Although this year’s NPC&CPPCC closed in March, discussions have not stopped. As China has become the world’s second largest economy, and 2011 marks the start of 12th five-year plan, giving these two sessions a different meaning not only for the Chinese people, but also for the world. At the sessions,“Happy China” and “transition”became key words. While Premier Wen Jiabao raised the goals of GDP to around 8 percent and CPI to 4 percent next year, he stated: “Reining in prices is China’s ‘top priority’ in 2011, as we strives for more balanced eight percent economic growth, and this problem not only affects the people’s well-being, but also impacts our overall interests and social stability. We must therefore make it our top priority in macroeconomic control to keep overall price levels stable.” With the release of the 12th five-year plan, China has made the transition of the economic development mode, in the future, China will promote more imports and emphasize its market of domestic consumption. More foreign officials are also in China to focus on this great event, but what do the two sessions mean in their eyes, and what issues regarding the development of China are they most concerned about? So China’s Foreign Trade particularly interviewed two ambassadors in China, and let them share their thoughts with us on the two sessions.
QUESTIONS IS AS FOLLOWS
1. Do you personally pay close attention to NPC&CPPCC of 2011?
2. Have you read the government work report from Premier Wen Jiabao? Please comment on it.
3. During the two sessions, “Happy China” became one of the hottest words. What’s your understanding of the word?
4. China has set its GDP target for 2011 at 8 percent, one percentage point lower than last year. What do you think of “the target of GDP” ?
5. The 12th Five-Year Plan will be unveiled. Which issues are you concerned? And why?
6. In the two sessions of 2011, what proposals are you interested in? Why? And if you were the delegate of NPC&CPPCC, what would be your motions and proposals?
7. For CCPIT in 2011, do you have some suggestions or proposals in progress? And what’s your expectation for 2011?

A1. I pay close attention to the proceedings of the annual NPC and CPPCC meetings, as they represent the government’s blueprint for China’s near-term economic and social development. However, the meetings this year are of particular importance as 2011 marks the beginning of the 12th Five Year Plan. Given that China is just consolidating its recovery from the global financial crisis and that the overall structure of the economy is poised for meaningful change, these meetings assume much greater significance this year.
A2. The main theme that I identified in the Premier’s Work Report is the determination of the government to implement policies and programs that put people’s welfare first. The clear commitment is to ensure that more people share in the fruits of reform and opening-up.
In this regard, the fight against rising inflation is at the top of the government’s agenda. There is recognition that the people that are most hurt by increases in food prices are those that are at the lower rungs of the society. Although the overall CPI increase may not appear too high by international standards, the target of 4% set for this year has already been exceeded in the first two months of 2011 and food price inflation is in the double digits.
The risks of increased inflation, especially in food and in the housing market fully justify the attention that is being paid to this area. The combination of monetary policy and administrative measures announced in Premier Wen’s Work Plan is designed to address these problems. I specifically refer to plans to continue curbing excess liquidity, as well as those to increase food supply, provide subsidies to low income earners, construct 10 million government subsidized low income houses (36 million by 2015) and restrict harmful speculative activity.
A3. My understanding of the phrase “Happy China” is that there is a growing recognition of the importance of achieving development that is more people-centered, rather than narrowly focused on statistical achievements such as GDP growth. I note that Chinese officials will now be assessed on the basis of their success in making people happy. This is a positive development, as it will help to ensure that socio-economic development will be measured against the actual quality of life that people enjoy.
A4. The reduced target reflects the government’s view that China’s economy has to undergo a structural shift, in which sharper focus is placed on creating the conditions for sustainable and more moderate economic growth in future. In this regard, there has to be a greater reliance on boosting imports and expanding domestic consumer spending and less emphasis placed on fast paced, export-led, investmentfueled growth. This shift towards a more balanced structure is already happening, as evidenced by the fact that growth in imports last year outpaced growth in exports. Additionally, there has been the surprising news recently that China posted a $7.3 billion trade deficit in February, although this was probably due in part to the effect of the Spring Festival and so is expected to be short-lived.
