Regarding the city's imports and exports ,the exports conducted by the enterprises affiliated to the city government increased from US$ 6.54 billion in 1996 to US$ 9.176 billion in 2000 with an average annual growth rate of 7.99%.The imports grew by a big margin, from US$ 3.97 billion in 1999 to US$ 8.466 billion in 2000. The average annual growth rate was 19.7% . Speaking of the actual foreign investment, the city entered a stage of readjustment after experiencing a fast growth in the Eighth Five Year Plan period. From the years of 1996 to 1999,the growth rates were 10%, 15.4% , 5.27% and 4.3% respectively. In 2000, The foreign direct investment (FDI) hit US$2.989 billion, an increase of 0.1%. During the whole period of the Ninth Five Year Plan period, the average annual growth rate of the actual inflow of foreign investment reached 7%.

 During the Ninth Five Year Plan period , neither the exports nor the actual utilization of foreign funds met the targets of 15% and 10% pre-set . However, GZ was still ahead of China's top cities in these areas. The pattern to further open up in all directions and at all levels with broadening spheres has initially taken shape. The foreign-oriented economy entered a new stage with the development of the foreign economy and trade characterized as follows:

 I. A Pattern of Grand Foreign Economy and Trade Had Been Taken Shape.

 During the Ninth Five Year Plan period, a pattern which foreign trade , foreign investment and foreign economy grew side by side had been formed . A diversification in performance of foreign economy and trade performance prevailed. Exports conducted by foreign-invested enterprises , state-owned foreign trade enterprises and imp & exp. Enterprises with self-management kept a momentum of growing. The exports performed by private-owned companies and scientific research institutes , overseas contracted projects as well as overseas processing trade had become a new force in terms of the city's exports in all directions.

 II. The Export Mix Kept Being Optimized.

 The industrial products made up more than 95% of the total export commodities in GZ. In 2000, among the traditional export commodities , the textile products decreased from 61% to 52% while the one of mechanical and electronic products grew from 26% to 36.39% year by year. Technology exports grew even faster , from US$37million in 1996 to US$ 588 million and the processing trade had occupied a dominant part in the city's foreign trade export , accounting for 73.3% of the total in 2000.

 III. The Export Marketplaces Had Been Diversified .

 During the Ninth Five Year Plan period , the export marketplaces had been diversified from 156 countries and regions in 1996 to 196 ones in 2000. The traditional proportion occupied by Asian marketplace decreased from 77% in 1996 to 52% in 2000 while exports to European and American countries grew fast, increasing from 33% of the total export volume in 1996 to 48% in 2000. New markets in South America, South Africa, Northern Europe and Oceania have been explored.

 IV. The Source of the Foreign Investment Had Been Exploited .

 During the Ninth Five Year Plan period, the introduction of foreign direct investment was mainly from Hong Kong and Macao regions. However , investment from Virgin Islands and Cayman Islands maintained a stable yearly growth momentum , ranking the second in terms of foreign investment absorbed , only next to Hong Kong. At the same time , the international capital from U.S.A, Japan and those developed countries from Western Europe kept coming in. Investment made by multi-national companies grew even faster. Ninety-eight companies of the Fortune global top 500 had set their footsteps in Guangzhou, bringing in 43 ?? projects with a total investment of US$ 3.4 billion and the actual investment of US$ 2.16 , among which , 80 ?? projects were invested by the 41 companies which are listed among Fortune 's top 100 .

 V. The Structure of Foreign Investments Had Been Gradually Improved. During the Ninth Five Year Plan period, Foreign investment had been shifted from medium and small manufactures to the city construction fields like infrastructure and real estate. New development had been achieved in such sectors as new hi-tech, IT, bio-pharmaceuticals and new materials. Besides, new breakthroughs had been made in its opening up of the sectors in the categories of financial service, insurance, tourism, commercial retails and chain sales.

 VI. A Yearly Increase in Foreign Investment and Shares Had Been Enhanced .

 In the year of 1996, Foreign businessmen seldom increased their investment . However , till the year of 2000, the city saw a figure of 366 projects to have increased their investments or shares , mainly from the productive projects, which accounted for 25.38% of the projects newly approved . The contracted foreign funds reached US$ 735 million, making up 44.95% of the total. The capital increase of the foreign-funded enterprises had become a new growth phenomenon in Guangzhou's utilization of foreign funds, a showcase that GZ has become more and more attractive to foreign investors.

