Keynote Speech by Ambassador Luo Zhaohui at theBusiness partnership Luncheon of China-CanadaInvestment Protection & Business Cooperation Forum

(December 15, 2014, Toronto)

2014-12-17 14:00

Honourable Senator Victor Oh,

Mr. Yu Ping, Vice Chairman of CCPIT (China Council for the Promotion of International Trade),

Mr. Michael Chan, Minister of Citizenship, Immigration and International Trade for the Province of Ontario,

Ladies and gentlemen, dear friends,

It is my pleasure to be in Toronto again and attend China-Canada Investment Protection & Business Cooperation Forum. This is my fifth visit to Toronto since I became Chinese Ambassador to Canada half a year ago. Every time I came here, I would be more than happy to share with you my views on China-Canada relations and China`s development.

Last month, Prime Minister Harper paid a landmark visit to China and achieved substantial results. Shortly after this visit, I wrote an article on the website of the Globe and Mail to interpret the outcomes of the visit. By doing so, I hope Canadian people know more about the significance of those outcomes and find that the booming bilateral cooperation would bring more tangible benefits to our two peoples. Recently, I've been talking actively with the Canadian side about how to better implement those outcomes.

I have been pushing forward China-Canada cooperation in major areas such as trade, investment, finance and energy since I took office in May. These are my top four priorities and we are pleased to see that remarkable progress has been made in those areas.

on October 1st, The FIPA entered into force finally, which will protect effectively the legitimate rights and interests of both Chinese and Canadian enterprises, and help build a fair, transparent and friendly investment environment. It will further promote mutual investment, deepen economic and trade cooperation and bring more benefits to the investors and the peoples of our two countries.

This morning, business leaders from China and Canada had an in-depth discussion under the topic of "Strengthening Investment Protection & Enhancing Economic Partnership". I believe it has great significance to the positive implementation of FIPA and promotion of bilateral economic and trade cooperation. So I'd like to express my appreciation for your unremitting efforts.

In financial area, the People's Bank of China and Bank of Canada signed a bilateral currency swap agreement and decided to establish the first North America's RMB clearing center in Toronto. The Chinese regulators have also granted an initial RMB Qualified Foreign Institutional Investor (RQFII) quota to Canadian financial institutions.

Meanwhile, Bank of China and ICBC (Industrial and Commercial Bank of China) are expanding their business in Canada. Just a few days ago, China Construction Bank opened its first branch office in Toronto.

I am very excited that the significant progress in financial cooperation is really beyond my expectations. I believe, the financial cooperation will bring more efficient service and further facilitate our bilateral trade and investment.

In trade area, we agreed to continue the discussions on exporting more Canadian beef, cherry and blueberry to China's huge market, which presents greater business opportunities for Canadian competitive products. Canada will open new trade offices in Hangzhou, Xi'an, Xiamen and Tianjin to help Canadian enterprises expand business in China. We also agreed to establish a Track II dialogue mechanism to study new approaches to enhance bilateral economic and trade relations, including a FTA.

In energy area, the two sides signed an expanded Memorandum of Understanding on nuclear cooperation. In addition, Canada's Candu Energy Inc. will set up a joint venture with China National Nuclear Corporation to jointly explore Chinese and international civil nuclear energy markets.

Such major cooperation projects will add more value to the bilateral trade and economic cooperation. Meanwhile, the two sides decided to establish another Track II dialogue mechanism focusing on new approaches to promote energy trade, including building an environmentally safe maritime energy corridor.

Moreover, the two sides decided to establish an annual Foreign Affairs Ministers Dialogue and an annual Economic and Financial Strategic Dialogue, which will provide high-level platforms for bilateral dialogues.

Both sides announced Year, and further agreed on co-production of TV series and movies. We are committed to establishing new direct air links between Calgary and Beijing as well as Montreal and Beijing as soon as possible to facilitate further people-to-people exchanges.

Furthermore, both sides agreed to strengthen anti-corruption law enforcement co-operation.

The above fruitful achievements indicate that the two economies are highly complementary and have great potential and broad prospects in future cooperation.

It also demonstrates that our common interests far outweigh the differences. As long as we focus on cooperation while managing differences in an appropriate way, our pragmatic cooperation will continue to make more progressive achievements.

So far, the Chinese Embassy and Canadian federal government have established task forces to focus on fully implementing the outcomes and consensus of Prime Minister Harper's visit to China.

In the next stage, we will focus on some new priorities, such as further expanding bilateral trade volume and promoting trade in a more balanced way, pushing forward major projects in infrastructure construction and energy areas. By doing so, we can accelerate bilateral cooperation to a larger scale, a higher level and a better structure.

Ladies and Gentlemen,

China's development has always been in the spotlight of international arena. In the past 65 years since founding of the People's Republic of China, we have successfully found a path of socialism with Chinese characteristics that is suitable to China's conditions. In particular, since the opening up and reform over 30 years ago, we have lifted our country from the state of "poverty and blankness" into the second largest economy in the world.

We have made significant progress in almost all areas that our democracy and legal system continue to improve as well as people's living standards continue to upgrade.

We have set the two "centenary goals", that is to double the 2010 GDP and per capita income of urban and rural residents and finish the building of a society of initial prosperity in all respects by 2020, and turn China into a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious in the middle of this century.

To achieve the two "centenary goals", we have kicked off the journey to realize the China's Dream of great rejuvenation of the Chinese nation. We have full confidence in the path, theory and system of socialism with Chinese characteristics.

At the same time, we realize that we are facing serious challenges and difficulties in our future development, such as unsustainable development pattern, unreasonable economic structure, and environmental pollution, complex international and regional environment. We are taking measures in political, economic, social, judicial and diplomatic areas to actively and properly address those issues.

