Remarks by Commissioner Xie Feng at 2018 Plenary Session of Hong Kong-Europe Business Council

Sharing China Opportunities through Opening up and Win-Win Cooperation

Remarks by Xie Feng, Commissioner of the Ministry of Foreign Affairs of the People’s Republic of China in the Hong Kong SAR at Plenary Session of Hong Kong-Europe Business Council

30 April 2018

Chairman Victor Chu,

Chairman Paul Achleitner,

Ladies and Gentlemen,

  I want to thank the Hong Kong-Europe Business Council for inviting me to attend the plenary session. The Council, established shortly after the establishment of the Hong Kong SAR, is well-reputed as an important platform for high-level dialogue between Hong Kong and Europe on trade and investment cooperation. I wish to take this opportunity to pay tribute to all the business leaders for your outstanding work over the decades.

  The year 2018 marks the 40th anniversary of China’s reform and opening up. Four decades is but a fleeting moment in the long history of China. Yet within this short span, China has conducted its “second revolution”. The reform and opening up has deeply changed the fate of China, and has its impact on the entire world.

  Reform and opening up have brought a new outlook to China. Over the past 40 years, China has seen its GDP growing at an average rate of 9.5%, and its foreign trade increasing at 14.5%. It has become the world’s second largest economy, the largest industrial country, the largest cargo trading nation, and the largest holder of foreign exchange reserve. China’s per capita disposable income has grown at more than 7% annually. Over 700 million Chinese people have been lifted out of poverty, accounting for more than 70% of the poverty reduction worldwide. The Engel's coefficient dropped from over 60% in 1978 to 29% last year, falling for the first time into the 20% to 30% “well-off range” set by the United Nations.

  Reform and opening up has enabled China to find a development path that suits itself. Over the four decades, the Chinese Communist Party has encouraged the people to free the minds and seek truth from facts, clearing all outdated mindsets and institutional barriers. The Party has taken a coordinated approach in making economic, political, cultural, social and ecological progress, and has successfully blazed a path of socialism with Chinese characteristics.

  As one saying goes, only the wearer of the shoes knows if they fit or not. Likewise, only the people of China can best tell if the development path is successful or not. The path of Chinese socialism has greatly enhanced the people’s happiness and sense of fulfillment. It has received wide participation, high recognition, and sincere support from the people. We demonstrate, with our own success story, that there is not just one road to modernization. In the new era, China will remain committed to this path.

  The reform and opening up have also brought extensive benefits to the world. With its rapid growth, China's economy has served as an important stabilizer and driving force for the world economy. This is reflected in our role in dealing with the Asian financial crisis and the international financial crisis, and the 30%-plus contribution China has made to the world's economic growth for many years. The hard-working Chinese people provide the global customers with a large number of inexpensive quality goods, helping other countries to rein in inflation and improve people’s living standards. Over the past four decades, China’s imports have increased 170-fold, reaching 1.85 trillion US dollars last year, supporting tens of millions of jobs worldwide. Chinese companies have actively made investment overseas. By the end of 2016, they set up 37.2 thousand businesses in 190 countries and regions, with a total investment stock of 1.36 trillion US dollars. The Belt and Road initiative proposed by China is becoming one of the most popular international public goods.

  Ladies and Gentlemen,

  While China is commemorating the 40th anniversary of reform and opening up, the world is facing the choices of moving forward with greater openness, or backpedalling through isolation. At this critical moment, President Xi Jinping sent a very clear message at the Boao Forum for Asia on April 10. He pointed out that economic globalization is irreversible. The world has already become a global village where our interests are intertwined. We live at a time with an overwhelming trend toward peace and cooperation, openness and connectivity and reform and innovation. It is clear that openness brings progress, and seclusion leads to backwardness.

  President Xi solemnly announced at the Boao Forum that China’s door of opening-up will not be closed and will only open even wider! In this new era, the Chinese nation will continue to improve itself through reform. We will stay committed to advancing reform in all respects, and prevail over whatever challenges that may lie ahead. We will tackle longstanding problems with courage and resolve, and break the impediments of vested interests to see the reform through. President Xi also announced that China will significantly ease market access, create a more attractive investment environment, strengthen protection of IPRs, and actively expand imports. This is China’s choice, as a major country ready to undertake its responsibilities. It marks the start of the updated version of China’s reform and opening up program.

