East Asian trip leaves Andhra MLAs mesmerised (China, India)

Economic Times of India ^ | 7-22-02 | Press Trust of India

[AIG]

The delegation, which visited Beijing, Shanghai and some rural areas in China, was indelibly impressed by the changing face of the Communist country which is showcasing itself as a favoured investment destination for multinationals.

Briefing the delegation about the rapid economic progress of China during the past two decades, the deputy chief of the Indian mission in Beijing Debnath Shaw said, in the post-September 11 scenario, China was projecting itself as a 'safe haven' for foreign investments and was further liberalising procedures to open up its economy.

Focussing on infrastructure development, decentralisation, reforming labour laws and agriculture sector, China has been attracting FDIs at an annual rate of $45 billion against $5 billion that India had received since the beginning of the reforms in 1991.

"Contrary to popular perception about China, we realised that nothing comes free here and there are user charges for every service. State-owned public sector is being privatised and restructured and freebies have been done away with. This should be an eye-opener for our Communist friends back home," said a BJP member.

The legislators noted with keen interest the glowing neon signs of MNCs and American firms dotting the skylines of Chinese cities and a string of McDonalds and KFC outlets.

Projected as a symbol of Chinese economic reforms and opening-up programme, Shanghai's Pudong Special Economic Zone was a dazzling sight, with a string of skyscrappers housing a virtual who's who of the global corporate world.

Spread over an area of 522 sq km and developed within ten years, Pudong comes out as a shining example of how world class infrastructure could be created through focussed approach to attract a deluge of FDIs.

As the world's fastest growing economy, registering an average growth rate of nine per cent, China ranks second in terms of FDI flows, after United States, and is projected to become the world's largest economy between 2015 and 2030.

The delegation was informed that the total foreign investments in Pudong zone stood at $34.3 billion, with as many as 108 Fortune 500 companies launching 200 projects. This was in addition to over 5,200 domestic businesses with a capital of 20 billion Chinese yuan.

It was a revelation of sorts for the visiting legislators when they were told that Pudong was built after displacing over one million people by offering compensation, but without any procedural hurdles!

The Indian consulate general in Shanghai Sujan Chinoy informed the delegation that the gross domestic product (GDP) of Shanghai alone stood at $60 billion with information technology and services sector accounting for 50 per cent of the total GDP.

During their visit to some of the rural areas in China, the MLAs had a glimpse of the rapid reforms being carried out in agriculture sector with the establishment of township and village enterprises (TVEs), managed and run by farmers.

To make the agriculture sector more competitive, China has adopted a policy of vertical integration, linking up agriculture, industry and commerce.

"Whether it was China or Korea, the agriculture sector is no more the major contributor to the national GDP. The focus has shifted to services sector and high-technology industries. We need to replicate similar models back home," said a TDP member.