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Remarks by H.E. Ambassador Song Zhe at the BICCS Academic Year Opening Ceremony
2011/09/19
 

Expand Investment Cooperation to Promote Common Development

 

Distinguished guests,

Ladies and gentlemen,

Good afternoon! I’m very happy to join you at this opening ceremony of the new academic year of BICCS. At this season of harvest, we are very happy to see a harvesting China-EU relationship, which has gained fruitful results and demonstrated extensive, multi-tiered and all-directional growth momentum. Thanks to our long-term joint commitment, in our relations, economic cooperation and trade have always been an important driving force. Therefore, I find the theme of today’s workshop very timely, particularly as the world economy faces numerous uncertainties and as both China and Europe face new opportunities to grow bilateral ties. I wish to use this opportunity to give a brief presentation on China’s international economic cooperation, trade, and investment.

Over the last 30 plus years of reform and opening up, by actively expanding its foreign trade and investment, China has achieved fast economic growth and become the world’s biggest exporter and the second largest economy and trader. Foreign investment has played an important role in previous decades of China’s economic development. Last year, China’s total export and import volume reached 2.97 trillion US dollars, half of which is attributable to businesses with foreign investment. These investments benefit China not only in terms of capital inflow, but also by upgrading technology, technical, machinery, operational and managerial expertise, thus injecting vigor and power into the Chinese economy.

As the Chinese economy gathers strength and further opens up to embrace the accelerated globalization, more and more Chinese companies step up to go global instead of just attracting foreign investment at home. In recent years, Chinese foreign investment has been growing with a remarkable momentum, which to our delight, hasn’t been compromised by the international financial crisis. By the end of last year, China has in total made over 300 billion dollars of non-financial investment overseas. We’ve set up more than 16,000 Chinese business establishments in 177 countries and regions with the total asset topping 1 trillion dollars, the highest among developing countries. These Chinese investments have promoted economic growth of the hosting countries by creating for them, in estimation, more than 1 million jobs and 10 billion dollars of tax revenue.

The Chinese government always encourages the efforts of our businesses to go global, and we work earnestly to create favorable policy environment and provide guidelines to facilitate their pursuit. We ask our companies to follow the laws and regulations of the recipient countries, protect the interest of local employees, actively fulfill social responsibility, and conserve resources and protect the environment. We are also constantly encouraging them to help the locals with their difficulties and live in harmony with the local community. In general, the Chinese investment is well-received among the peoples in the hosting nations, and has brought, in a mutual fashion, deliverable benefits and sustainable economic and social development.

Ladies and gentlemen,

The history of China-EU business cooperation is also a history where new records are constantly made. Last year, our bilateral trade reached a record high of 479.7 billion dollars. The EU has for seven years in a row remained China’s largest trading partner. China has become Europe’s second largest trading partner and will most likely arrive on the top soon. Mutual investment is also climbing up rapidly. In accumulative terms, the EU is China’s fourth largest source of real investment. In the first five months of this year, the number of European investment projects in China grew by 17.9% year-on-year to 700, totaling 2.93 billion dollars, up by 9.8% from the same period of last year. On the part of China, the non-financial direct investment increased by 99.2% year-on-year in the first six months of this year and reached 860 million dollars. By the end of 2010, nearly 1,600 Chinese businesses are making direct investment in Europe with a total 12.5 billion dollar portfolio.

The growth of Chinese investment in Europe over the recent years has been on a quite different path compared with the past. First, the growth speed is higher. Chinese investment flow to Europe reached 5.96 billion dollars in 2010, 101% higher than the previous year. Second, the investment covers more extensive areas, including manufacturing, finance, commercial service, retail, wholesale, and leasing industry. Third, the investment expands to more countries. In fact, Chinese investment can be found in all 27 EU member states. Over the years, Chinese investment has also become more and more integrated with the local economy. Based on the principle of mutual benefit and win-win progress, Chinese companies constantly seek to expand the common interest with the local economy to bring about shared economic and social progress.

