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China-EU Relations and China's Current Developments and Policies
Speech by H.E. Mr. Song Zhe, Ambassador and Head of the Mission of the People's Republic of China at The Vrije Univesiteit Brussel
2008-05-16 00:00

Distinguished Rector Benjamin Van Camp

Distinguished Deputy Rector Rosette,

Distinguished Director Gustaaf,

Ladies and Gentlemen, Friends,

Good afternoon.

First of all, I would like to thank Rector Van Camp and Director Gustaaf for their kind invitation. I'm very glad to be here in the prestigious university of VUB and share with you my thoughts on China's reform and opening up and China-EU relations. I wish to take this opportunity to express sincere gratitude to VUB and all of you, for the contributions that you have made to enhance the mutual understanding and promote the friendly relations and cooperation between China and Europe.

Ladies and Gentlemen, before I make the formal speech, please allow me to inform you on the latest situation of the earthquake in China. As you know, on Monday, a powerful earthquake struck China's Sichuan province, causing tremendous loss of lives and property. As of this morning, the earthquake already claimed a total of 20,000 lives, and the death toll may rise even further.

The Chinese Government made the most rapid emergency response the world has ever seen. The Central Government promptly ordered deployment of rescue and relief operations. Premier Wen Jiabao flew to the disaster-hit area immediately and commanded the rescue operation in the field. Yesterday, Chinese President Hu Jintao arrived in Sichuan for field inspection and command of rescue operations. President Hu saluted the courageous rescuers for their hard work and expressed sympathy and solicitude to the victims of the earthquake. Officers and soldiers of the People's Liberation Army and armed police are marching over mountains to access the frontline of the disaster-hit area. At present, rescue operations are proceeding in a competent, orderly and effective way. The wounded people receive timely treatment and relief. We are confident that under the Chinese Government leadership, with joint efforts of the Chinese people and support from the international community, the Chinese people will prevail and re-emerge from the ruins.

Yesterday, I saw two heart-touching pictures on TV. One fireman was already exhausted after saving many lives, but he still pleaded to carry on and save more. Another scene was: China's CCTV news moderator shed tears in live broadcast when he said "why do we come and help each other, because this land and its people believe in care and help and we will see loved ones coming back." Even the strongest people cannot hold back tears before such outpouring of love. I shed tears too, because my love in this land is so deep.

The hearts of the Chinese people are with the earthquake, so are the hearts of the European People. Shortly after the event, many European leaders sent messages of condolence to Chinese leaders. European friends expressed care and support in various ways. As a Chinese saying goes, genuine friendship is tested by adversities. Disaster only brings even closer the hearts of the Chinese and European people and shows how deep is the friendly sentiments of the European people towards the Chinese people. Here, I would like to take this opportunity to express my heartfelt gratitude to all European friends for your care and support to China!

Now, let me come back to my speech.

After more than thirty years of development, China-EU relationship is now at a new point of departure. I have just returned from a travel to Beijing to prepare for the visit by President Barroso to China in late April. The visit was a success of important significance. The fact that President Barroso led a strong line-up with as many as 9 Commissioners was unprecedented. China attached great importance to this visit. President Hu Jintao met with President Barroso. Premier Wen Jiabao held talks with President Barroso and his delegation. China's Vice Premier Mr. Wang Qishan, together with EU Trade Commissioner Mr. Peter Mandelson launched the first China-EU High-level Economic and Trade Dialogue, which went on for a solid five hours and a half. Other Commissioners also held extensive and fruitful talks with their respective counterparts. The two sides had in-depth and frank exchanges of views on bilateral relations, climate change, sustainable development and other issues of mutual interests and reached many important consensus. This visit fully demonstrated that both China and the EU are committed to further developing their relations. China-EU relations are now transcending bilateral scope and acquiring more and more global strategic significance. China and the EU are facing important opportunities for furthering their cooperation.

On the other hand, with changes in the international situation and respective development in China and the EU, China-EU relations also face some new challenges, such as the issue of trade imbalance, which draws much attention in Europe, and more recently on Tibet. Some of these arise in the process of development when interests merge and meet each other. Others are due to lack of a full understanding and mutual trust. If not appropriately and promptly handled, these problems may produce negative impact on the healthy and smooth development of China-EU relations.

Under such circumstances, a major question is before us for serious consideration. That is, in what way are we going to seize the opportunities and dissolve the challenges? So that we can ensure the healthy and smooth development of China-EU comprehensive strategic partnership to the benefit of two peoples. Here, I would like to share with you some of my reflections.