 VII. The Overseas Economic and Technological Cooperation Kept Growing.

 During the Ninth Five Year Plan period, 28 new enterprises were set up abroad in those new sectors such as chemical, rubber and timber processing. Now, the total enterprises abroad reached 203, involving in over 30 countries and regions with a total assets of US$ 3.4 billion. Challenged by fierce competition abroad, GZ city still paved its way to signed new contracts in over 20 countries such as Brunei, Indonesia, Germany, New Zealand and India. The annual turnover reached over US$ 45 million and the workers working abroad per year were over 2000. Initial achievements had been acquired in implementing our strategy of going abroad to tap new marketplaces.

 VIII. The Role of Foreign Economy & Trade in National Economy Had Been Further Enhanced.

 With the ever-growing of foreign economy and trade , the export-orient economy had been gradually facilitated and the economy of the whole city , been driven to a new stage . During the Ninth Five Year Plan period, the annual total export volume accounted for 30% of the GDP of the whole city while the annual actual introduction of foreign investment occupied 36% of the fix assets investment of the society and the gross industrial output of foreign investment , 43% of the city's total . In 2000, Exports from foreign-invested enterprises constituted 65.44 % of the city's total export volume while the tax revenue paid by companies with foreign investment was on the increase year by year with an annual occupation of 30% of the city's financial revenue, fundamentally resulting in a steady increase in national economy in GZ.

 During the Ninth Five Year Plan period, Greater achievement had been acquired in foreign economy and trade in GZ. However , there still leaves much room to be improved . The first is that the speed to streamline the mix of export commodities is a little bit slower . The technological innovation ability of the export-orient enterprises was far from satisfactory and we lack of those knowledge-based and high value added commodities to export . The second is that we have a small proportion of exports from self-managed foreign trade enterprises and a comparatively small scale of exports from state-owned enterprises engaging in foreign trade. This is uncompetitive in the near future . The third is that the structure of foreign investment has not been better optimized. There are not as many hi-tech projects and pillar projects as expected . Neither the quality nor the quantity is competitive as compared with the ones in the advanced areas in our country. In general , there leaves no room for optimism in the absorption of foreign investment since the foreign investment projects and the contractual utilization of foreign capital are on the decrease year by year.

 The Future Development Situation During

 the Tenth Five Year Plan Period

 Over the coming years , the world economic situation will be better and better as a whole . The international trade will keep a comparatively steady growth momentum amidst twists and turns and the international capital will become more and more active . Multi-national companies will become the important carriers in economic globalization. Processing trade will grow to promote the structural adjustment in those developing countries. Our national economy will maintain a rapid, healthy and sustainable development . With China's accession to WTO , a setup to open up in all directions and at all levels has been formed . This will provide a better competitive opportunity and an optimized environment for our foreign economy and trade both at home and abroad. However , uncertain factors still exist. The city's economic growth quality is not , by far , strong enough to meet the challenges of the international market. With the globalization of economy as well as China's accession to WTO, the city will embrace the ever greater challenges in foreign economy and trade in the days to come.

 Guidelines , Objectives and Focus

 I. Guidelines

 The city will make pioneering efforts in its drive to be basically modernized and build itself into a modern central city. By seizing the opportunities of China 's access to WTO.GZ city will loose no time to implement the strategy to revitalize the trade with science and technology and readjust the structure of foreign economy & trade. Priorities will be given to exports of hi-tech products and products with high added value. The policy to make an active, rational and effective utilization of foreign investment will be implemented. More foreign capital will be lured . Focuses will be put on the development of the tertiary industry to make a further opening up .By making full use of the resource and the markets both at home and abroad , the city will take an active part in international economic competition and division so as to quicken the steps in the development of economic globalization .

