Honorable Vice Chancellor Tsui, Faculty and students,

Ladies and Gentlemen,

Good afternoon! Let me say, first of all, how much I appreciate Mr. Tsui's invitation. I have come to discuss with our young friends China's diplomacy. Recently in August, China held a Conference on Diplomatic Work. I will put my elaboration on China's foreign policy in the context of meeting. Then I will talk about some issues commanding wide interest, such as China-U.S. relations, China-Japan relations and DPRK nuclear issue.

I. China's foreign policy

Today's world is moving towards multipolorization, with greater economic globalization and rapid progress in science and technology. Peace, development and cooperation remain the theme of our times. However, destabilizing factors are also on the rise, which puts global harmony at stake. Among them are the combination of conventional and unconventional security threats, imbalance in global economic development and the widening wealth gap around the world. At the same time, China's fresh achievements in its reform and opening up brings it higher international standing and greater influence in for China, with robust communication and exchanges with the world in the political, economic, security, educational and cultural fields. Just as China's development needs to pay increasing attention to the challenges of the outside world.

In this context, China must employ the Scientific Outlook on its diplomacy. To be specific, we must put development at the centre. We must hold high the banner of peace, development and cooperation, and we must adhere to the independent foreign policy of peace and the path of peaceful development. We must adopt an inclusive strategy for win-win results, and stick to the concept of putting people first and diplomacy for the people. We must marshal domestic and international resources to fulfill our foreign policy goals on various fronts. Also, we must make the best of the period of strategic opportunities to uphold our sovereignty, security and development interests. Our goal is to create an enabling external environment to achieve lasting peace and common prosperity and universal harmony.

All in all, the ultimate goal of China's foreign policy is to safeguard world peace and promote common development. Actions speak louder than words. China will prove to the world that no matter how the international political landscape changes, China will always remain a driving force for world peace and common development.

We will centre our foreign policy on the following principles:

Strive to expand common interests with the United States, Russia, Europe, Japan and other major powers.

Address appropriately differences with other countries, and promote communication and cooperation to ensure steady progress in bilateral relations with these countries;

Adhere to the principle of "fostering good-neighborly and friendly relationship with neighboring countries" to enhance friendship and cooperation within the region;

Strengthen solidarity and cooperation with other developing countries;

Actively engage in multilateral diplomacy, uphold and advance our interests, and make our policy better understood, the country better appreciated by the world. By so doing, China can make its unique contribution to the world.

The China-Africa Cooperation Forum and the Third Ministerial Meeting have just concluded. President Hu Jintao, Premier Wen Jiabao and 48 heads of state or government, or head of delegations from Africa, attended the event. This Forum is unprecedented in the diplomatic history of China and Africa, in terms of scale, the level and number of officials present at the Forum. It is a fresh milestone.

On behalf of the Chinese Government, President Hu Jintao announced eight new policies and measures that China will adopt to assist Africa in its development; In the next 3 years, China will provide Africa withUS$3 billion concessional loans and US$2 billion export buyer credit on favorable terms; China-Africa Development Fund will be set up, with the total approaching US$ 5 billion; China will finance the construction of the Africa Union Convention Centre; China will write off all the interest free loans due by 2005 owed to it by the heavily indebted countries and least developed countries in Africa. Export items with zero tariff treatment from least developed African countries into China will grow from 199 to over 440. In the next 3 years, 3-5 overseas economic and trade areas will be set up in Africa, and China will train 15000 Africans from various professions. China will send 100 senior agricultural experts to Africa, and set up 10 agricultural technology demonstration centres and 30 hospitals. China will also provide 300 million yuan of gratis loans, which will finance the establishments of 30 anti-malaria centres and purchase of artemesinin. 300 young Chinese volunteers will go to Africa to help set up 100 schools in rural areas. By 2009, 4,000 person-time African students can have access to scholarship provided by the Chinese Government. China and Africa also agree to increase bilateral trade from the current 39.74 billion yuan to 100 billion. These initiatives have been highly commended by African leaders.

Recently, we took a major diplomatic move to assist and support Margaret Chan in her bidding for the WHO Director General post. This is the first time ever for a Chinese to run for the top job with an international organization after the establishment of the UN. For a successful outcome, the central government, the SAR government and Margaret Chan have worked in close coordination and conducted extensive lobbying. I guess it probably is no news to you that at the special session of the WHO Executive board, Margaret has come out as the only candidate recommended for the DG post. Let's send her our sincere congratulations. Her success is a credit to HK, and more so for China as a whole.

