No Cause For Gloomy Forecasts

"I feel utmost respect for your staff and I appreciate the analytical depth of your articles. However, I must inform you that after reading the article 'End of the Chinese Dream' I found myself under an unpleasant impression. Some of my Ukrainian friends called and voiced their indignation at this publication. Of course, I take such things calmly. The Occident and Orient belong to the regularities of nature: we shall see what we shall see. But is it worthwhile predicting a coming collapse?...

"It is true that no one in Ukraine knows anything about the sunset of the Chinese dream. I would even say that few elsewhere in the world predict it. God grant that this misunderstanding originates not from bias, but from lack of knowledge about Chinese realities. Over the past twenty years China has been conducting a policy of reform and openness, so one must not look at this again through the prism of 'rigid censorship.' In addition, China is not reproducing the old state economy, rather it is building a socialist market economy. Incidentally, a recent session of the National People's Congress enacted an important amendment to the Constitution, elevating the legal status of the private sector as 'an important component of the socialist economy.'

"One of the greatest merits of the chief architect of reform, Deng Xiaoping, is precisely that he philosophically united different things that cannot be formally united. Of course, restructuring the state economy is a bitter process accompanied by contradictions and difficulties. We do have a number of large unprofitable state enterprises, and this is precisely why our government set the task of liquidating this damage within three years. The year 1998 saw the accomplishment of one-third of this goal.

"As for the negative impact of the Asian financial crisis on the development of the economic situation in China, it is indeed very heavy, even critical. Moreover, the Chinese people has also suffered from the worst flood registered over the past century, damaging the Chinese economy to the tune of $30 billion. Under the burden of these two misfortunes China has not only survived but shown 7.8% economic growth. Retail costs have dropped by 2.6%, and consumer costs to the population have shown an overall 0.8% decline. In 1998, overall imports and exports reached $323.9 billion. The total amount of direct practically implemented foreign investment amounted to $45.5 billion. Frankly, there is a degree of dissatisfaction among the populace, particularly with regard to corruption, and certain confrontations occur now and then. But against the general background of the crisis the living standard of the Chinese people is not getting lower  but rising and the people are content with this situation.

"In spite of the gloomy forecasts offered by numerous experts, predicting the inevitable devaluation of the Chinese yuan, the Chinese government resolutely ruled out the possibility of lowering the national currency exchange rate, conducting an active financial policy, increasing domestic market demand. Perhaps because we have a foreign exchange reserve totaling $145 billion. This is a solid support. There is an opinion to the effect that yuan devaluation would be good for exports. China, however, is a responsible country and would not want to add to the world financial crisis, a fact which the international community duly appreciated, highly praising China's financial policy. I would like to point out that IMF loans given to countries damaged by the financial crisis include China's share.

"It is true that there are a great many problems and hardships in China. Its arable land occupies a mere 10% of the planet's total, and 1,200,000,000 persons have to be fed, which is 22% of the human race. True, over the past twenty years annual average economic growth increment has reached 9.8%, but there are still several tens of millions resident living below the poverty line. On the other hand, we had more than 200,000,000 poor before reform started. Well, hard facts are hard to refute.

"There is one thing I would like to stress: the Chinese people know from their own experience that blindly copying or criticizing someone else's 'dream,' forgetting about one's own specifics, does not always work. Personally, as Ambassador, I sincerely wish the wise Ukrainian people all the very best, rebirth of a great Ukraine, and 'sunrise of the Ukrainian dream.'

With profound respect, Zhou XIAOPEI, Ambassador  Extraordinary and Plenipotentiary of the People's Republic of China to Ukraine