 II. Objectives

 a. To maintain appropriate growth rate and focus on big large items for export. The average yearly growth rate of exports will be targeted at 8% during the 10th Five Year Plan period and by 2005 the exports from city-owned foreign trade companies will be boosted to US$ 13.48 billion. Emphasis will be put on the exports by large export-oriented companies and large-scale conventional products. Efforts will be made to promote an integration of industry and trade and the right to "self-export" will be expanded. Processing trade will be upgraded so as to ensure a balanced development either in general trade or in processing trade.

 b. To optimize export structure by rejuvenating the trade through science & technology. To reform and optimize the composition of traditional export products by increasing the content of science and technology. Exports of mechanical and electric products , especially the complete-set products , high value-added products or products with high technology content will be facilitated. Special support will be guaranteed to the exports from those key hi-tech enterprises , the famous brand products with large scale and those technology export projects involving independent IPR.

 c. To consolidate the traditional markets and tap new markets abroad. On the basis of appropriately adjusting and consolidating the markets in Hong Kong and Southeast Asia, efforts will be made to steadily expand exports to the United States, the European Union and Japan. Endeavour will also be made to tap the market potential in West Africa, the Middle East, Latin America and some other regions. At the same time, gradual increase of exports to East Europe, Russia and South Africa will be pushed. In a word, export markets will be further expanded on the basis of existing markets.

 d. To maintain the current level of foreign investment and to optimize the sources of foreign investment. During the 10th Five-year Plan period, foreign investment will be vigorously introduced according to the actual demand from the economic development in Guangzhou. FDI will maintain at the amount not less than US$ 3 billion level, which was achieved at the end of the 9th Five-year Plan period. The annual increase of 1.5% is the target. The channels of foreign investment should be optimized. Investments from Hong Kong, Macao and Taiwan will be encouraged as before. Efforts shall be stepped up to introduce multinational companies and consortia to Guangzhou.

 e. To open up more fields for foreign investment in order to improve quality. To open up the service sector wider in Guangzhou to foreigners so that more and more fields will be infused by foreign capital. Foreign investors will be encouraged to invest in Guangzhou's hi-tech industries to create a number of pillar hi-tech JV s or cooperative enterprises. Export of hi-tech products will be actively promoted.

 III. Focus

 To accelerate the process of economic globalization in GZ. Such productive factors as capital and technology will be put in the circulation worldwide so as to realize the global economic operation among trade , investment , finance and service . Six new breakthroughs will be achieved during the 10th Five-year Plan period.

 a. To apply the strategy of boosting trade with science & technology in the process of optimizing export commodity mix so as to realize a breakthrough in the structural transformation and upgrading the export commodities. To step up the construction of science & technology parks, software parks and bio-tech parks in order to enhance the exports of electrical & mechanical products, soft wares, bio-chemicals, Chinese medicine and other hi-tech products. Guided by science and technology, more efforts will be put on reforming and upgrading conventional export products and elevating processing trade to a higher level so as to turn them into the value-added and technology-intensified projects.

 b. To implement the strategy to go abroad to tap new markets so as to realize a new and dynamic trade patterns. To exert great efforts to develop the service trade by virtue of the opportunity brought about by China's entry into WTO. By way of going abroad to tap new markets, exports in the forms of processing with self-supplied materials and project contracting will be emphasized. Emphasis will also be made to establish Guangzhou's international e-trade network to conduct on-line examination and approval of the projects. Also, distribution networks of multinational companies will be fully exploited so as to boost a brisk and dynamic market by setting up brand-name stores, JV trading companies, and overseas commercial centers to form a multi-outlet of export market and business network.

 c. To deepen the reform of the foreign trade system to realize the breakthrough in integrative performance in foreign trade. At present, exports by foreign trade enterprises are too small. To change it, large-scale export corporations based on conventional products, markets and clients must be set up step by step. New approaches to combine trade with industry will be tried. New endeavors to integrate production, trade and R & D in different owner-ships, localities and divisions will be made . Efforts will be made to help the enterprises in GZ to create the power to tap the new markets worldwide and avoid risks.

 d. To optimize the structure of foreign investment and to make hi-tech enterprises more attractive to foreign investor. More foreign capital will be guided to invest in industrial projects especially in the key projects to upgrade the enterprises. Particular emphasis will be put on foreign investment in Guangzhou's infrastructure projects, the reform of state-owned enterprises and the development of modern agricultural projects. Foreign investors are encouraged to focus on high-tech and knowledge-based projects such as electronic information, bio-pharmaceuticals, environmental protection, new materials, optical-electrical integration. It should be made more adaptable and resilient to new situation and development in world economy and technology so as to develop new areas of industries in GZ.