A5. The government’s policy challenge will be to get the balance right between effectively managing inflation and securing more sustainable and better quality economic growth on the one hand, and on the other hand not tightening monetary policy so much that growth becomes stymied. This is a difficult balance to get right, as the risks of inflation are ever present. It is left to be seen whether the decision to maintain a proactive fiscal policy and to increase 2011 fiscal expenditure by 12%, which is greater than the projected increase in revenues of just 8%, will serve to exacerbate inflation or not.
I think, however, that the ongoing policy measures that regulate the pace of economic growth are moving in the right direction, when seen against the background of the reduced average GDP growth target of 7% that has been set for the period of the 12th Five Year Plan. Given the current state of the economy, this compares favorably with the very high average GDP growth rate of 11.2% that was seen in the past five years. It is unrealistic to expect that China will return to these high growth rates, given the slow down in external demand and the risk of economic overheating.
A6. The proposal for China to increase the amount of goods that it imports from the least developing coun- tries and those with which it has a trade surplus is interesting.
Many countries in the Latin American and Caribbean region, including Jamaica, are faced with a stubborn balance of trade deficit with China. Although there are some countries with a positive merchandise trade balance, the region as a whole maintains a deficit in its trade with China.
A7. CCPIT has been doing a good overall job in promoting foreign trade and investment, which includes assisting overseas exporters to build suitable partnerships with Chinese companies. However there is, in my view, a need for more attention to be paid to educating foreign entrepreneurs about how best to enter the Chinese market. The organization of seminars in foreign countries would be a good complement to the traditional outbound trade and investment missions that are organized by CCPIT, in which Chinese businesses are able to identify overseas partners and markets.
I am looking forward to the 3rd China-Caribbean Economic and Trade Cooperation Forum, which is scheduled to be held in Trinidad and Tobago later this year. I am certain that CCPIT’s involvement in this important event will serve to enhance the quality of the exchanges between the business communities of the Caribbean and China and increase the overall level of trade and investment flows that exist between us.
Ambassador: H. E. Libor Se?ka
From Where: Embassy of the Czech Republic
A1. Yes, I did in person and, as usually, our Embassy fol- lowed the debate and reports presented by China′s leadership in order to prepare a summary for our Headquarters in Prague.
A2. I carefully listened to the report presented by Premier Wen Jiabao, who summarized the development in China during the last year and outlined the tasks for the country and its leadership in the year 2011 and during next five-years plan. I was in particular very interested in the focus of the Chinese government on the improvement of the quality of life of the society. It is also very important to acknowledge all the impacts of the longterm period of fast economic development of the country, especially in the area of environment quality degradation. Being a member state of the European Union, which pays high attention to this issue, the Czech Republic appreciates the trend of the Chinese government policy towards sustainable economic development.
A3. In my opinion and understanding, the happiness of the society comes together with social stability, economic prosperity, gradual increase of the quality of life including healthy environment and individual freedom of choice in all aspects of life. I am sure that the Chinese government is working hard to achieve success in this field.
A4. For me the most important is not the figure itself, but the real substance of this growth for the population – creation of new jobs, improvement of the social system and health care, structure of the GDP with the needed changes(decreasing of the export dependence in favour of the rising domestic consumption), future sustainability, effectively of the resources consumption etc.
A5. I would like to see and understand how the Chinese leadership decided to face all the future tasks through the new 12th Five-Year Plan. This strategy will definitely influence the global economic development, as well as the future orientation of Czech exports to China. I also hope that more space and opportunities will be given to the opinions and recommendations of the representatives of the European businesses, whose investments helped and continue to help create the modern industry in China in accordance with the principles of sustainability, environment protection and effective use of resources. These companies create new jobs, bring new technologies and know-how and develop modern economic sectors in China to the benefit of the Chinese and world economy.
A6. As I have mentioned before, my attention is focused on the future sustainable economic and social devel- opment of China. I would like to see more progress in the opening-up of the domestic economy to foreign economic and investment cooperation, creating a level playing field with clear and transparent rules for doing business. I would support all proposals oriented for example to the improvement of the law enforcement, fight against corruption, increasing food safety.
A7. Our cooperation with the CCPIT so far has been intensive and friendly, therefore my sincere wish is to continue in this trend. We are ready to help boost the mutual relations between our chambers and associations and the CCPIT. I also think that both sides should be more active in promotion and information sharing about our countries. Finally, I would like to wish the CCPIT a very successful year 2011!