Ministry to help firms grow stronger
By Zhang Jin (China Daily)
Updated: 2004-09-12 08:47

Despite robust economic growth and some gains of the government-backed "go-global" drive, the international competitiveness of China's industries is still at a "relatively low level," said Vice-Minister of Commerce Ma Xiuhong.

Speaking to a seminar at the eighth China International Fair of Investment and Trade, which concluded on Saturday in Xiamen, Ma called for concerted efforts from government departments, industrial associations and enterprises to raise China's capability to compete in global markets.

The Ministry of Commerce will make the initial move by setting up a system to measure industrial competitiveness.

"Generally speaking, Chinese companies are weak in fending off international competition due to the lack of technological innovation, own brands and sale networks," said Ma.

For example, China only owns 60 per cent, 50 per cent and 15.8 per cent of the core technologies that are needed to manufacture colour television sets, cell phones and DVDs respectively.

Chinese companies are generally poor in management and operating efficiency, which hampers the overall improvement of industrial competitiveness, said Ma.

What makes things worse is that the enormous number of small and medium-sized enterprises (SMEs) are less competitive. Many of them operate with outdated technology and are fragile in the face of fiercer overseas competition.

"SMEs are the cornerstone of an industry," said Ma. "Only if they are active in the world market, can the whole industry become competitive."

Moreover, a combination of factors will continue to take a bite at Chinese industries, said Ma.

"Shortage of some raw materials and the increasing reliance on imports have bottlenecked the development of a few industries," said Ma.

She elaborated the point with a set of figures.

The imports of natural resources has surged by more than 50 per cent during the first half of the year. During the same period, imports of crude oil, iron ore and alumina have accounted for 45 per cent, 47 per cent and 48 per cent of the country's consumption.

Accelerated trade protectionism in the global market and China's further exposure to overseas rivalry under the World Trade Organization will also squeeze Chinese firms, she continued.

To make Chinese industries strong, the Ministry of Commerce is set to launch a long-term and comprehensive system that can examine the international competitiveness of China's industries, and thereby provide a clearer picture of the country's economy.

"We are working to nurture a set of rules and measures, which cater to China's own economic conditions, to oversee and appraise industrial competitiveness," said Ma.

The system will provide a factual basis for regulators to make policies and help enterprises fully understand where they stand in terms of global competitiveness.

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