Firstly,we should always consider and manage China-EU relations from a strategic perspective. China is the biggest emerging developing country, while the EU is the biggest and strongest union of developed countries. With deepening globalization, further development of China-EU relationship carries a special significance. As President Barroso rightly pointed out during his visit, we are faced with a series of global challenges, such as climate change, sustainable development, trade imbalance, international and regional security, energy, food and rising prices of raw materials and Africa development. 1.3 billion Chinese people and 500 million European people should take on more responsibilities and better address these global challenges through enhanced coordination and cooperation. As long as both China and the EU view and manage China-EU relations from such a strategic and global point of view, we will surely overcome the specific difficulties at present and ensure the right direction for the development of China-EU relations.

Secondly, we should always aim to further deepen China-EU cooperation in all fields. After 30 years of development, particularly over the past 10 years, China and the EU have already established a framework for all-dimensional, wide-ranging and multi-level cooperation, covering various field such as political, economic, financial, scientific, energy, cultural and education. Particularly, the economic relations between China and the EU have enjoyed a rapid growth. Our bilateral trade volume has maintained a more than 20% annual growth rate for the past five years. Last year it grew by 27% to exceed 350 billion US$. This has brought real benefits to the people in both China and Europe. According to the EU statistics, from 2001 to 2005, EU imports from China helped lower the inflation rate in the Euro zone by 0.2%. We estimate that China's export to the EU has helped EU consumers save 60 billion US dollars annually. In 2005, China's import from the EU created 1.5 million jobs in Europe. The recent launching of the China-EU High-level Economic and Trade Dialog is yet another important platform to expand and deepen our economic cooperation and trade. Under the principle of equality, common development, mutual benefit and win-win situation, we are ready to further broaden and deepen mutually beneficial cooperation with the EU in all fields.

Thirdly, we should always handle differences and disagreements properly. China and the EU are different in history, culture, ideology, political system and level of economic and social development. It is only natural for China and the EU to have some disagreements or even frictions. The course of development of China-EU relations over the past 30 years, particularly the continuous leaps that China-EU relations experienced during the recent years, have fully demonstrated that, as along as we conduct dialog and cooperation in the spirit of full equality and mutual respect, and respect each other's major concerns, China-EU relations will surely be able to develop in a sound and steady manner. China and the EU have established more than 40 consultation and dialog mechanisms, including annual summit, strategic dialog, human rights dialog and other political and sector dialogs. These dialogs have played important roles to enhance mutual understanding, resolve differences and promote cooperation. We are pleased to see that there are increasing number of people in Europe who want to know more about China and see more cooperation with China. I believe that, with more contacts between the peoples, with more understanding and mutual trust, with further deepening of dialogs and cooperation between China and the EU, we'll surely see less disagreements and more common interests between us.

This year is very important for China-EU relations. Following President Barroso's successful visit to China, we will host the Beijing Olympic Games in August, the 7th ASEM Summit in October, and there will be the 11th China-EU Summit in late November. I do hope that all these opportunities will be made full use of and further impetus will be given to bring the China-EU comprehensive strategic partnership to a higher level.

Ladies and Gentlemen,

This year marks the 30th anniversary of China's reform and opening up. Over the past three decades, China experienced wide and profound transformation in both economic and social dimensions. In short, China has transformed from a planned and semi-closed economy into a socialist market economy and an open economy. It has turned from inadequacy to a moderately prosperous society. China has also made important progress in reforming its political, cultural and social institutions. It is fair to say that reform and opening up enabled China to liberate the minds, to innovate, and achieve tremendous success in the modernization drive. From 1978 to 2007, China's GDP grew at an annual average of 9.7% to become the world's fourth largest economy. Foreign trade grew at an annual average of 17.4%, reaching 2017 trillion US dollars, the third largest in the world. China has attracted 83.5 billion US$ of foreign direct investment and made overseas investment of 18.7 billion dollars, both are the biggest amount for developing countries. Per capita consumption grew by 4.4 times and 4 times for urban and rural residents respectively. The rural population living in poverty dropped from 250 million to 20 million.

While advancing economic reforms, China is also exploring and advancing political reforms. In the past three decades, efforts were intensified to build socialist democracy and the rule of law, to enforce democratic elections, democratic decision-making process, democratic administration and supervision according to law. The people's rights to be informed, rights of participation, rights of expression and supervision were guaranteed. In 2004, the National People's Congress enshrined in the Constitution that the "State respects and protects human rights". In essence, China has made all these economic and social progress due to the fact that it has found the right path of development which suits China's actual conditions and is consistent with the trend of development in the world.