 e. To attract more investments from Europe, the United States and Japan to achieve the breakthrough in the optimizing the composition of foreign capital. In addition to the major channels of foreign investment from Hong Kong, Taiwan and Macao regions, more efforts will be made to attract investments from Europe, the United States and Japan. The comprehensive quality of the policy environment in GZ will be bettered to attract large multinational companies to invest . All these may substantially diversify the foreign investment and improve the quality of projects introduced.

 f. To speed up the opening up of the service industry so as to broaden the areas for foreign capital to realize the breakthrough in the utilization of foreign capital. With China' access to WTO, great efforts will be made to promote a new round of mutual cooperation between Hong Kong and Guangzhou by relying on the prestigious position of Hong Kong in the world . Focuses will be laid on cooperation and the development of the service sector. Step by step, further opening up will be launched in such intermediary-service sectors as commerce, trade, banking, telecommunications, tourism, medical care, education, accounting and legal consulting, putting Guangzhou at the forefront of the opening up across the country.

 Ⅳ.Major policies and measures

 a. Highlight the improvement of investment environment

 Make efforts to build a comfortable and beautiful city environment. Promote the construction of the city's eco-environment, spiritual civilization, and legal system, improve the infrastructure in terms of transportation, information network and environmental protection, handle well the social security, so as to build Guangzhou into a modern central city fit for both living and business.

 Perfect the legal environment of foreign trade. Overhaul the existing policies and regulations and constitute relevant ones at proper time, implement the laws and regulations concerning the administration of and service to foreign invested enterprises, do away with the practice of arbitrary charges, fund-raising quotas(requisition of donations) and unwarranted inspections, deal heavy blow to the infringement of intellectual property rights, protect the legal rights and interests of foreign investors according to law. Raise the standard of service provided by the Administration and Service Center for Foreign Investors, increase the service efficiency and make sure that the foreign invested enterprises fully enjoy the national treatment within the jurisdiction of the city.

 Perfect the administration system of foreign trade and economic cooperation. Deepen the reform of examination and approval system of foreign trade. Increase the transparency of examination and approval of foreign invested projects and strengthen the follow-up administration. Build up a macro control and service system of foreign trade and economic cooperation which fits the socialist market economy. Promote the publicity and study of WTO knowledge and set up a functioning mechanism in line with the WTO rules; put the relationship between the government and market, the government and enterprises on the right track so as to make effective adjustment and control in accordance with market rules.

 b. Optimize the structure of export products.

 Guangzhou has been listed among the 15 cities to develop trade by means of science and technology. To seize the opportunity, a set of policies and measures are to be effected soon to promote and support this concept. The high-tech enterprises and products will be treated with preferential policies In terms of resource allocation, financial support, loans on favorable terms, quotas allocation, the examination and approval of the business licenses and oversea travels by technical personnel. Quicken the construction of Guangzhou Science and Technology Park, Software Park and Biology Island. Actively develop export-oriented products of electronic information, bio-medicine, new materials and software which have high added values and a huge demand abroad. Increase the percentage of whole-set of equipments and electronic and machinery products among exports. Actively implement the export strategy of "support the big, strong, and new companies", emphasize the development of industries and products with the prospect of becoming the growth point, help them become strong international competitors with support of policy and capital. Put quality first and assist enterprises to obtain the ISO9000 certificates. Build a number of foreign trade production bases to make famous-brand products for export and promote the export of the products with our own intellectual property rights. Upgrade the traditional export products with high and new technologies, mainly focusing on the textiles, the electronic and machinery products. Introduce and master advanced technologies and carry out the strategy of "developing trade through science and technology": build the Guangzhou international trade business network soon, and promote and popularize e-commerce through utilizing digital and internet technology, promote foreign investment and sell products through the internet and turn it into a permanent international business fair and trade fair.