II. Several important issues in China's foreign policy

China-US relations

This topic never fails to catch attention. The United States is the biggest developed country and China is the biggest developing country, therefore, it is mutually beneficial for our two countries to maintain and develop sound relations, which will carry significant implications on advancing peace, stability, prosperity and harmony of the Asia-Pacific region and the world at large. This year has witnessed fresh progress in China-US relations.

The new developments include: First, close high-level exchanges. In April this year, President Hu Jintao paid a state visit to the US. President Bush and President Hu reached an important consensus on advancing China-US constructive partnership in the 21st century in all aspects. The two leaders hold the view that China and the United States are not only each other's important stakeholders, but also constructive partners. They agree to strengthen the China-US strategic dialogue, and enhance coordination and consultation on important bilateral and international issues. This serves as an important guidance for the healthy development of China-US relations in the immediate future. In July, the two leaders met again at the Summit of G8 and developing countries, where they reiterated the stated consensus. President Hu and President Bush will meet in the upcoming APEC informal leaders' meeting in Vietnam later this month. The two leaders also talked over the phone for many times to discuss and exchange views on bilateral relations and major regional issues, such as the DPRK nuclear issue.

Second, exchange and communication in various aspects are advanced. In the aftermath of President Hu's visit to the United States, both sides have made follow-up efforts to implement the important consensuses reached by the two leaders in areas of economy and trade, law enforcement, culture, education, health care, science and technology, energy, as well as those in bilateral relations and DPRK nuclear issue, Iran nuclear issue, anti-terrorism and other major international issues. In June, China was invited for the first time by the US side to observe US military exercise in Guam. In July, Vice Chairman Guo Boxiong of the Central Military Committee made a successful trip to the United States, which serves as a strong boost to bilateral military relations. In August, the second session of the China-US Global Issues Forum was held in Beijing. In September, Chinese navy fleet visited the US and held a joint research and rescue exercise with the US navy. US state secretary Rice visited China on October 20-21, during which both sides exchanged views on bilateral relations and DPRK nuclear issue and other major international issues in an in-depth manner.

It is noteworthy that in his visit to China late September, the new US Secretary of Treasury Henry Paulson initiated the establishment of China-US economic strategic dialogue for which he will lead for the US side. The Chinese side has also appointed a high level official, Vice Premier Wu Yi, to be the special representative for China. The dialogue will be held semi-annually to discuss bilateral and international economic strategic issues of common interest. China and the US have already established vice ministerial level strategic dialogue mechanism and two rounds of talks have been held. The US side's move to initiate a higher level economic strategic dialogue speaks volume for the high importance the US side attaches to China. By the end of this year, Treasury Secretary Paulson will come to China for the first round of dialogue. We wish it a success, as a good beginning is half success.

On the whole, China-US relations have maintained a steady growing momentum in recent years, with increasing communication between the two countries in political, economic, military, science and technological, cultural, educational and other fields. People to people exchanges are more robust. According to Chinese statistics, China-US trade volume reached US$211.6 billion in 2005. The US investors have over 49000 projects in China, with the accumulative volume of over US$51 billion. China has become US' third largest trade partner and the fastest growing export market, while the US is the second trade partner and largest export market for China. There are 33 pairs of sister states and provinces and 123 pairs of sister cities between the two countries. There are over 180,000 Chinese who have spent time studying in the United States at some point in their lives. Every year, there are over 1.75 million person times flying between the two countries, which translates into over 3,000 person-time air travels over the Pacific Ocean every day. There are 54 weekly flights between China and the United States. The number will be catapulted to 249 by 2010.

But of course, there are quite a few problems in China-US relations, some of which have been there for a while and some only flared up recently. The Taiwan issue is the most sensitive and the core problem between the two countries. Though President Bush has reiterated his government's adherence to the One China policy, the three joint communiques, and opposition to "Taiwan independence", the United States still is reluctant to scrap the Taiwan Relation Act, and continues to sell advanced weapons to Taiwan. This goes against the well-being of bilateral relations. Among the new problems are trade frictions. Trade deficit, IPR protection and RMB exchange rate, among other issues, are points of contention. Reasons behind these problems are complex. For the most prominent of all, the trade frictions, it can be attributed to the division of labor in an economically globalized world and the US restrictive policy on export from China. It takes two to tango, and we have to work together to solve the problems. I believe, as long as China and the United States bear in mind our long term and strategic interests, employ an outlook on bilateral relations that brings about win-win results, respect each other as equals, and appropriately accommodate our differences, China-US constructive partnership will be steered onto a path of steady progress.

