promoted the Pudong project vigorously. He convinced the Central Government to grant Pudong preferential tax treatment similar to that of the SEZs and to plough back revenue from Pudong into its development. He personally led missions abroad to promote the Pudong project. And in fact his last visit to Singapore in June 1990 was for that purpose. Among his other important initiatives as Shanghai Mayor, Premier Zhu launched the Shanghai Stock Exchange, the first in China. He also implemented housing reforms, promoting home ownership through a compulsory savings system, which has become a model for other cities in China. As Vice Premier in the early 1990s, Premier Zhu was tasked with dealing with the overheated Chinese economy. China was experiencing runaway investments in fixed assets, excessive expansion of money supply, double-digit inflation and a chaotic financial market. Growth was getting out of control. The Vice Premier concurrently became Governor of the People's Bank of China in July 1993. Through tough but clear-minded measures, including administrative decrees, monetary directives and fiscal measures, he progressively brought order to the economy and reigned in the excesses in finance and banking. China achieved a soft landing that few had believed possible.

2

As Premier, Zhu Rongji has established a reputation for being direct, practical and incisive, plain speaking and unafraid to acknowledge problems and shortcomings. He has continued to focus on economic reforms, particularly restructuring the state-owned enterprises, overhauling the banking sector, and streamlining the government bureaucracy. He understands not only how a market economy should work, but also the unique conditions in China and the need to balance economic reforms with political and social considerations. In his own words, Premier Zhu believes that China had to correctly handle the relationship between reform, development and stability so that the three would promote each other and reform and development are advanced while social stability is maintained. China's economic reforms are the work of many years. But China is making steady progress and its leaders have shown themselves determined to stay the course. One example is China's protracted efforts to join the World Trade Organization. As Premier Zhu noted in March this year, thirteen years have passed since China started negotiations to resume its status as a GATT contracting party, and to apply for WTO membership- the black hair has turned grey. The most difficult hurdle was to negotiate the terms of China's accession with the United States. After the near miss in April this year, many Asian countries were greatly relieved when China and the United States signed the bilateral market access agreement in Beijing earlier this month. This historic agreement augers well for the multilateral trading system, the vital Sino-U.S. relationship, and the prospects for accommodating China peacefully and constructively into the global system. And Premier Zhu played a pivotal role in bringing it about. A major part of international confidence in China depends on investor assessment of the leadership in charge. President Jiang Zemin, Premier Zhu Rongji and their colleagues in the Chinese leadership have brought China a long way to where it is today. China depends on their pragmatism, competence and resolve to ascend greater heights in the new millennium. Ladies and gentlemen, please join me now in welcoming Premier Zhu Rongji to deliver the 17th Singapore Lecture.

II

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