Minister Xu Guanhua of Science and Technology said Friday that China must maintain an annual growth rate of 7 percent for 40 years in order to meet the target of building a moderately prosperous society across the country by 2020.

The time span he mentioned is between the late of 1970s, when China began its reform and opening up, and 2020, which is the last year that China must fulfill its goal of building a well-off society in an all-round way.

Addressing the news conference on building an innovation- oriented country on the sidelines of the ongoing Fourth Session of the Tenth National People’s Congress, (NPC), China’s parliament, Xu said “if we can maintain an investment rate of 40 percent from now on, the contribution rate of science and technology to GDP growth is slated to hit 60 percent from the current 39 percent.

“Otherwise, it is not possible for us to meet the target of quadrupling the current per capita GDP by the year 2020.”

“Our per capita supply of energy, water and land resources is becoming more stringent and the problems of resources and environment are becoming increasingly pressing after all these years of economic development,” Xu said.

Only by promoting scientific and technological development can China solve all these problems, he noted.

According to Xu, Chinese enterprises are under increasing pressure from international competition as they become more deeply involved in the globalization process of the world economy.

Xu also cited an example at the news conference to illustrate the importance of building an innovation-oriented society.

He said Chinese enterprises have to pay high patent fees for some key technologies. 20 percent of a mobile phone’s price, 30 percent of a computer’s price and 40 percent of the price of a program-controlled digital machine tool have to be ceded to foreign patents’ owners.

Source: Xinhua 09 March 2006  People’s Daily Online — http://english.people.com.cn/

Dr. Kenneth Lieberthal, Former Special Assistant to the President, National Security Council, Professor, Political Science and Ross School of Business University of Michigan gave a lecture in Shanghai on 01 March 2006 on AMERICAN PERSPECTIVES ON THE PEACEFUL DEVELOPMENT OF CHINA.

Key Questions that will impact the relationship:
1.        Will the US cite China as a currency manipulator in the upcoming WTO statements?  There is a good possibility that it will because of the huge pressure in the US.
2.        Will congress gain the right to do final review of all US assets deals?
3.        Will additional barriers be raised for China exports to US – penalty duties, etc?
4.        Will the US lodge a formal WTO complaint about currency manipulation?
Initiatives that can be taken on strategic factors to improve relationship:
These will be uncomfortable for both sides.
·          Fundamental domestic economic structure in each country – set up a structure to discuss the issues of differences and find strategic solutions for each.
·          Energy – it is silly for the G8 to discuss energy issues without China.  China is, in reality, a major power and not a developing nation.  All may be reluctant to do this and China especially since it would lose some position as a “developing nation” if it is able to join the G8.  China should join IEA and be allowed to participate.  Should begin a process for developing NE Asia Energy security strategy.
·          US should work countries in the region to find ways to participate more in the Asia Forums instead of being left out and worrying that China is replacing them in the region.
In summary Dr. Lieberthal concluded:
1.        Speed, Scale and Momentum of China’s development is a worry to the US.
2.        US-China relationship is mature, but very complex.
3.        China’s enhanced role gives possibility for it to participate in solutions.
4.        I’m cautiously optimistic!
 

China is still not doing enough to fulfill its WTO obligations nor to rein in an “epidemic” of counterfeit goods, the US government said in an annual trade report to Congress.

The report presented by US Trade Representative Rob Portman said “China’s implementation of its WTO obligations is still incomplete,” singling out abuses of intellectual property rights (IPR).  “Counterfeiting and piracy in China remain at epidemic levels and cause serious economic harm to US businesses in virtually every sector of the economy,” it said.
For full article see http://news.yahoo.com/s/afp/20060301/bs_afp/uschinatradepolitics_060301224419

 
 By James Ku International Herald Tribune
 

THURSDAY, MARCH 2, 2006 
CAMBRIDGE, Massachusetts Ensconced in a high-rise office suite as a manager at a Shanghai start-up firm, I frequently looked out of my window to watch the frantic activity outside. As construction cranes traced new outlines in the sky and ships carried goods down the river and out to sea, I always had the feeling of sitting in a luxury box at a sports arena, watching the 21st century’s economic main event unfold outside.
 
Unfortunately, the game I came to watch was one of fraud, deception and general incompetence.
For full article see http://www.iht.com/articles/2006/03/01/opinion/edku.php