Vigorously Promoting Comprehensive Strategic Partnership

Between China and the European Union

                                                                                Speech by H.E. Wen Jiabao

At the China-EU Investment and Trade Forum

Brussels, 6 May 2004

Your Excellency President Romano Prodi,

Ladies and Gentlemen,

I am very pleased to attend this Investment and Trade Forum jointly sponsored by China's Ministry of Commerce and the Directorate General for Trade of the European Commission. Twenty-nine years ago today, China and the European Economic Community established official relations. The gathering here of so many businessmen on this auspicious occasion to discuss the vital matters of development and cooperation, is indeed a vivid illustration of the new dimension of China-EU ties.

During the past 29 years, China-EU relationship has withstood the test of time and evolving international situation, and has embarked on a course of mature, sound, and steady expansion. It is a shared view of the two sides to work for a comprehensive strategic partnership. By "comprehensive", it means that the cooperation should be all-dimensional, wide-ranging and multi-layered. It covers economic, scientific, technological, political and cultural fields, contains both bilateral and multilateral levels, and is conducted by both governments and non-governmental groups. By "strategic", it means that the cooperation should be long-term and stable, bearing on the larger picture of China-EU relations. It transcends the differences in ideology and social system and is not subjected to the impacts of individual events that occur from time to time. By "partnership", it means that the cooperation should be equal-footed, mutually beneficial and win-win. The two sides should base themselves on mutual respect and mutual trust, endeavour to expand converging interests and seek common ground on the major issues while shelving differences on the minor ones.

Committing themselves to developing such a new type of relationship at the beginning of the 21^st century not only serves the mutual interests of China and the European Union but also contributes to peace, stability and development in our respective regions and the world at large.

The comprehensive strategic partnership between China and the EU is natural development necessitated by the facts of life and thus enjoys a solid foundation. First, the international situation has undergone stupendous and profound changes. Peace and development being the theme of the times offers a favourable international environment for the substantial expansion of China-EU relations. Second, both China and the EU follow courses of development suited to their characteristics and circumstances. The EU has continuously pushed for integration through union; while China, thanks to reform and opening-up, has moved into a new stage of building a well-off society in an all-round way. The two sides had no conflict of fundamental interest, and rather see their common interests growing steadily. Third, China and the EU are highly complementary economically. As the world's largest developing country, China enjoys a huge market potential and abundant human resources, and is advantageously placed in receiving international transfers of industries and technologies. The EU, on the other hand, is the world's largest developed economy with ample capital, advanced science and technology and a high degree of internationalisation. Such a complementarity prepares a solid groundwork for mutually beneficial cooperation between the two sides. Fourth, both China and the EU boast ancient histories and brilliant civilizations. Recognizing each other's cultural identity and conducting cultural exchanges of various forms provide a significant bridge for closer bond of China-EU relations. Fifth, the two sides have already accumulated sufficient experience in properly handling the disputes and ironing out their differences. Opting for dialogue and resisting confrontation not only reflects the existing maturity of the relationship but ensures its further healthy development in the days ahead.

My Government has all along viewed and cultivated China-EU relations from a strategic plane. Since the 1990's, Chinese leaders, such as Jiang Zemin and Hu Jintao, have visited EU member states on many occasions in an effort to advance the relations between China and the EU. We are pleased to note that since May 1, the EU has 25 members. The EU enlargement will make a key impact on European configuration and even the entire pattern of international relations. China has always supported European integration and looks forward to a more important role of the EU in European and international affairs. It is our hope that an enlarged EU would contribute to greater prosperity and stability in Europe and generate more opportunities for deeper ties between China and the EU.

A stronger China-EU comprehensive strategic partnership requires that we keep an eye on our long-term goals and tackle practical issues by planting our feet solidly on the day-to-day reality. Trade and Economic cooperation is part and parcel of China-EU relationship. To further expand China-EU economic ties, I would like to share my five-point recommendation as follows:

First, to make a bigger "cake". Both sides must work hard to tap their trade potential, expanding the trade scale and increasing the trade volume. At last year's China-EU Summit in Beijing, I proposed that our trade reach US$200 billion by the year 2013. Now this goal looks a bit too conservative, for our trade this year may likely top US$150 billion. It may not be a bad idea to have some leeway nonetheless.

