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Remarks by Chargé d'Affaires Mr. Zhang Lirong at the Dinner on the Occasion of the Second Europe China Forum
Where Is China Heading?


Respected Mr. Eyskens,

Duke of Arenberg,

Secretary General Merritt,

Ladies and Gentlemen,

I am very pleased to attend this dinner on the occasion of the second Europe China Forum. First, on behalf of the Chinese Mission, I wish to express our heartfelt appreciation to the Arenberg Foundation and Friends of Europe for their contribution towards this successful forum.

During the candid and in-depth panel discussion in the afternoon, I have been inspired by our panelists with their analysis on China's development and on the future prospect of China-EU relations. Our speakers and participants have demonstrated strong interest in understanding China, both its present situation and future direction. Therefore, I wish to take this opportunity to address some of the most popular issues on the minds of our European friends.

One thing we cannot skip when talking about China these days is the 18th Party Congress of the CPC that has concluded two weeks ago. The Communist Party of China is China's ruling party. Understandably, this congress bears great significance to China and has attracted strong attention from abroad. In my view, by following this event up-close, we can find answers to many questions that are on the minds of China watchers. Tonight, I wish to discuss five of these questions.

Question No.1: Can the Chinese economy maintain its stable and fast growth?

The Chinese economy has achieved remarkable growth over the last decade. The size of the economy has moved up to the world's second from the sixth place. The GDP has maintained an average growth rate of 10.7%, contributing over 20% to the world economic growth on a yearly basis. Last year, per capita GDP in China approached to nearly 5,000 US dollars, equivalent to 140% growth from the 2002 level.

Having mentioned these achievements, I must also point out the many difficulties and challenges we face. Problems such as imbalanced, uncoordinated, and unsustainable development have become increasingly pronounced. It has become more difficult to maintain the old growth model driven by export and investment. Coupled with the downward pressure from the international financial crisis, many people have in recent months expressed concern over the prospect of the Chinese economy.

During the 18th Party Congress, we have set for ourselves the goal of maintaining healthy and sustainable economic growth and of doubling GDP and per capita income by 2020 based on the 2010 level. To put it under a yearly context, we must keep the annual GDP growth at a minimum of 7.5%. In the next decade, China will continue to focus on development and on the improvement of the growth quality and efficiency. Efforts will be made to fire all types of market participants with new vigor for development, increase motivation for pursuing innovation-driven development, establish a new system for developing modern industries, and create new favorable conditions for developing the open economy. This will make economic development driven more by domestic demand, especially consumer demand. At the same time, we will make sure that the modern service industry, strategic emerging industries, scientific and technological progress, a workforce of higher quality, management innovation, resource conservation, circular economy, and a balanced and coordinated development approach will all contribute to the economic growth. We believe that taking these steps will enable us to sustain long-term progress. We also plan to promote harmonized development of industrialization, IT application, urbanization and agricultural modernization. In fact, urbanization alone will offer strong enough a force for the Chinese economy, because the goal of 60% urbanization rate by 2020 from the current 51% means that close to 125 million rural population will move into urban areas.

Question No.2: How will China proceed to promote its social development?

In the last ten years, the Chinese people have experienced remarkable progress in social development. We have fully established basic old-age insurance system covering both the urban and rural population and have made medical insurance available to all. As free compulsory education becomes available in all urban and rural areas, higher education has also become increasingly accessible. On another front, the Chinese cultural industry has picked up speed in its global presence. More people from other countries have come to follow and appreciate the Chinese culture. Changes such as these are encouraging as well as challenging because of the resulting higher expectations of the people for social development.

In response, delegates to the congress have committed more resources in the next phase to social development so as to bring real benefits to the public. The Chinese government will work towards comprehensive social systems ranging from public service to social security, organization, and management, to social assistance, welfare, and medical care. Education is another priority where progress has been called for in terms of fair opportunity, optimized resource management, and preferential treatment towards regions that are rural, remote, impoverished, or ethnic-minority inhabited. On the issue of employment, strategies have been laid out to create more jobs, encourage start-ups, and improve labor market service. Our vision for a modernized education system by 2020 features decent employment rate, narrower income gap, and the full coverage of social security. Experts estimate that a comprehensive social welfare system in China will adopt its final shape around 2030.

With respect to the cultural industry, there will be intensive efforts to expose our people to diverse cultural offerings through initiatives such as free public access to cultural facilities and special purpose financial aid to rural and less developed regions. Internationally, we will remain actively committed to the promotion of the Chinese culture through exchange and cooperation. We are confident that by so doing, the cultural industry will grow into a strong pillar for the national economy.

Question No.3: Is it necessary for China to continue its reform and opening up?

The answer is an absolute yes. The policy of reform and opening up is the primary driving force behind China's three decades of growth. China will remain committed to such a policy and aggressively remove knowledge gap and institutional barriers in pursuit of more sophisticated and reliable institutions.

At the core of deepening economic reform is to maintain a correct relationship between the market and the government: the effective role of the government must be based on the respect for the laws of the market. We will adopt a more proactive opening up strategy and will promote all-round improvements to our open economy through better modern market structure, deeper financial reform, faster fiscal and tax policy reform, and strategic adjustment of the economic structure.