At the same time, I have to say frankly, that China is still a developing country. China's situation of a big population, weak foundation and underdeveloped productivity has not fundamentally changed. China's per capita GDP still ranks below the world's one hundred. In particular, there are quite serious imbalances in development between the urban and rural areas and among different regions. For example, per capita GDP in some provinces can be ten times as much as that in other provinces. And even within the same province, there is also a quite big disparity. To achieve the goal of national modernization, there is still a long way to go. We often say that, for China to become a moderately developed country, it will still need the efforts of several generations of people to come.

The general situation of China's current economic development is good. The growth of national economy is sustained and rapid. Operation in the fiscal and financial sector is stable. Growth in foreign trade is steady. And improvement of people's living standards is constant.

However, there are also problems in the economic development. For instance, economic growth rate is excessively fast. Structural problems are quite prominent. The mode of development is extensive and inefficient with too big costs of resources and environment. There is very big pressure of price increase. And factors are increasing that might lead to unstable, uncoordinated, imbalanced and unsustainable development. Institutional barriers have not been fundamentally removed. All these problems have already drawn high attention of the Chinese Government.

In order to solve these problems and achieve sound and fast economic development, China will further implement the scientific outlook on development, innovate the development model and pursue a people-oriented development strategy for comprehensive, coordinated and sustainable development. At present and in the coming years, we will make efforts in the following areas:

First, work vigorously to maintain a fast yet steady economic development. For the Chinese Government, the primary task of macroeconomic regulation at this moment is to prevent fast economic growth from becoming overheated growth. It is necessary to appropriately address problems such as excessively fast fixed asset investment, excessive supplies of money and credit, and excessively large trade surplus and prevent the overall price level from increasing too rapidly. We will continue to well manage the relations between economic output and economic structure, investment and consumption, domestic demand and international demand. By strengthening macroeconomic regulation, the giant vessel of Chinese economy will surely continue its steady yet rapid voyage.

Secondly, intensify efforts to change the pattern of economic development. We will make more efforts to further improve the quality and efficiency of economic development, pursue a new path of industrialization, improve and upgrade industrial structure. We will put promotion of independent innovation as the central link to change the pattern of development and raise the overall level of science and technology and its industrial application.

Thirdly, vigorously promote coordinated development by making overall plans and considerations. It will be a major strategic task for the Chinese Government to address imbalances and uncoordinated development. More emphasis will be given to ensure coordinated development of urban and rural areas, different regions, economy and society, man and nature, and domestic development and opening-up. The Government will continue to take effective measures to gradually reverse the trend towards increasing disparity between industry and agriculture, urban areas and rural areas and different regions to achieve social equity and justice.

Fourthly, vigorously build a resource-saving and environmental-friendly society. The Government will give more emphasis to resources saving and environmental protection and vigorously pursue a conservation-oriented, circular and environmental-friendly economy as well as intensive and clean development. We will unremittingly promote energy saving and emission mitigation to ensure that the set targets will be met. As a responsible country, China takes seriously climate change and will enhance our capacity to respond to climate change and work with the rest of world to mitigate the impact of climate change.

Fifthly, pay closer attention to improve people's lives. It is the aim and outcome of the work of the government to fulfil, safeguard and advance the fundamental interests of the overwhelming majority of the people. Focusing on improving people's lives, the Chinese Government will comprehensively advance the building of the harmonious society. We'll create more job opportunities, establish a social security system covering both urban and rural residents, improve conditions of housing, transportation and living, so that all the people will share the benefits of reform and opening up.

Sixthly, vigorously advance reform and institutional innovation. The Government will stay committed to the direction of market economy reform and focus on institutional innovation and mechanism innovation, and accelerate reform in all fronts. The political reform is a key component of China's overall reform and will be advanced pro-actively and steadily. People's democracy and the rule of law will be further strengthened.

China's economy has been in rapid development for almost 30 years. This is indeed a miracle. China's development has not only greatly improved the material and cultural lives of the Chinese people, but also made an important contribution to global economic stability and prosperity. By putting together global resources, China produced many high-quality and inexpensive commodities for the benefit of consumers all over the world. Already, China is the world's third largest importer which stimulates global economic development.

Will this momentum of China's development continue? I think it's possible. Because peace, development and cooperation are the trend of today's world. We can strive for a longer period of peaceful international environment. Moreover, China is equipped with the conditions for further economic development. These include material and technological foundation, a growing market demand of more than 1 billion people, an abundant workforce whose overall quality is constantly improving and a stable social and political environment. While we may encounter difficulties, risks and challenges on the road ahead, there is no doubt that China has the confidence, ability and ways to overcome any difficulties and obstacles and continuously push forward our modernization drive.

