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China set for smiles at APEC
From CNN Correspondent Lisa Barron
HONG KONG, China (CNN) -- A flurry of big deals have been signed between Chinese and U.S. companies ahead of Friday's meeting between U.S. President George W. Bush and his Chinese counterpart Jiang Zemin. The $4.7 billion dollars worth of deals were all signed in New York ahead of Friday's Texas summit. From there, Jiang will head to the annual meeting of the Asia Pacific Economic Forum (APEC) -- this year in Mexico.
As the world's fastest-growing economy, China is one of the hottest destinations in the world for foreign direct investment (FDI). That is good news for the rest of Asia. When China's leaders take their places at the APEC summit, they may be the only ones smiling about the subject at hand. Unlike many of APEC'S 21-member economies, China's growth is on the fast track. While its neighbors struggled through the global slowdown in 2001, the mainland managed growth of seven percent. This year will be even better. "The fuel comes from two broader factors," Yiping Huang of Salomon Smith Barney told CNN. "First it is opening up to the global external markets, so you see both a dramatic growth of exports and a massive inflow of foreign direct investment. These are really driving growth". Record figures
Foreign direct investment soared more than 22 percent to nearly 40 billion dollars in the first nine months. That figure could hit a record 55 billion dollars for the entire year. Until recently the economies of Southeast Asia saw the influx of FDI into China as a threat. But with China's entry to the World Trade Organization and falling demand overseas, trade with the mainland is now seen as the key to economic success. "The strong domestic economy in China has been quite a welcome relief for many of these economies in Asia as they are becoming desperate as the traditional markets such as the U.S., Europe, and Japan might be in an economic slowdown," Goldman Sachs' Fred Hu told CNN. Sales of materials and component parts to China are soaring -- low prices and cheap labor making the country of 1.3 billion a workshop for the world. In the first eight months, South Korea's exports to China jumped 42 percent, Malaysia's grew 38 percent and Singapore's 31 percent. In Taiwan, exports to the mainland shot up more than 170 percent in September alone after the government eased restrictions on investing in its political rival. China still has its share of structural problems, but most economists remain optimistic.
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