Realizing Mutual Benefit and Win-for-All Through Common Development

Keynote Speech at the International Investment Forum 2007
Mdm. Wu Yi, Vice Premier of the State Council, P. R. China
September 8, 2007

Distinguished guests,

Ladies and gentlemen,

I am very happy to join friends old and new, from both home and abroad, in coming to this session of the China International Fair of Investment and Trade. On behalf of the Chinese government, may I warmly welcome all of you for your presence. My heartfelt gratitude goes to UNCTAD, UNIDO, WAIPA, IFC of the World Bank, OECD and other parties for your active support in organizing this event.

Ten years have passed ever since we held the 1st session of the China International Fair of Investment and Trade on September 8, 1997. Looking back at the course of its development, we are overwhelmed by the influx of feelings and emotions derived from it. Over the past one decade, the CIFIT has evolved from an event mainly devoted to attracting foreign investment into China to one that combines both “inviting in” and “going global”, thus promoting two-way investment; from a window for provinces, autonomous regions and municipalities in China to showcase their opening-up posture and increase FDI inflow to a platform built for

strengthening investment cooperation by countries in the world. Over the past ten years, more than thirteen thousand cooperation projects have been signed here, close to 70 billion US dollars of FDI has entered China through the Fair and a large number of Chinese companies have identified their cooperation partners for overseas investment at the Fair, while companies from many countries and regions have found investment and development opportunities by attending the event. Like the comment by quite some people, the CIFIT has already become a grand occasion for international investment promotion that commands influences across the world. Starting in 2000, we have been holding the International Investment Forum during the CIFIT, with eight sessions completed to date. Thanks to the joint efforts of all parties involved, the Forum has become a credible platform for China to introduce open-up policies and announce investment information, as well as an important venue to exchange international investment experiences and explore investment promotion approaches. We are truly heartened by the fruitful results scored by the CIFIT and its International Investment Forum over the past decade. They have our thorough recognition and salute. I am convinced that given our attention and support, the CIFIT and the Forum will no doubt become ever better and lead to even greater achievements.

Friends,

The ten years during which the CIFIT was held is also a period wherein the Chinese economy has gone through tremendous changes.

China has withstood the test of the Asian financial crisis. Its industrialization, urbanization, marketization and internationalization processes have been fast developing, its economy assuming greater scale rapidly, with its GDP growing from less than one trillion US dollars to more than 2.6 trillion US dollars and per capita GDP reaching 2,000 US dollars. Upgrading of industries in China has been accelerated and domestic consumption has been constantly on the rise, with fixed asset investment for the whole country topping at 1.4 trillion US dollars and total retailing value of social consumer goods approaching one trillion US dollars. The country has also witnessed further opening up, with over 1.7 trillion US dollars of import and export, 69.5 billion US dollars of actualized foreign investment and 16.1 billion US dollars of outbound investment. The opening up drive in China has entered into a new stage extending into all directions, multiple tiers and a broad scope. Guided by the scientific outlook to development, the Chinese economy is moving into a new era marked by healthy and rapid growth.

The ten years during which the CIFIT was held is also a period wherein the world’s economy is entering a new growth era after going through the Asian financial crisis. The emerging economies have witnessed a remarkable reinforcement of the size and the strength of their economies. Economic globalization and regional economic integration are moving into greater depth. Multinational companies have become the dominant force behind the global flow and allocation of key production factors. International trade and cross-border direct investment are growing by leaps and bounds. Cross-border mergers and acquisitions have become the mainstream approach of international direct investment, with the focus of investment shifting from the manufacturing sector to the service sector and service outsourcing presenting itself as a new trend.
 
During the ten years wherein the CIFIT has yielded fruitful results, the relationship between the Chinese economy and the global economy has experienced tremendous changes. In particular, after China’s WTO accession in 2001, the Chinese economy is rapidly integrating into the global economy. The country’s foreign economic exchanges and cooperation are assuming ever greater magnitude, therefore bringing benefits not only to the Chinese people, but contributing to the world’s economy as well. The good quality and inexpensive Chinese products have enriched the choices available to consumers at different stratus in the world while lowering the cost of production for companies, especially multinational companies. China’s voluminous and varied import demand has promoted employment in many countries and regions. The constantly enlarging scope of market access and supporting policies for direct investment in China have provided multinational companies with more and more business opportunities of investment and development in China.

I need to make a special note here that for the developing countries at large, the big market and huge demand of China bode well for them to expand their export of agricultural produce, raw materials and manufactured goods; China’s capability in manufacturing, engineering design and construction in which we have relative strength could help the developing countries to step up their infrastructure building and continuously improve their peoples’ livelihood; China’s ever stronger ability in making outbound investment has provided new source of direct investment for the developing countries.