 Develop the processing trade in a regulated way. Implement the strategy of upgrading the processing trade and gradually developing it from labor intensive to capital and technology intensive. Upgrade the technology of the processing trade and promote big projects with advanced technologies. Expand the industry chain of processing trade and strengthen the interdependence between processing trade and local industries to enlarge the export of processing products.

 c. Promote the diversification of foreign markets

 Strengthen the strategy of "Establishing business abroad" First, constitute relevant policies for key enterprises which are set to establish business abroad and sell their products there and actively support them in terms of oversea travel, foreign exchange, favorable financial and tax policies, enterprises going public abroad, so as to bring their initiative into full play. Second, develop overseas processing trade with materials exported from China and export well-developed technology and redundant equipment to bring about an upsurge in the export of production equipment, raw material and semi-finished products, develop processing trade with materials exported from China in South Africa, Southeast Asia and Middle-east, and Europe by taking full advantage of Guangzhou's strong light industry, household appliance manufacturing and processing of textiles. Third, expand foreign markets by pooling the strength of Guangzhou's enterprises invested abroad and its overseas trade business centers, which have both the much-needed market information and well-trained trade professionals, and the strength of domestic enterprises in trade and industry. Fourth, explore the business of overseas projects contracting and labor dispatching, support the enterprises to undertake state economic aid projects and projects for international tendering, which will have a great impact and bring about the increase of export and expanded market share.

 Explore diversified world market. Explore the markets in developing countries in Africa, Middle-East and South America while consolidating the traditional Asian, European and American markets. Establish and perfect policies and measures encouraging exploring new markets, make use of the special fund for market exploring, set up the export credit insurance system through the establishment of export insurance fund, and provide information about market needs and policies, organize the enterprises to attend various international expositions and exhibitions, and expand the export to emerging markets and overseas markets.

 Develop trade in diversified ways and methods. Further optimize the structure of export products and expand the import and export of goods. At the same time, constitute relevant policies and measures to spur the development of service trade, explore market trough various ways of technology trade, compensation trade, entrecote trade and multilateral trade. Be apt to the trend of the restructuring of the world economy, promote the international international trade through chain stores, encourage the enterprises to set up joint ventures with foreign wholesaler and chain stores and explore world market with their resources. Make full use of modern science and technology and actively develop e-commerce to explore new ways of no-paper trade for international trade.

 d. Actively push foreword the diversification of ownership of foreign trade and economic cooperation

 We shall make full use of the opportunities brought about by China's WTO accession and the preferential policies granted by the central government, give full play to the state-owned IE ( Import and Export ) companies, enterprises with trade right to export self-manufactured products and the foreign-funded enterprises as the three main components for exportation. Meanwhile, in an effort to assist and encourage private-owned and township firms going global so as to fuel new blood for exportation, preferential policies as well as incentives shall be worked out. It is necessary to gather the strengths of scientific research institutes, enhance the collaboration between technology and trade, foster high and new technology enterprises and scientific research institutes as new growth point for exportation and, increase the technological content of export goods.

 Further deepen state-owned IE companies restructuring.

 We shall push forward the reform on property right of foreign trade enterprises, streamline value-added mechanism for state-owned assets, set up state-owned assets operation company, realize resource-sharing, enhance capability, take advantage of current human resource of IE companies and market network etc., continuously expand import and export business. In the meantime, we shall pursue strategic restructuring of the said companies, break the limits on sector and ownership, try to construct large sized trading enterprises integrating scientific research, manufacturing, trading, and commerce with the capital, trade marks and brands as link, set up large foreign trade groups covering diversified sectors and departments. And the reform on managerial system of our overseas enterprises shall be carried on. And it is encouraged that the firms overseas invested by China's investors shall try to comply with international conventions in terms of property order, incentive mechanism and operation methods.

 f. Rationalize foreign investment structure.

 Adjustment on foreign investment structure shall be speeded up. In an attempt to adapt to the trend of the accelerating reshuffle of world economy and fast growing scientific and technologic development, the Guiding Catalogue of Encouraged Foreign Investment Industries will soon be drawn up by Guangzhou Municipality, encouraging investors to put funds to the sectors and fields most needed for development. Breakthroughs will be achieved in a step by step manner for foreign funds to be invested in service sectors like finance, insurance, medical care, education, consulting, tourism, etc.; continue to attract foreign funds to support urban key infrastructure and real-estate development; encourage foreign investment engaged in technological renovation of state-owned enterprises; expand the transaction of property right on a gradual basis, encourage foreign businesses and foreign invested enterprises to carry out M&.A, share purchase, contracting, leasing activities with state-owned small-and-medium sized enterprises. Foreign investment in agriculture is emphasized to develop hi-tech animal husbandry and crop farming, flowers and plants cultivating, refined processing of agriculture products so as to expedite the export of farm products.