China-Japan Relations

At the invitation of Premier Wen Jiabao, Japan's new Prime Minister Shinzo Abe, when only 13 days into office, paid a working visit to China. This is the first overseas visit of Prime Minister Abe. Though busy with the 16th CPC Congress, President Hu, NPC chairman Wu Bangguo and Premier Wen Jiabao all met and held talks with PM Abe. The visit is a success on the whole. Important consensuses were reached between the two sides on facing history squarely, looking into the future and maintaining high-level exchanges, properly dealing with issues related to Taiwan, promoting pragmatic cooperation in various fields and building a mutually beneficial relationship based on common strategic interests. The Chinese leadership has accepted in principle Premier Abe's invitation to visit Japan and agreed that both sides should have meetings regularly on occasions of international meetings. All in all, this visit marks a turning point in China-Japan relations. The ice has been broken, and it will be a great boost to the political, economic and cultural exchanges between the two countries.

The positive development in China-Japan relations does not come by easily. In the 3 decades since the normalization of China-Japan relations, bilateral friendship and cooperation have made substantial progress. Japan is an important trade partner of China, and the second largest source of overseas investment for China, while China is the biggest overseas market for Japan. Statistics have it that bilateral trade has grown from US$1.1billion when relations were just normalized to US$180billion last year. Accumulative investment by Japanese enterprises in China reached over US $53billion. There are over 228 pairs of sister cities between China and Japan, and 4.5 million person-time travelings between the two countries annually. China-Japan relations bring great benefits to the two peoples and contribute to the peace, stability and development of the Asia-Pacific and the world at large. But in the past five years, the former PM Koizumi had been intransigent, repeatedly paying homage to the Yasukuni Shrine, where class A war criminals were enshrined. That was a severe affront to the national sentiment of the Chinese people, including our HK, Macao and Taiwan compatriots. It also undermined the political basis of the two countries and led to a hiatus in high level exchanges. Unmistakably, this phenomenon was abnormal, which was against the interests of the two peoples, and the interests of the region.

In recent years, quite a few men from both China and Japan have shown their wisdom, and endeavor to salvage bilateral relations out of the difficulties. In September, I met in my office with the newly arrived Japanese Consul-General Mr. Sato Shigekazu. We exchanged views on bilateral relations. Though China-Japan political relations were in a halt, the Chinese leadership has been repeatedly stated that the policy of developing good-neighborly and friendly cooperation with Japan remains unchanged. As long as the Japanese leadership can make sensible judgment on issues that concern the Chinese people, Beijing will always keep its door open. After PM Abe was elected, he has made positive statements on many public occasions that Japan attaches importance to China-Japan relations; Japan will reflect on its historic responsibilities; and it will not glorify its class A war criminals. China and Japan reach the important consensus that we will work to overcome the political obstacles and facilitate the healthy and steady development of our bilateral relations. Finally,arrangement was made for the visit of a Japanese PM to China after a hiatus of 5 years.

In the aftermath of the visit, China-Japan relations are picking up more momentum. Recently, the speaker of Japan's Parliament Mad. Ogi Chikage led a delegation to China. She held talks with NPC Chairman Wu Bangguo, and had separate meetings with President Hu Jintao, CPPCC Chairman Jia Qinglin, and Vice President Zeng Qinghong. At the invitation of the LDP-CGP coalition government, Minister Wang Jiarui of the International Department of the Communist Party of China led a delegation to Japan for the second session of the "China Japan governing party communication mechanism". PM Abe met with the delegation. People to people exchanges between China and Japan are also vibrant.

During his meeting with PM Abe, Premier Wen Jiabao quoted a few lines from a famous ancient Chinese poet, "Water will, after all , make its way Eastward, despite the mountains standing in its way.(青山遮不住,毕竟东流去)"．Times have turned a new page. China-Japan relations are confronted with challenges and opportunities. To carry on our friendship conforms to the trend of the times and the aspiration of the two peoples, It also serves the fundamental interests of our two peoples and will be conducive to the peace and development of Asia. China is ready to work together with Japan in approaching China-Japan relations in a strategic and long-term perspective, working towards the goal of peaceful coexistence, lasting friendship, win-win cooperation and common development. We will work assiduously for the long term, healthy and stable development of China-Japan relations.