  The opening up in the new era is conducted by China at our own initiative. Anyone who knows about the history of China's reform and opening up would be aware that in the past 40 years, China has steadily promoted its reform and opening at its own pace by following its own national conditions, from rural to urban areas, from pilot to large-scale programs, and from economic restructuring to comprehensive reforms. The 19th National Congress of the Party last October reaffirmed China’s commitment to the basic policy of opening up and development through greater openness. Last December, the Central Economic Work Conference set the goal of achieving a new pattern of all-round opening up, orderly easing market access, greater IPR protection and promotion of balance in trade. In March this year, the government work report called for further improvement of the scope and level of opening up, building a world-class business environment, actively expanding imports, and promoting trade and investment liberalization and facilitation. China's new round of reform and opening up is by no means the result of outside pressure. Rather, it is China's own initiative aimed at high-quality development, and a preplanned arrangement for realizing the "two centennial goals”.

  The opening up in the new era is a more comprehensive campaign conducted at a higher level. China will fully open the general manufacturing sector. The current restrictions in automobiles, ships, and aircraft will be further eased. We will further open services such as telecommunications, education, medical care, and old-age care, and in particular the financial sector. China will steadily expand the building of pilot free trade zones and promoting the existing practices. China will gradually explore the free trade ports, a pattern with highest level of openness in the world today. We will strive to create a good business environment, fully implementing the management system based on pre-establishment national treatment plus negative list, and increase the IPR protection. China will continue to develop the Belt and Road initiative through joint consultation and collaboration with other parties, sharing the fruits together. We will remain committed to both attracting inbound investment and making outbound investment.

  The opening up in the new era is a vigorous campaign that wastes no time. President Xi stressed at the Boao Forum that the major opening up initiatives will be implemented sooner rather than later. Just one day later, Governor Yi Gang of the People's Bank of China released the timetable for the opening of the financial sector. Most of the measures in the six areas will be implemented by the end of June this year. Three days later, at the celebration of the 30th anniversary of the Hainan Special Economic Zone, President Xi announced the decision to support a Free Trade Zone in the entire Hainan Island and help Hainan to gradually experiment and steadily promote the development of a free trade port with Chinese features. A week later, the National Development and Reform Commission announced that priority will be given to opening the manufacturing sector in the new negative list of foreign investments, and a transitional opening up period will be rolled out for the auto industry. All restrictions will be cancelled when the transition ends in five years’ time.

  The opening up in the new era is like a two-way street. While announcing China’s opening up measures, President Xi also raised hope that foreign governments will improve protection of Chinese IPRs, and developed countries will stop imposing restrictions on normal and reasonable trade of high-tech products. The Chinese side is willing to open its doors wider. We also hope that foreign countries will open their doors in return.

  Recently, certain country has frequently raised trade frictions in an attempt to “put its interests first" by adopting protectionism, and become a winner that takes all. This approach goes against the trend of the times and the existing rules of international trade. It turns a blind eye to the consensus of the international community and the common interests of all countries. As a result, it has been opposed by more and more countries, including its own people with a vision. I have noticed that the EU expressed open support for free trade and opposition to any trade measures breaching the WTO rules. In his speech to the US Congress, French President Emmanuel Macron said that we can choose isolationism, withdrawal and nationalism, but closing the door to the world will not stop the evolution of the world. The only choice is to strengthen cooperation.

  Since its accession to the WTO, China has earnestly and comprehensively fulfilled, or even over-fulfilled, its WTO commitments, strictly honored its membership obligations, and complied with the WTO rules. We have always been an active participant, a firm supporter, and an important contributor to the multilateral trading regime. Certain country expects China to open further, and at the same time insists on “putting its interests first” and even threatens to launch a trade war. China's position is very clear. We are opposed to such move and we are not afraid. We are open to dialogue. We firmly believe that multilateralism will eventually overcome unilateralism and that free trade will eventually triumph over protectionism.

