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Remarks by Chargé d'Affaires Mr. Zhang Lirong at the 3rd Annual European Raw Materials Conference

Ladies and Gentlemen,

Good afternoon!

First of all, I wish to thank the organizer for the warm invitation for me to address this conference.

A little over a month ago, the European Commission has launched the European Innovation Partnership (EIP) on Raw Materials, which aims to establish Europe by 2020 as a global leader in raw materials exploration, exploitation, processing, circulation, and alternative use. I think by focusing on the role of innovation in efforts to boost production and sustainability across the Raw Materials Value Chain, this conference will generate valuable knowledge and advice for the implementation of the EIP.

The sustainable and secure supply of raw materials not only concerns Europe, but also the international community at large. Against the backdrop of the lingering international financial crisis, innovative and green growth has become the trend of development, creating both opportunities and challenges for the raw materials industry. It is therefore important for us to figure out effective ways to ensure sustainable and secure supply of raw materials through international cooperation. I wish to use this opportunity to make three points.

First, we should strengthen technological innovation. Innovation is the eternal driving force for economic development and the growth of the raw materials sector. We need to work hard to bring innovation into every step of the process, including exploration, exploitation, processing, circulation, and alternative use. New technologies are needed for industrial upgrade and production capacity boost to ensure sustainable supply of raw materials. Technological process has enabled us to tap into the shell gas and oil resources, producing far-reaching impact on the global energy structure. Going forward, we need to find new ways to reduce energy consumption, and develop new technologies to protect environment, promote low carbon and green economy, and build a resource-conserving and environment-friendly society.

Second, we should ensure price stability of raw materials. Price volatility of raw materials undermines government efforts to hold down inflation. With major economies going for quantitative easing, it has now become highly necessary to keep a stable commodity price. To ensure healthy, stable, and orderly growth of international commodity market, we must combine this policy objective with the goal to promote economic growth, and take steady measures to stabilize supply and demand, strengthen financial market supervision, increase market transparency, and curb speculation.

Third, we should uphold fair trade. We need a fair, just, and non-discriminatory international trading regime where buyers and sellers could negotiate fair pricing for raw materials. Efforts must be made to fight against profiteering monopoly that violates the principle of fair trade and harms the interests of supplier states. In the face of trade frictions, we must commit ourselves to resolving them through consultation and firmly opposing protectionism, which would not only jeopardize the growth of raw materials sector, but also undermine trade relations among all stakeholders.

Ladies and Gentlemen,

China today is going through an important stage of urbanization and industrialization. Sustainable, secure, and stable supply of raw materials is vital for our economy. In 2012, despite the difficulties with the fall of production growth and profit, the raw material sector in China has in general maintained stability. Many businesses have seized the opportunity to promote technology innovation and structure adjustment, and accelerated industrial upgrade with apparent success.

China is a major importer of raw materials. Our economy can't grow without access to the international raw materials market. At the same time, our supply to the market is also indispensable for the global economy. As an active participant to the international cooperation on raw materials, China is committed to mutually beneficial and win-win cooperation with our partners, and intends to help our partners translate resources reserves into development strength. Through popular investment projects, China has helped many countries accelerate the development of infrastructures, create jobs, and promote economic development.

The Chinese government attaches great importance to the corporate social responsibility and environment protection issues of Chinese companies doing business abroad. The government authorities have adopted many rules and regulations to make sure that our companies will behave responsibly beyond our borders. These efforts have been paid off in recent years with an uplifted sense of awareness and improved practice of corporate social responsibility, but we do recognize potential for further improvement.

For some while, there have been debates and concerns about the export management exercised by the Chinese government over certain raw materials. Here is how I view this issue. The restrictive measures we have adopted is in line with the policy objective of environment protection. For a very long time, rare earth in China has been exploited in an unregulated manner, at an enormous cost to our environment and to our people's way of life. The measures we have taken is our response to the call of our people. It is a result of our growing awareness of environment protection and sustainable approach to development. It is also our government's aspiration for good governance, as rightly stressed by this session.

The regulations we have placed on raw materials are primarily focused on domestic management. For instance, we are working to intensify environment protection and ensure sustainable exploitation of resources through market supervision, technology innovation, industrial upgrade, and safety check at workplace. Export management is only a part of the package. The fact is, our current export of rare earth already meets the normal demand on the international market. We strongly believe that a more diverse supply of rare earth on the international market will benefit the system in the long run. That said, we will continue to supply to the global market, and call on all other countries with rare earth reserves to share the responsibility and contribute to the prosperity of the world economic progress and prosperity.

Ladies and Gentlemen,

The raw materials sector holds an important place in the economies of China and Europe. There are abundant shared interests for us to uphold the integrity of the system, and there are established means of communication and coordination for us to achieve so. The Chinese Ministry of Industry and Information Technology has already held two working group meetings with the European Commission on raw materials. The two sides have exchanged views on the latest development in the area, including China's 12th Five-Year Plan, and have proposed plans for further cooperation. The Chinese side is willing to move the process forward, and will work together with the EU to come up with more effective plans for exchange, innovation, and win-win cooperation.

To conclude, I wish the 3rd Annual European Raw Materials Conference a complete success.

Thank you!

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