While growing investment in Europe generates revenue for Chinese companies, Europe also benefits from this growth in multiple aspects. Many European companies have been reinvigorated through mergers, acquisitions, and restructuring. Take Geely’s Volvo acquisition for example, under its new global development strategy, Volvo has managed to refurbish its brand by inheriting high-standard manufacturing and advanced safety technology. At the same time, by setting up production and R&D centers in China, the company succeeds in lowering its supply cost and increasing competitiveness and market share. As we speak, Volvo’s production base in Gent is very busy in meeting the sales demand. Furthermore, Chinese investment generates new jobs in Europe. By the end of 2010, Chinese companies have employed 37,700 European employees. China Bluestar, a subsidiary of Chem China, employs nearly 3,000 employees in its three branches in France and UK. The company was accredited by the Invest In France Agency (IFA) as China’s most successful investment in Europe. In the time of financial crisis, Chinese investment also offers some relief for Europe’s difficulty. Many Chinese businesses have put themselves in the shoes of their local community and teamed up with their recipient countries to tide over the difficult moment. For instance, though the COSCO Group was confronted with difficulties during the financial crisis, it didn’t give up on its project in the Piraeus container port in Greece, giving hope to the Greek shipping industry during its hardest time. Prime Minister Papandreou of Greece commended on this project that true friendship could only be revealed during the crisis.

Ladies and gentlemen,

Despite the fast growing momentum and interest of Chinese companies to make investment overseas, China is still new to this area. With restraining factors, both objective and subjective ones in the way, China still needs to learn and develop through real practice to become more experienced. On the part of China, many of our companies that are at the lower end of the value chain lack transnational operational experience. They lack qualified administrative personnel to well handle cross-cultural barriers and overseas business risks. In Europe, the sovereign debt crisis is laying out a breeding ground for protectionism. Inconsistency in laws and policies among some member states has added up to the complexity in the issuance of visa, work permit, and residence permit. In addition, some people in Europe still view China through colored lens and propose background investigation for Chinese investment simply because of their groundless suspicion or willful guessing. Actions like this could seriously obstruct investment flow from China. The recent cases of Chinese investment being blocked have left many Chinese businesspeople the impression that the European investment environment is deteriorating, causing them to postpone or even cancel their plans to invest here.

We always believe that problems can be better resolved when faced squarely. The Chinese government never demurs at the problems of our companies. We constantly talk to our businesses and formulate various policies to encourage them to develop mutually beneficial cooperation in other countries while respecting local laws, regulations, social norms, and culture. These efforts have effectively helped Chinese companies optimize their development strategy and get more accustomed to doing business in Europe. We hope that policy makers in Europe will bear in mind the larger interest of China-EU relations, uphold an open, transparent, and friendly policy environment, and constantly upgrade investment facilitation to attract more Chinese business. We also hope that the European business community will join the effort to bring more Chinese companies here in pursuit of common development.

Ladies and gentlemen,

China-EU relations bear great importance for both sides. There is strong will and agreement between us to strengthen our business and investment cooperation and deepen the comprehensive strategic partnership. We are fully aware that stronger cooperation is the best choice for us to sail through the current crisis, rekindle the economic growth, and uphold social stability and harmony. To meet our challenges and achieve prosperity, we must reject protectionism, keep our markets open, and advance further on mutual investment. Our respective development strategies, China’s 12th Five Year Plan and Europe’s 2020, provide a rare opportunity to achieve our goals. We should make good use of our multiple business consultation mechanisms, including the China-EU Summit, HED, Joint Business Committee, and sectoral dialogues, to exchange ideas, share information, resolve problems, and facilitate business growth. We are convinced that with its highly developed economy, social stability, vast market, and well-established corporate culture and legal environment, Europe will remain a major destination for Chinese companies. We are confident that Chinese businesses will build on the success achieved previously and make further progress in our business and investment cooperation with Europe.

In China, we have a poem that reads, “Afar neighbors feel not afar. Sufficing others so all could be sufficed. Global trade flourishes and soars. Commerce thrives on rule and law.” This poem concisely summarizes the principles that we should follow to attain healthy growth in our investment cooperation. To sustain our business cooperation, we must put in place a set of active, fair, and effective policies that treat each other as equals and promote mutual benefit and common progress. We believe that as long as we take a long-term perspective and remain fair-minded, our business ties will become a best example for cooperation between major economies. In the times ahead, we will work together with the EU side to expand investment cooperation, explore international market, and achieve common progress for the benefit of our two peoples.

Thank you!

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