CHINA A ROLE MODEL FOR THE DEVELOPING ECONOMIES

FOREX RESERVES FROM $1B TO $1.9 TRILLION IN 30 YEARS

AMANULLAH BASHAR
Nov 24 - 30, 2008

China has emerged from a weak and sinking economy to the status of an economic super power on the global landscape by restructuring its socio-economic and political set up in accordance to its domestic requirements.

The magic lamp or magic wand has no role in the Chinese success story except the genuine leadership which infused the spirit and commitment to work hard for the people and the country with a passion. The credit of course goes to the Chinese leadership to earn this honor which is acknowledged all around the world.

Today, China is rightly celebrating its achievements what it has gained during last 30 years during that period China has registered GDP annual growth rate of nearly 10%. Back in 1978, China's GDP accounted for only 1% of the world's total. By 2007, it was over 5%, making China the fourth largest economy in the world. China's share in global trade jumped from less than 1% to roughly 8% during this period, turning China into the third largest trading nation in the world. China's foreign exchange reserves, which never exceeded US$1 billion before 1978, reached US$ 1.9 trillion in the first half of 2008. With growing strength of government revenue, many mega-projects are constructed, such as construction of the Three Gorges Dam and the Qinghai to Tibet railway. China was able to hold successfully the Beijing Olympic Games and Paralympics. Good progress was made in scientific and technological innovations such as successful carrying out manned space flights and China's first moon exploration project.

PAK-CHINA RELATIONSHIP

Mr. Chen Shanmin, Consul General of China has said that great efforts have to be made to reach the goal of $15 billion currently agreed by Pakistan and China.

Speaking at a seminar on "Pak-China Relations & 30 years of reforms opening in China" organized by Management Association of Pakistan, the Chinese diplomat said: "We should encourage more Chinese enterprises to invest in Pakistan". Safe and sound investment environment is needed to broaden our economic cooperation. With a common market of 1.5 billion people and an economy which is complementary and enjoys geographical advantage, I am confident that the trade and economic cooperation between China and Pakistan will continue to develop in future. People from Pakistan business circle and media play an important role in promoting Sino-Pak friendship.

In view of growing economic relations and growing trade volume some leading Chinese Bank are coming to Pakistan to facilitate trade between the two countries. A team of Development Bank of China has already arrived and exploring possibilities of opening branches in Karachi, Lahore and Islamabad.

Earlier the Chinese diplomat was welcomed and introduced by Farooq Hassan, Executive Director of the Management Association of Pakistan.

Chen said though the relations between China and Pakistan are characterized as good neighbors, good friends, good partners and good brothers yet there are still much room for improvement in our trade and economic cooperation. "Our friendship has withstood various tests and is deeply rooted in the hearts of our two peoples. We have always been sympathizing, understanding and supporting each other and becoming friends and brothers sharing weal and woe. The frequent exchange of high-level visits bears testimony of our all-weather friendship.

The economic and trade relations between the two countries are the fundamental part of our relations of strategic partnership. China attaches great importance to developing the Sino-Pak economic and trade relations and has all along been exploring new paths and means to deepen our bilateral cooperation in this regard. Under the joint efforts of our two sides, a series of important bilateral agreements have been signed, paving the way for expanding our economic and trade cooperation in various sectors. The Sino-Pak Free Trade Agreement is the first one of its kind China has ever signed with the South Asian countries. The bilateral trade is growing steadily. In 2007, total trade volume between our two countries reached 6.54 billion US dollars. From January to September of 2008, the trade volume is 5.342 billion US dollars with an increase of 14.7% comparing with the same period of last year. Our cooperation in area of investment has made new progress.

The Haier-Ruba Economic Zone was inaugurated as the earliest one among the eight overseas economic zones of China. The Pak-China Investment Company Ltd began to function at the end of last year. The CMPak invested by the China Mobile is now in good operation. By 2008 September, the total value of projects contracting and labor service worth of 15.59 billion US dollars have been signed by our two countries. More than 4000 Chinese engineers and technicians are working in Pakistan on various projects. Let us work together and relay the torch of friendship to a new height.

The economic and trade relations between the two countries are the fundamental part of our relations of strategic partnership.

FACTORS BEHIND CHINA'S SUCCESS STORY

This year marks the 30th anniversary of reform and opening-up in China. What was China like 30 years ago? At that time, China had just put an end to the "Cultural Revolution", and the country was in a backward and closed or semi-closed state with the economy on the brink of collapse. "Where should China go?" was a big and pressing question facing the Chinese people. Drawing lesson and experiences of development of China and other countries in the world, China chose the path of reform and opening-up, a critical choice that has since shaped the course of development of contemporary China.

REFORMS

China's reform began in the rural areas. It spread from the country to cities and from the economic sector to the political, cultural, social and all other fields. What started as a small stream grew into an unstoppable mighty current. The opening-up endeavor started with the establishment of Shenzhen and three other special economic zones and expanded to cities along the coast, rivers and border areas and eventually became an all directional and multi-tiered opening-up. We have achieved the historic transition from a highly centralized planned economy to a vibrant socialist market economy and from a closed or semi-closed society to one that is fully open to the outside world.

We have established the basic economic system for the primary stage of socialism, a modern corporate system that meets the needs of the market economy and a modern market system that is unified, open, and competitive and in good order. We have built a macro-economic regulation system that relies mainly on economic and legal means. And we have gradually improved the system under which distribution according to work is dominant: and a variety of distribution modes coexist. The social safety net has been further improved for greater equity and justice. At the same time, we have advanced reform in education, culture, science, technology, health and other areas, promoted political restructuring with the focus on expanding socialist democracy and adopted the strategy of building a country under the rule of law.

Reform and opening-up has brought a fundamental change to China. We have achieved fast development for almost 30 years. China's overall national strength has been greatly enhanced, the living standards of its people have significantly improved and the country's international standing has steadily risen.

China has undergone great changes from lack of adequate food and clothing to moderate prosperity. China's poverty population has reduced from 250 million to 15million. According to the statistics of World Bank, China accounted for 67 percent of the achievements in global poverty reduction. The Chinese government has rescinded the agricultural tax, ending the centuries-old practice of farmers paying taxes. Free nine-year compulsory education was made available to all students in China. Medical care system covers most of Chinese people. What is more important is that reform and opening-up have invigorated the whole society and enabled people to freely pursue a happy life through hard work, frugality and wisdom.

CONCLUSION

How China could achieve its success in development over the past 30 years?

China has taken the development path which accords with its own conditions. In 1978, China made the historic policy decision to shift the focus of state onto economic development and introduce reform and opening up. Since then, China has consistently pursued a series of corrective policies which include developing market economy, legal system and democracy, an advanced culture and building a harmonious society.

In Chinese terms they call it that building and developing socialism with distinct Chinese features China chose this development model independently in light of China's own conditions.

Time has proved that it is successful. We will keep to this path and make China a prosperous, strong, democratic, culturally advanced and harmonious modern socialist country.

PAKISTAN'S LIQUID FOREIGN RESERVES POSITION

The total liquid foreign reserves held by the country stood at $ 6,636.8million on 15th November, 2008. The break-up of the foreign reserves position is as under:

i) Foreign reserves held by the State Bank of Pakistan:

$ 3,459.6 million.

ii) Net foreign reserves held by banks (other than SBP):

$ 3,177.2 million

iii) Total liquid foreign reserves:

$ 6,636.8 million