Second, to step up cooperation in hi-tech area. The two sides should, while promoting cooperation in traditional areas of products procurement, technology transfer and investment, make vigorous efforts to push for joint R&D and cooperation in hi-tech area, with a view to developing internationally competitive products and opening up new markets.

Third, to promote cooperation among small and medium-sized businesses. While further enhancing existing cooperation among large enterprises, the two sides should help the small and medium-sized businesses to emerge as a vital player in China-EU economic partnership by putting in place necessary cooperation platform, providing information, financing and other needed services, and giving a full scope to the role of intermediary agencies.

Fourth, to remove out-dated barriers and obstacles. China will continue to faithfully honour its WTO commitments, stepping up protection of intellectual property rights and increasing the fairness and transparency of its trade and economic policies, laws and regulations. The EU is also expected to ease its restrictions on hi-tech exports to China, and lift its import bans that are inconsistent with WTO rules.

Fifth, to build and improve the consultation and dialogue mechanisms. The existing mechanisms, the Joint Committee on Economic and Trade Cooperation included, should be given full scope, with a view to properly addressing the problems, differences and other concerns of the two sides through friendly consultations. Prior to the adoption of major measures that may bear on the interests of the other side, greater attention should be paid to keep the partner informed and consulted so as to avoid complication of the problems. In addressing economic and trade issues at the multilateral level, consultation and coordination should be strengthened.

Ladies and Gentlemen,

It has been 25 years since we in China adopted the policy of reform and opening-up, and 3 years since our accession to WTO. Everyone who has been to China in these years could bear witness to the enormous economic and social transformation taking place there. In China, a socialist market economy has been basically put in place. The non-public sector of the economy, such as self-employed and private businesses, has grown rapidly, taking up a considerable share of the overall national economy. The pricing of more than 90% of the goods produced is done by the marketplace. The relevant policies, measures, laws and regulations are completely consistent with WTO, and nearly 3000 pieces of such documents have been made public after amendment for immediate implementation. With the transformation of government functions and deepening structural reform, the enterprise has become an independently managed economic entity. In addition to enjoying national treatment, China-based foreign-funded firms are entitled to, for example, tax privileges. China follows a market-based, single and regulated floating exchange rate regime, and is committed to improving its exchange rate forming mechanism. With the social security coverage expanding steadily, the rights and interests of working men and women in the areas of old-age pension, work-related injuries, medicare, unemployment benefits and others have been effectively guaranteed. I hope that our friends from the EU will take a full note of these facts, and recognize China's status as a full market economy at an early date. This would undoubtedly boost a fresh round of expansion in China-EU trade and economic cooperation.

At present, China's economy has entered the upward leg of another growth cycle. Economic restructuring is accelerating. The country's consumption pattern, driven by robust housing and car sales, has come into a new stage, allowing the overall national economy to grow at a fast and sustained speed. In 2003, with a GDP that grew by 9.1%, China became the world's 4^th largest trader and 3^rd largest importer. In the first quarter this year, our economy reported a 9.7% growth rate. It is estimated that by 2020 China's GDP would top US$4 trillion, with an annual import amounting to US$1 trillion. All in all, the rapid development of China's east coast, the advancement of China's west development strategy, the rejuvenation of Northeast China and other old industrial bases, and the 2008 Beijing Olympics and Shanghai World Expo 2010 would generate immense business opportunities for the business communities of the European Union.

China and Europe need each other in their respective pursuits of development. Right now, China-EU relationship finds itself at a fresh starting line, with a great deal to build upon and even more to look forward to. China and the European Union are made good and promising partners in trade and economic cooperation. As an old Chinese saying goes, "A truly wise man is apt at seizing opportunities rather than simply working out plans." I suppose none of us here would let go good opportunities, and I am sure you will strive for greater trade and economic cooperation between China and the EU and make a contribution to stronger China-EU comprehensive strategic partnership.

Thank you all.