Fri, May 07, 2004 - Page 11 News List

As China's economy cools, so will `China fever': Siew

By Joyce Huang  /  STAFF REPORTER

China's plans to cool down its overheating economy may reroute China-bound Taiwanese investors back to their homeland for fresh capital, Vicent Siew (蕭萬長), the president's top economic adviser, said yesterday.

"Credit-tightening measures, to be adopted by China, are expected to trigger a short-term shock to regional economies, and may include a chill in `China fever,'" Siew told reporters yesterday before making a keynote speech to share his insights from attending the Boao Forum for Asia on April 24 and 25.

Siew, who is also chairman of both the Chung Hua Institution for Economic Research (CIER, 中經院) and the Cross-strait Common Market Foundation (兩岸共同市場基金會), said that the measures to bring China's runaway economy under control will, in the long run, help boost China's economic development in a much healthier way if a soft-landing is ensured.

Chinese Premier Wen Jiabao (溫家寶) said last week that China would adopt "effective and very forceful measures" to calm the nation's runaway economy. The Chinese government has restricted bank lending and halted new investment in cement, steel and aluminum businesses.

Siew said Taiwanese businessmen need not overreact to these measures, which Theodore Huang (黃茂雄), chairman of the Chinese National Association of Industry and Commerce (工商協進會), said would only take effect in the third and fourth quarters.

During his keynote speech, Siew, nevertheless, highlighted China's economic importance and contribution in regional and global trade development.

"China has leapt to become the economic hub in the Asia-Pacific region, which every Asian country is focusing on," he said, adding that Chinese leaders have shown great confidence in their past economic achievements.

According to Siew, China has achieved average economic growth of 9.4 percent since 1978 when economic reforms were launched.

China's economy increased in size tenfold from US$147.3 billion in 1978 to US$1.4 trillion last year, while its trade volume grew from US$20.6 billion to US$851.2 billion within the past 25 years and its foreign reserves grew from US$167 million to US$400.3 billion during the same period of time.

To ensure the success of economic reforms launched 25 years ago, China will continue to engage itself with world economies in a peaceful and cooperative way without posing any threats, Siew said, citing a Chinese researcher at the forum.

Under such circumstances, the economic integration between Taiwan and China will be irreversible and reciprocal regardless of an intensification in political confrontation across the Taiwan Strait, Siew said.

Therefore, he urged both countries to adopt practical measures to improve cross-strait economic and political relations.

Siew also urged the Democratic Progressive Party government to quickly remove cross-strait trade barriers, and implement direct links using non-official channels to negotiate with Beijing.

Taiwan could resort to the unofficial Boao forum, which many Chinese political heavyweights would attend, to establish a channel for cross-strait dialogues as well as cross-strait business exchange, he said.

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