Long Yongtu and the Smiling Curve: Only a Great Importer is a Great Power

Main Link: Taiwan News / CNA. Links within blockquote added during translation.

CNA reporter Kang Shih-jen (Kang Shih-jen, Ann Chen) in Chongqing, May 17.
Former mainland Chinese former chief negotiator of China’s accession to WTO and deputy foreign trade minister Long Yongtu emphasized today that if the mainland wants to change its international long-term status as a trade-surplus state, it will need to broaden its imports, which will also increase its customs revenues, and meet domestic demand.
(中央社記者康世人重慶17日電)曾任中國大陸入世首席談判代表、外經貿部副部長的龍永圖今天強調,大陸要改變在國際貿易中長期處於順差狀態的形象,就必須擴大進口,且擴大進口還能增加稅收、滿足內需。

Long Yongtu spoke on invitation by the 2012 World Trade Center Association (Chongqing) Development Forum and said that the mainland at a point in time where old concepts needed to change, and imports therefore be expanded.
龍永圖下午應邀在2012世界貿易中心協會(重慶)發展論壇上發表演說,談到大陸到了改變過時守舊觀念的時候,因此必須擴大進口。

He said that in the past, all the talk had been about how to expand exports, but now, Chongqing Development Forum made the topic of expanding imports a topic with new conceptions; at a time when global trade was depressed, every country had a responsibility to explore ways to expand its own imports, as only through that, global trade could be [re]invigorated.
他說,過去談貿易促進時,都談如何擴大出口,但今天重慶的發展論壇以擴大進口作為主題很有新意;在全球貿易處低迷時,每個國家都有責任研究如何擴大自身進口,唯有如此才能使全球貿易活躍。

Long Yongtu stressed that particularly for the mainland’s long-term status as a surplus trader, broadening imports would be beneficial for its image in global trade; by changing the long-term surplus, a positive contribution to global trade could be made.
龍永圖強調,尤其大陸長期處於貿易順差狀態,擴大進口有利改變大陸在全球貿易中的形象;改變長期順差的局面,才能為全球貿易做出積極貢獻。

He believes that to change the mainland’s image, traditional views and conservative, outdated concepts needed to change, and above all, the idea that exports were better than imports.
他認為,要改變大陸形象,得從觀念上改變傳統、守舊過時的看法,首先是改變出口比進口好的傳統觀念。

From the perspective of international theory, Long Yongtu pointed out that importing countries were, from beginning to end, the most benefitting countries: “Whoever controls imports will control the international initiative”.
從國際理論上來說,龍永圖指出,進口國始終是國際貿易中的最大贏家,「誰掌握進口,誰就掌握國際貿易的主動權」。

Long Yongtu said that, based on the example of the mainland and America, that although the mainland was a long-term exporter, its position in international trade wasn’t strong. Why was America “standing out” in international trade? It was because America was the world’s biggest importer. Therefore, if the mainland wanted to move from the position of a big trading nation to a great trading nation, there were only imports, and the need to become the world’s biggest importing country.
龍永圖以大陸和美國為例說,雖然大陸長期出口,但在國際貿易中的地位不強;美國為什麼在全球貿易體制當中「這麼牛」(這麼厲害)?就是因為美國是全球最大進口國,因此如果大陸要「從貿易大國走向貿易強國,只有進口,且必須要成為全球貿易最大進口國」。

Besides, Long Yongtu believes that expanding imports could also promote an increase in mainland industrial upgrading. The mainland exactly needed to switch from dependence on exports to putting domestic demand first, and could, through these means, also meet domestic demand.
此外,龍永圖認為,擴大進口也會促進大陸內部產業升級,大陸正從依靠出口轉向內需為主,也要擴大進口滿足內需。

He pointed out that to strengthen imports could also strengthen fiscal income. By reducing tariffs, imports could be stimulated and broadened, and the entry of products would benefit a broader custom and excise foundation, and increase tariff revenues.
他指出,增加進口還可增加政府財政稅收。由於關稅下降,刺激、擴大進口產品的進入,有利稅基擴大,提高關稅收入。

To expand imports was also the best answer to international trade protectionism. If the mainland expanded imports of European and American products, European and American trade barriers and protectionism would greatly be reduced.
龍永圖說,擴大進口也是解決國際貿易保護主義的最佳、最有效辦法。大陸擴大從歐美進口商品,歐美對大陸貿易障礙和貿易保護就大幅降低。

He also emphasized that processing trade [the term “extended workbench” should apply here – JR] wasn’t like normal trade, and that enterprises, great and small, had striven for the old concept of a level of all-inclusive organizational structures*), i. e. to increase their shares of self-made modules. [But in fact,] there was a need to master the global division of labor and procurement, to produce the world’s best products from the world’s best components and modules and thus build the most competitive products. Only this would be beneficial to the mainland’s economic development and make it the world’s marketcenter [purchasing center].
他還強調,要改變加工貿易不如一般貿易、企業發展追求「大而全、小而全」及提高零組件自製比例的舊觀念,要透過全球分工和全球採購,把全球最佳零組件集中形成全球最有競爭力的產品,才有利大陸經濟發展,也讓大陸能成為全球採購中心。

Long Yongtu also praised Chongqing for the creation of a new situation in the information processing industry. This had mainly been for the mainland’s customs rates having been lowered to zero when it entered the WTO. This had stimulated component imports, and the result had been research and development in and production of electronic components. In the end, when calculating the entire smiling curve, the entire assembly line had remained in Chongqing. The “Chongqing Model” had therefore deserved to be studied and to be followed [imitated] by mainland China’s [entire] central and western areas.
龍永圖也稱讚重慶打造一個電子資訊產業加工新型態,這主要是當年大陸加入世界貿易組織(WTO)時,決定讓電子零組件關稅降為零,刺激零組件進口,結果成就現在將研發、零組件製造、終端、結算整個微笑曲線流程全都留在重慶的「重慶模式」,這樣的模式值得研究和大陸中西部仿效。

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Note

*) The 大而全、小而全 slogan is translated, in an online publication of the Central Committee decision of September 1999, as the status of [state-owned, in that context] enterprises that

have an all-inclusive organizational structure, but have failed to establish specialized production and socialized coordination systems and an economy of scale, and lack market competitiveness

– see item IV. there. In short: the share of components bought from suppliers is small, because what would be sub-suppliers’ business elsewhere, is all integrated into a single company’s production under this concept.

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Related

» Low-End Exports, Oct 3, 2011
» More Scientific & Fairer Rules, Sept 19, 2011

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