 Aggressively solicit multi-national companies(MNCs) to invest in Guangzhou and

 in hi-tech projects.

 While foreign small-and -medium sized companies are welcome to invest here, great efforts will be focused on investment projects with science and technology content. To make it more attractive to foreign investors, measures will be taken to create all needed basic conditions within the boundary of policies, and in line with international conventions, enact implementing policies; establish venture capital aimed at foreign investors, encourage foreign involvement in scientific and technological projects by holding shares, provide access for the said projects to be listed abroad to raise fund; allow and permit M&As of companies invested overseas by domestic investors, so as to encourage investment and cooperation of consortiums and MNCs; cooperate with these companies to set up R&D centers in such key development areas as Guangzhou Economic and Technological Development District, Guangzhou Scientech Park, Software Park, and Bio-Island, etc.; actively push the conglomerates of Guangzhou to cooperate on high-tech projects with overseas counterparts, and to accelerate industry restructuring in Guangzhou.

 g. Enhance and improve foreign investment promotion.

 Renovation on investment promotion methods.

 Firstly, take the advantage of Guangzhou's sister-city relationship and economic cooperation sister-city relationship, to pin point the best way of cooperation through economic and cultural exchange. Secondly, select and appoint some prominent investment consulting firms, investment banks or intermediaries as agent to carry out investment promotion activities. Thirdly, in order to follow up and coordinate the potential or on-going key projects, set up investment promotion offices in key countries and regions. Fourthly, utilize fully the internet for investment promotion. Fifthly, give full play to the Convention of Overseas Chinese Scholars in Science and Technology ( Guangzhou), attracting returned overseas students to launch business ventures.

 Give full play to the leading role of the state designated development zones in the work of attracting foreign funds.

 First of all, the zones shall establish good image for attracting foreign investment, incorporate the methods of "introduction of advanced technology" and "development of new and high technology", and realize the balance of "economic growth point" and "industry with cutting edge technology". Secondly, the southeast opening area of Guangzhou shall be gradually built into a hi-tech industrial area with the support of Guangzhou Hi-tech Industrial Development Zone, a logistics center in the Guangzhou Free Trade Zone, so as to make the above zones truly ideal home for foreign investment. Finally, highlight the publicity of the Export Processing Zone as the new and hi-tech products exportation base. Efforts for investment promotion shall be highlighted too. Every measure shall be taken to introduce foreign investment and to regulate administration on export processing trade in order to attain a sound development.

 h. Full collaboration among Guangzhou, Hong Kong, Macao and Taiwan.

 Continue to stand by the guidance of "strengthen mutual benefits and achieve common prosperity" and to observe the principle of granting modest privilege. Business people from Hong Kong and Macao for trade and economic cooperation in Guangzhou will be accorded with courtesy and assistance. Scientific and technological cooperation kicked off among the three cities, will surely bring about an all-round collaboration on economy, trade and technology.

 Build Guangzhou into the main center of international trade by relying on the city's comparative advantages on land, R&D, human resources, communication, and geography and by taking advantage of the resources of finance, information, international marketing network enjoyed by Hong Kong and Macao. Stresses will be put on such areas as supplementary cooperation on tertiary industry, exploitation of tourism, introduction of international financial institutions with offices in Hong Kong, building up e-business network, cooperating on various forms of intermediaries, and actively carrying out the Implementing measures of the Law on Protection on Taiwan compatriots' Investment so as to promote trade and economic cooperation between both sides.

 i. Cultivate professionals of foreign trade and economic cooperation.

 Conditions will be created for foreign affairs offices, scientific research institutions, universities and colleges and the like to establish long-term ties and promote exchanges among themselves and with their overseas counterparts. Train more versatile professionals with advanced managerial skills and high ethics. Try all efforts to attract domestic and foreign experts, professors, scientist as well as CEOs from large enterprises to work in Guangzhou.