Social reform will continue to focus on the vision of a fair and just society that ensures people's rights of equal participation and development. Therefore, institutional developments that provide equal rights , equal opportunities and fair rules are essential. In order to narrow the income gaps and to ensure fair-sharing of growth benefits, the Chinese government will adjust the pattern of national income distribution through tightening its secondary distribution regulation.

The reform of the political structure is an important part of China's overall reform. We will continue to make active and prudent efforts to carry out the reform of the political structure, and make people's democracy more extensive, fuller in scope and sounder in practice. Greater importance will be placed on improving the system of democracy and diversifying the forms of democracy. We will give greater scope to the important role the rule of law plays in the country's governance and in social management, and place high importance on systemic building.

The Party will pay more attention to improving its approach to leadership and governance. The reform of the administrative system will focus on transforming the role of the government to allow better performance of its functions such as creating a favorable environment for development, providing quality public services, and maintaining social fairness and justice. We will improve the mechanism for conducting checks and oversight over the exercise of power, and fight fiercely against corruption.

Question No.4: How will China respond to environment and sustainable development issues?

The rapid growth of the Chinese economy over the last couple of decades has been constantly challenged by the increasing resource constraints, severe environmental pollution and a deteriorating ecosystem. As the gravity of the situation increases, the CPC and the Chinese government have become more and more serious about sustainable growth. Members of the 18th Party Congress have given high priority to ecological progress, incorporating it into the whole process of advancing economic, political, cultural, and social progress in pursuit of sustainable development and of a beautiful country.

China will remain committed to the basic state policy of conserving resources and protecting the environment, and strive for green, circular and low-carbon development. Efforts will be made to preserve the geographical space and improve the industrial structure, way of production and way of life in the interest of conserving resources and protecting the environment. To tackle with the deterioration of the ecological environment, we will try to reverse the trend by building stronger institutions to address the root cause of the problem, creating a sound working and living environment for the people. We have adopted a plan to impose a ceiling on total energy consumption. In addition, we will strengthen efforts to save energy, reduce its consumption, and support the development of energy-efficient and low-carbon industries, new energy sources and renewable energy sources. We hope that by 2020, a system for recycling resources will begin to take shape. Such a system would feature sharp decrease of energy consumption and carbon dioxide emissions per unit of GDP, as well as sharp decrease of major pollutants discharge. It would also feature increased forest coverage, a more stable ecosystem, and marked improvement of the living environment. China will continue to work with Europe and the rest of the international community to actively respond to global climate change and safeguard global ecosystem.

Question No.5: What does China plan to do with its increasing international influence?

In recent years, China has played an active and constructive role for world peace, prosperity and stability through its increased participation in international affairs. For some while, I have read in the foreign press stories that expressed worry about a China with rising international standing. The usual argument is that China might become more aggressive or assertive when dealing with other countries. The Party Congress has given clear response to such concerns.

First, we have reaffirmed our unswerving commitment to peaceful development, which we believe represent the trend of the times and the shared aspiration of all peoples. We will continue to promote the noble cause of peace and development of mankind, and call for promoting equality, mutual trust, inclusiveness, mutual learning and mutually beneficial cooperation in international relations and making joint efforts to uphold international fairness and justice. China opposes hegemonism and power politics in all their forms, does not interfere in other countries' internal affairs and will never seek hegemony, engage in expansion, or leverage its strength against others unfairly.

Second, China will unwaveringly follow a win-win strategy of opening up. We believe that in a globalized world where countries have become increasingly interdependent, such a commitment is not only a necessary choice for China to realize self-development, but also an important contribution to the peace and development of mankind. In the report of the Party Congress, it has been clearly pointed out that China will continue to keep in mind both the interests of the Chinese people and the common interests of the people of all countries. We will remain committed to growing friendship and cooperation in all fields with other countries on the basis of the Five Principles of Peaceful Coexistence. China will also get more actively involved in international affairs, play its due role of a major responsible country, and work jointly with other countries to meet global challenges and resolve global problems.

Third, China will continue to view Europe as its traditional key partner in foreign policy. We are looking forward to deeper and broader cooperation with Europe. As both China and Europe continue with their important development, the economic and technological complementarity between the two partners is expected to remain in place for a long time. That advantage in combination with our close views on global issues give us strong reasons to expect huge potentials in our practical cooperation. It is therefore imperative that we strengthen policy dialogue and coordination, deepen practical cooperation across board, jointly oppose protectionism, and facilitate economic and social progress through stronger cooperation.

Ladies and Gentlemen,

For the Chinese people, we are aware that China's development path forward will not be plain sailing as it is true for all other countries. But we have the determination and confidence to avail the difficulties and forge ahead so as to bring about a better China and bring its benefits to the whole world. As we stand ready to draw experiences and knowledge from different countries, we also encourage more friends to approach China with an open mind, learn more about the country, and contribute to closer ties between China and Europe. I strongly believe that with your support, China and Europe will do a better job in helping each other along the way and make more remarkable development achievements.

Thank you!

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