Changes in the Chinese and the world economy have posed both new possibilities and new opportunities as well as new challenges for us to carry out international investment cooperation.

China, starting from a new historic point of departure, will internally focus on promoting scientific development and social harmony, and continue to march towards a well-off society, whilst externally, as a big responsible country, we will adhere to the peaceful development path, and commit itself to shaping a harmonious world of lasting peace and common prosperity. China will implement the mutually-beneficial and win-win opening strategy unswervingly and lift the development level of an open economy. We not only attach great importance to economic growth, but also value social progress, justice and environmental protection, putting emphasis on Corporate Social Responsibility. We are not only committed to our own development, but also actively assume

responsibilities of the international community, and fight against environmental and climate change challenges through intensified international cooperation for development. We firmly believe that the development of China will not only continue to benefit from the wide-ranging and in-depth economic and trade cooperation throughout the global community, but also provide ample scope for an expanded international economic and trade cooperation.

riends,

Lately, the Chinese government adopted a series of measures for macro adjustment, such as the elimination or reduction of tax rebate on part of the exports, the application of new or increased export duties on some products, and policy adjustment on processing trade. In addition, we promulgated the Law on Enterprise Income Tax and the Anti-Monopoly Law, and released regulations to standardize the M&A practice by foreign companies. These fine-tuning measures, laws and regulations might to some extent affect some foreign invested enterprises. But the adjustment of policies and laws aims to create a more equal, open and standard market climate for various companies. In the long run, it is conducive to the sound development of enterprises, deepening of international trade and economic cooperation and a balanced international trade. We also firmly believe that an opening China, featured by its sound and rapid economic growth, more transparent policies and a more standard market order, will bring more development opportunities for our trading partners as well as enterprises both from home and abroad.

Here, I would like to call upon special attention from foreign investors to the following development opportunities in China.

First, to expand cooperation in modern services. Currently, more than 100 service sectors in China are open to foreign investment, some of which are more open than that of some developed countries. Recently, the Chinese government made the decision to speed up the development of services industry, putting forward the target of USD 400 billion trade in services by 2010 and more than 50% of services added value in GDP by 2020. Relevant government authorities also formulated and released policies and measures for the promotion of undertaking international services outsourcing. There is ample room for international cooperation in modern services.

Second, to enhance cooperation in energy conservation, environmental protection and urban development. The Chinese government formulated the Comprehensive Work Program on Energy Conservation and Emission Reduction and the National Climate Change Program, defining specific targets and measures on energy saving and emission reduction. In the coming several years, the total input in energy saving and emission reduction will exceed USD 1 trillion. In addition, at least 200 million rural people will move to urban China. There is huge market potential for energy saving and emission reduction, urban infrastructure, housing and public services.

Third, to actively engage in China’s regional development and construction. China is a big developing country with a vast land and imbalanced development between urban and rural areas and among different regions. We encourage foreign investors of vision to pay attention to China’s strategy of coordinated regional development, actively engage in the revitalization of old industrial bases in the northeast and the restructuring of SOEs, strengthen trade and economic cooperation with middle and western China, and aggressively invest in the northeast, middle and western regions as well as the Tianjin Binhai New Area.

Fourth, to carry out technical cooperation with Chinese enterprises. China is now fostering an innovation-friendly environment to make enterprises the mainstay of technical innovation as well as building itself into an innovative country. We welcome multinationals to develop high-tech industries in China, set up more R&D centers and actively carry out technical cooperation with Chinese enterprises so as to make progress in technology through innovation by means of inter-firm R&D, joint R&D and R&D outsourcing.

Fifth, to discuss new ways of international investment cooperation. “Inviting in” is to realize common development whilst “going global” is to reflect common interest. We encourage and support competent Chinese enterprises to “go global” and explore international markets. We also encourage multinationals, while increasing investment in China, to join Chinese enterprises in international investment cooperation and explore new ways and methods to that end.

Ladies and gentlemen, friends,

China is a member of the big global family. China’s development cannot be achieved in isolation of the world, and the world’s prosperity also needs China. It is a sure way to accelerate China’s modernization drive by opening up unswervingly and elevating the development level of an open economy comprehensively. We are willing to work along with all the other nations in the world in committing ourselves to a harmonious world that is peaceful, cooperative and prosperous.

I wish a complete success to the 11th China International Fair for Investment and Trade as well as the International Investment

Forum.

Thank you for your attention!