  Ladies and Gentlemen,

  Over the past 40 years, Hong Kong has played a unique role and made historic contribution in the national reform opening up process. For many years, Hong Kong has been an important window for the whole country’s opening to the outside, and serves as the important channel for attracting foreign investment, technology, and advanced management expertise. Hong Kong also seized the historic opportunity of national reform and opening up to achieve its own prosperity. Today, Hong Kong, as an important international financial, shipping and trading center, remains as the largest source of FDI to the mainland. It is the preferred testing place for the country’s opening up policies such as the internationalization of the Renminbi, and the city is the best springboard for mainland companies to go global. Hong Kong continues to enjoy its advantages thanks to its sound fundamentals.

  Over the past 20 years since its return to the motherland, the principles of "one country, two systems", "Hong Kong people administrating Hong Kong" and a high degree of autonomy have been effectively implemented. There has been a significant improvement in the performance of the SAR Government, the level of the rule of law as well as other indicators. Hong Kong has been rated as the world’s freest economy for 24 consecutive years. Its residents enjoy more extensive democratic rights and freedoms than any time in history. The 19th National Congress of the CPC listed "one country, two systems" as one of the basic strategies for developing socialism with Chinese characteristics in the new era. The full and faithful implementation of "one country, two systems" and Hong Kong and Macao's long-term prosperity and stability are the indispensible part of our endeavor for national rejuvenation. As pointed out by President Xi, the growing prosperity of the motherland gives Hong Kong more courage to guard against turbulence and overcome challenges, and it provides the city with more opportunities to explore new growth drivers and open up new development space. The reform and opening up campaign in the new era covers Hong Kong, and needs its participation. In turn, the city will embrace more opportunities to excel.

  Over the past four decades of reform and opening up, China also deepened its win-win cooperation with Europe. In 1978, the trade in goods between China and the EU states only stood at four billion U.S. dollars, and trade in services and two-way investment were almost zero. We are now seeing over 600 billion U.S. dollars of trade in goods, over 100 billion U.S. dollars of service trade, and nearly 200 billion U.S. dollars of two-way investment. China has benefited from the investment and trade with the EU, and also provides important opportunities for the EU development. China's further deepening of reform and opening up means more investment opportunities for European companies, better business environment, more exports to China and better prospects for profitability. At this critical juncture when economic globalization and trade liberalization are confronted with headwinds, China and the EU should join hands and unequivocally say "NO" to unilateralism and trade protectionism. We should jointly advocate open and win-win trade concepts, and cooperate more with greater openness, safeguard the rules-based multilateral trading regime and jointly nurture the recovery momentum of the global economy.

  Ladies and Gentlemen,

  The Commissioner’s Office of the Foreign Ministry and the Hong Kong SAR were established on the same day. For more than 20 years, one of our important responsibilities has been to help Hong Kong expand its international cooperation. Since last year, we have advocated and built a tripartite cooperation platform involving the mainland, Hong Kong and countries along and relating to Belt and Road. We hope that through this platform, we would combine the capital, technology, production capacity, and development experience of the mainland with Hong Kong’s geo-advantages, its financial strength, international connections and professional services, plus the resource endowments and development needs of the Belt and Road countries. In that way, the three parties may draw on each other’s strength, develop in a coordinated fashion and achieve synergy through win-win cooperation. One plus one plus one will have a greater effect than three. We have already helped mainland provinces, including Sichuan, Shaanxi, Jiangsu, Inner Mongolia and Gansu to hold the promotional conferences in Hong Kong on Belt and Road international cooperation. We have also organized visits to the Guangdong-Hong Kong-Macao Greater Bay Area and Sichuan Province for representatives of foreign consular corps, including those from European consulates, foreign chambers of commerce, and foreign media in Hong Kong. We helped set up a variety of platforms for cooperation dialogue and business matchmaking for the three parties and achieved positive results.

  The Hong Kong-EU Business Council has brought together many business leaders from the two sides. It has its unique advantage in conducting the tripartite cooperation. We welcome your active participation in the Belt and Road initiative and the development of Guangdong-Hong Kong-Macao Greater Bay Area, and participate in China’s reform and opening up process. We hope that you will find more opportunities for cooperation and development out of the rapid growth of Hong Kong and the mainland and from their deep integration.

  Finally, I wish the 18th Plenary Session of the Hong Kong-EU Business Council a full success. I also wish your business even greater prosperity.

  Kung hei fat choy!

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