BY J UOU ZHA OCI, DEPUTY DIRE CTOR-GENERAL OF GZ MUNICIPAL COMMISSION OF FOREIGN ECONOMIC RELA TIONS AND TRADE JUNE 1, 2000

Your Excellency Mr. Qassem Sultan, the honorable Mr. Shen Bonian, Vice Mayor of GZ. Distinguished guests, ladies and gentlemen.

It’s my great pleasure to attend this forum and on behalf of the Guangzhou MunicipalCommission of Foreign Economic Relations and Trade, to take this opportunity tobrief you my distinguished guests from Dubai, on the economic development andinvestment climate in G2. I hope that through this friendly exchange, the mutualeconomic cooperation will be furthered and the prosperity of our both cities will beenhanced.

I. A brief introduction of investment climate and economic development in GZ.

Guangzhou, capital city of Guangdong Province, is the province’s political,economic, science and technology, education and cultural center. It is China’smain gateway to the outside world. The Chinese Export Commodities Fair isheld here twice a year in spring and autumn. Since the implementation of thepolicy of reform and opening to the outside world, Guangzhou has alwaysplaced priority on economic construction. The national economy of the wholecity has been steadily increasing and investment climate has been improved.As a result, the city now boasts of the following five advantages:

The advantage of its ideal location and well-developed communication.Adjacent to Hong Kong and Macao, Guangzhou lies in the hinterland of theprosperous Pearl River Delta. It is the pivot of communications in southChina region. Sea, land and air transportation are very convenient and readilyavailable.

The second advantage is its economic growth potentials. As one of China’smajor economic growth centers, Guangzhou has built a solid foundation in theindustrial and service sectors targeting both domestic and overseas markets.Big strides have been made in the areas of electronics, automobiles,motorcycles, household appliances, textiles and garments, foodstuffs,pharmaceuticals, steel, petro-chemicals, etc. The city’s economic strengthranks the third among the 10 biggest cities in the country only next toShanghai and Beijing.

The third advantage is market superiority. Guangzhou is one of the maincenters for the circulation of commodities and is the economic pivot of thefive provinces and autonomous regions of southern China with a population ofnearly 300 million. It has a complete classification of trades, radiating over alarge area. Being one of the three main markets of the country, the city’s totalvolume of social retail sales achieved a year-on-year increase of 21 .l% for 21years on end since the reform and opening up.

The fourth advantage is the superiority in human resources. Guangzhou is thehome of 28 institutions of higher learning. 80% of the province’s science andtechnology talents are concentrated here with rich labor resources.

The fifth advantage is in legal system. A sound system has been set up with acomplete set of laws, regulations and administrative provisions to safeguardthe legal rights of external businessmen. Fair, convenient and fast services areprovided to foreign investors. Four state level development zones protectedby a set of laws and regulations have been established. The (GuangzhouEconomic and Technological District, the Guangzhou Bonded Zone, TheGuangzhou High-tech Development Zone and the Nansha Economic andTechnological Development District).

In the meantime, GZ has undergone a rapid development in foreign trade. In1999, the total import and export reached 14.407 billion US$, of which theexport was 7.822 billion US$, accounting 30% of the GDP of the whole city.The products have been exported to more than 196 countries and regions.

II. New opportunities for the cooperation between G2 and Dubai.

As one of the important commercial center in Persian Gulf, Dubai, also knownas the Persian Pearl shares a lot in common with GZ. Both are well-developedin economy coupled with a convenient transportation. Both have achievedremarkable successes in international trade, urban construction, infrastructure,environment protection and the living environment. All these has laid a solidfoundation for further mutual cooperation. As a matter of fact, Dubai has beenlong the important trade partner of China in Western Asia and North Africa.Beginning from 1992, China remains as the first or second export region forDubai. Each year, the Chinese businessmen including those from GZ keepgoing to Dubai to attend commodities fairs of all kinds there. At the sametime, among the businessmen from Middle East attending recent sessions ofthe Chinese Export Commodities Fair, the number of customers from UAE(mainly from Dubai) have exceeded 1000 each session with the turnover ofmore than 1 billion US$.

Last November, Chain and US signed the agreement on China’s entry into theWTO. So did China and EU. Furthermore, the US House Representatives hasapproved the bill on China’s PNTR status. It is generally expected thatChina’s access to WTO will be realized this year. China’s entry into WTOindicates that China will have a wider opening up to the outside world, thiswill bring a lot more opportunities as follows for the mutual cooperationbetween GZ and Dubai.

The first is to conduct international labor export service. As the central city inSouth China, GZ is well-developed in Science and Technology. In recentyears, Dubai has experienced rapid economic development and urbanconstruction. But it is faced with a shortage of labor force. Mutualcooperation in this area will be possible. Another opportunity is that theautomobile maintenance, after sale service in GZ may have their access to Dubai market. As for the construction companies, they may conductcontracting project in Dubai with the local companies there because we havealready gained much experience in recent international cooperation inBangladesh, Indonesia, Germany and New Zealand, etc.

The second is to engage in earnest in bilateral trade in import and export. ViaDubai, an international commercial center and a transit hub for global trade,GZ may expand its export of such products in light industry, textile andhousehold electrical appliances so as to enlarge its market shares in the areasin Western Asia and North Africa, while Dubai, at the same time may expandits export and entrepot ( ) trade via GZ so that the products from WesternAsia and UAE, even the ones worldwide will achieve their access to the otherprovinces all over China.

The third is to make investment promotion on both cities. China’s entry intoWTO, will signify another round of reform and economic leap forward withfar reaching significance. Since Dubai and other areas nearby are well-developed with ample supply of capital, they will play an important role in thenew round of economic development in G2. We warmly welcome investorsfrom Dubai to make your investment in our service sector, especially incommunication, finance, commerce, distributions, tourism, accounting, lawyerservice, transportation, etc. Investment are also encouraged in the high-techsectors in G2 Science and Technology City, GZ software Park, GD OpticalValley, GZ Biological Island. Priorities are put on telecommunication,environment protection, biological engineering, electronics, automobile,pharmaceuticals, network, etc. Infrastructure projects includes New Airport,Airport Expressway, No.2 North Ring Expressway, Metro Line 11, Metro LineIII, New Airport light rail, Huanan Expressway, GZ Xin Sha Port, The MainPivot Station of G2 Highway, City Sewage treatment, environment protection,etc.

Meanwhile GZ will adopt the strategy of going abroad for investmentpromotion. Factories are expected to set up in Dubai in form of assemblingwith material taken by self. Other forms involve the joint ventures andcooperation with the local companies in Dubai.

My dear friends, I am strongly convinced that through this friendly exchange,great achievements will be made in our foreign economic cooperation andtrade between GZ and Dubai.

Thank you very much.