The Korea nuclear issue

The Korean Peninsular has been eventful these days. After the testing of missiles in July, DPRK defiantly test fired a nuclear missile in October. It aroused strong repercussions and condemnation from the international community. Some forms of sanctions have been imposed. Regional tension has aggravated and the world is watching closely.

It is known to all that the tension on the Korean Peninsula has been there for quite a while. Since the 1990's, the nuclear issue has become prominent in the region, triggering two major crises. For a peaceful solution to the issue, and the maintenance of security and stability of the region, the Chinese government has been actively mediating, and brought together DPRK, the United States, Russia, Japan and, of course, China to have the six-party talks in August, 2003. In September 2005, the first ever joint statement was produced since the launching of the talks. According to the statement, DPRK undertakes to renounce all its nuclear weapons and existing nuclear programmes, and return to the NPT at an early date; the US confirms that it has no nuclear weapons on the Korean Peninsula, nor does it have any intention to attack or invade DPRK with conventional or non-conventional weapons; DPRK claims that it has the right to peaceful use of nuclear energy, and other parties respect its right as such. In November 2005, the 4th round of talks was held in Beijing, which issued a Chairman Statement. All the participants reiterated the principle of "promise for promise, action for action", and full implementation of the joint statement, for an early realization of the denuclearization of the Korean Peninsula.

However, in the latter half of last year, the US accused DPRK of counterfeiting US currency and money laundering via Banco Delta Asia, which threatens the financial security of the US and thus imposed sanctions on DPRK. DPRK was offended by the decision and has asked US repeatedly to remove the sanction and have bilateral talks with it. It refused to go back to the talks unless the demands were fulfilled. The six party talks were in a halt again. Against this backdrop, N K made a desperate move by announcing on October 9th that it had a successful underground nuclear test.

On October 14, Security Council Resolution 1718 condemned the nuclear test and imposed embargo and sanctions on DPRK. The Resolution demands all UN members shall observe the embargo on sales of nuclear weapons and technologies, heavy conventional weapons and luxury goods to DPRK. Overseas assets of individuals and organizations in DPRK shall be frozen and travel restrictions on individuals would be imposed. The sanction will be modified, suspended or removed in line with DPRK's compliance with the treaty. A special committee of the Security Council is now in the middle of charting specific measures.

The Chinese government has always maintained the denuclearization of the Korean Peninsula and worked to preserve the peace and stability of the region. We are in favor of a diplomatic and peaceful solution to the issue. The Chinese side has been working extensively and unremittingly for this end. After the nuclear test, our FM issued a sober statement that China is firmly opposed to the test and will be active and responsible in carrying out diplomatic mediation, to avoid aggravation of the tension or getting out of control. President Hu talked with President Bush on the phone and sent a message later to President Bush via his special envoy State Councilor Tang Jiaxuan. China worked on US again when Secretary Rice visited China. State Councilor Tang Jiaxuan visited Moscow, DPRK and Washington as the special envoy of President Hu and relay President Hu's message to the leaders he met and exchanged views with them. During Tang's meeting with Chairman Kim Jong-il, Kim reaffirmed to him that DPRK would work for the six-party talks and the denuclearization of the Peninsula, so it didn't have a second nuclear test.

In the midst of intensive diplomatic consultations, China has stressed that despite the negative development of nuclear test, China remains unchanged in its policy and position. China still maintains that six party talks are a pragmatic solution, and we are firmly opposed to using force. At this crucial juncture, we must remain calm and avoid confrontation, which will worsen the situation and send things out of control. At the same time, we should adhere to the goal of denuclearization of the Korean Peninsula and restart the six party talks as soon as possible. China has and will continue to implement the Resolution faithfully. We do not see sanction itself as an end. Rather, what we do should serve the broader goal of achieving a diplomatic solution, preserving peace and stability of Northeast Asia. Parties concerned should not interpret the sanction at will or expand it. Especially, we should prevent confrontation, or the aggravation of the situation.

Intensive diplomatic efforts bear fruit. On October 31, based on the proposal of China, the heads of delegation to six party talks of China, the US and DPRK had an informal meeting in Beijing. They agreed to restart the six party talks at an early date convenient to all parties. This represents a turning point for a solution to the issue and preserving the peace and stability of the region. We hope the six-party talks can restart at an early date.

In conclusion, international situation is complex and volatile. We will confront many difficulties ahead. We are ready to work with our friends here to make contribution to the stability and prosperity of HK, the harmony of our country and the well being of the Chinese people.

Thank you.