Ladies and Gentlemen,

China cannot achieve its development in isolation of the world, nor will the world sustain its development in the absence of China. Over the decades, by learning and drawing upon the experience of, and strengthening economic and technology cooperation with other countries, China has been able to attain its economic and social development. And this in turn has provided a source of driving force and energy to the world.

China will unswervingly pursue a path of peaceful development and a mutually beneficial and win-win strategy of opening up. We will work for a peaceful international environment for our development, and safeguard world peace and promote common development through our own development. China's development is good for world peace, and will not pose a threat to any other country. Facts have already proven and will continue to prove, that an open, prosperous, strong and stable China will make even greater contribution to world peace and human progress.

Thank you for your attention. Now I would like to take your questions.

Q & A

Q: Recently, there is criticism on China on trade, human rights and other issues in Europe. I found in my recent trip to China there was disappointment in Europe, particularly after what happened during the Olympic torch parade. What is your view? How do the young people in China look at EU?

A: I have been here in Brussels for only two months, yet I find that the Chinese people have more knowledge about Europe than European people do about China. Chinese people more tend to approach others in an understanding and tolerant way. As I said in the speech, the fact that President Barroso led as many as nine Commissioners in his recent visit to China speaks of the range of China-EU cooperation. The closeness of China-EU relations is unprecedented and it is only natural for there to be differences or even frictions. We always stand for strengthening exchanges, dialog and consultation to deepen mutual understanding and it is important to adhere to the principle of mutual respect for each other's social systems, development models and national conditions, and treating each other as equals. China always supports EU integration. We hope to see a more active role of the EU in the world. During President Barroso's visit, leaders of both sides stressed the willingness to enhance the China-EU comprehensive and strategic partnership. In an age of globalization, for China and EU's development, and for meeting global challenges, such close cooperation between China and the EU will be indispensable. The question is not whether China-EU relations should be enhanced, but in what way can we further promote such a relationship. China and the EU should work hand in hand and use their respective strengths to promote the healthy and steady development of their ties and contribute more to world peace and prosperity.

I have to say frankly that recently, in some parts of Europe, especially some NGOs and media made one-sided and negative coverage on Tibet. Plus the acts of violence during the Olympic torch parade, all this give young people in China doubts and even disappointment toward Europe. They are thinking whether today's Europe remains the Europe of freedom, democracy, objectivity, justice and tolerance. With China's reform and opening up, the young generation wants to integrate into the world and embrace Europe. At the same time, they are also watching and thinking with what attitude Europe will approach China and the Chinese people.

Q: On the high-level economic dialog between China and the EU. China-US economic dialog is held every six months while China-EU economic dialog only once a year. Is the United States still more important than Europe for China? What will be the agenda for the upcoming China-EU summit in November?

A: China-EU High-Level Economic and Trade Dialog is an important platform aimed at promoting and developing economic cooperation. Similar mechanisms exist between China and the US, China and Japan. The EU is the biggest trading partner of China. We attach value to economic cooperation and trade with the EU and the EU is always one of our priorities. Our dialog mechanism is the highest in level. China and the EU have an annual Summit mechanism, which China does not have with other country. The annual summit not only discusses political issues, but also holds extensive and in-depth discussion on economic cooperation and trade. In fact, the November summit to be held in Lyon, France, will be the 11th China-EU summit. It will see in-depth discussion on ways to further enhance political mutual trust and further expand the broad economic cooperation between China and the EU, such as on climate change and sustainable development.

Q: Some time ago during the period of SARS, people had doubts on China in terms of transparency. China's role in Africa has made some people worried, perhaps also due to lack of transparency. Can China have more transparency in terms of Africa?

A: On the whole, China and the EU have consistent goals on Africa, which is to promote peace, stability, prosperity and development in Africa. In recent years, China and the EU have established consultation mechanisms on Africa, which held initial discussions on dialog and cooperation on Africa. The Special Envoys on Africa of China and the EU maintain frequent and close contacts. In fact, Director General of the African Department of the Chinese Foreign Ministry will come to Europe in June for a round of dialog with the EU counterparts. We are prepared to continue to strengthen dialog and cooperation with the EU on Africa in an open and constructive spirit.

Q: China is a developing country but it is also a big donor country. What is China's approach in this respect?

A: While developing itself, China stands for common development of the world. Therefore, although we are a developing country, still we have done what we can to assist other developing countries. Over the years, our assistance focuses on infrastructure, schools and hospitals. In 2000 and 2006, China twice cancelled on a large scale matured debts of African countries. In providing assistance, we adhere to two principles, namely non-interference in other's internal affairs and focus on enhancing the self-development capacity of recipient countries.

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