We are endeavouring to deepen comprehensive reform with a focus on keeping a proper relationship between the market and government.

Firstly, streamline administration, delegate more power to lower levels, and further unleash market vitality. Since last year, the administrative approval on over 600 items has been cancelled or delegated to the lower levels. And this year, the business registration reform has been carried out nationwide to lower the threshold for business.

Secondly, advance fiscal, taxation and financial reforms, facilitate fund-raising and provide tax reduction for small and micro businesses.

Those reform measures greatly mobilize the enthusiasm of the whole society to start businesses. In the past three quarters of this year, the number of newly registered market entities reached 9.2 million and the number of new enterprises increased by more than 60% over the same period of last year.

Thirdly, promote economic structure readjustment, deepen the reform of state-owned enterprises, develop diversified ownership economy, and ensure greater market access, particularly in the services sector such as medical care, old-age nursing, and finance to strengthen market competitiveness.

We are comprehensively advancing the rule of law. This October, the 4th plenary session of the 18th CPC Central Committee made strategic arrangements to improve legal system to ensure equal rights, equal opportunities and fair rules for all, to protect citizens' personal rights, property rights, basic political rights and rights in all other areas against infringement, to guarantee that citizens' economic, cultural, social and all other rights are implemented, so as to realize the legalization of citizens' rights protections.

We are trying to grasp and adapt to the economic "new normal".

Firstly, China's economy has shifted from high speed growth to a medium-to-high speed growth. In the past three quarters of this year, China's GDP grew by 7.4%, and all the major economic indicators are within a reasonable range.

We are fully confident in achieving the economic growth target of around 7.5% set for this year. Even a growth rate of around 7% would place China's economy among the top in the world in both speed and increment.

Secondly, the economic structure is constantly improved and upgraded. Service industry and consumer demand are playing a dominating role in economy. In the past three quarters of this year, the final consumption contribute 48.5% to economic growth, which overtook investment. The value added of the services industry, accounting for 46.7% of GDP, continued to surpass that of the secondary industry.

Hi-tech industry and equipment manufacturing industry grew notably higher than the average industry. The per unit GDP energy consumption dropped by 4.6%.

Thirdly, the economy is increasingly driven by innovation instead of input and investment and the driving forces are further diversified. We have given more support to innovation-driven business and vibrant SMEs, and promoted transformation and upgrade of traditional industry, in a bid to shape new growth areas and driving forces.

Meanwhile, we are pushing forward new type of industrialization, urbanization, informatization and agricultural modernization in a coordinated way to provide lasting power to the sustainable and steady economic development.

Now, some people may worry about whether China's economy will see further decline in growth rate, whether it's able to overcome difficulties. We know very well we have risks, for instance, overcapacity of manufacturing industry, local government debt. But those risks are not that scary.

In fact, resilience best equips the Chinese economy against risks. By adopting innovative ideas and approaches in macroeconomic management, and with the economic and financial strategies and policy options at our disposal, we have the confidence and capability to cope with potential risks.

We are promoting opening-up with a higher standard. China is committed to building a new system for an open economy. We will expand the opening of service sector, including capital market and opening up in the hinterland and border areas.

China has substantially concluded the FTA talks with South Korea and Australia respectively, and the agreements will soon be there. We are negotiating with ASEAN member countries to upgrade our existing FTA. We are also expecting to initiate the Free Trade Area of the Asia-Pacific(FTAAP) process this year.

After we launched Shanghai Pilot Free Trade Zone, we have made significant progress and accumulated precious experience in management of negative list of foreign investment, trade facilitation, opening-up of financial service sector as well as improvement of governmental supervisory system. A few days ago, the Chinese government decided to launch three new pilot free trade zones in Guangdong, Fujian and Tianjin, and apply Shanghai's experience into practice nation-wide.

We are positively developing a distinctive diplomatic approach befitting its role as a major country, and pursuing peaceful and stable neighbouring and international environment.

Not long ago, the CPC Central Committee held the second Central Conference on Work Relating to Foreign Affairs since the founding of P.R. China, and laid out a comprehensive plan for China's diplomacy under the new conditions. China should conduct diplomacy with a salient Chinese feature and a Chinese vision.

We will continue to follow the independent peaceful foreign policy, advocate the building of a new type of international relations underpinned by win-win cooperation, and promote democracy in international relations.

While we pursue peaceful development, we will never relinquish our legitimate rights and interests, or allow China's core interests to be undermined. We will continue to promote peaceful resolution of differences and disputes through dialogues and negotiations between countries.

We are making more efforts to fight against corruption, crack down on both "tigers" and "flies"–powerful leaders and bureaucrats, while enhancing international anti-corruption cooperation.

Dear friends,

Everyone has their own dreams, so does a nation. Our ultimate goal of the Chinese dream is to satisfy people's yearning for a better life, which means the Chinese people hope for better education, more stable jobs, more satisfactory income, more reliable social security, medical services with higher standards, more comfortable living conditions and a more beautiful environment. We wish our children will grow healthier, work better and live better.

However, nowadays China's per capita GDP is only 6,800 US Dollars and ranks 84th in the world. It is far below the world average level of 10,000 US Dollars, while Canada's per capita GDP reaches 52,000 US dollars. There is a huge gap between us. Even if China became the largest economy, China's GDP would be divided into very small portions by the total population of 1.3 billion.

Therefore, China's status as a middle-income, developing country will not be changed. According to the World Bank standard of $1.25 living costs per day, there are more than 200 million people living under poverty line in China. We still have a long way to go.

China is looking forward to further enhancing win-win cooperation with Canada. This meets the needs of China's development and China's development provides more opportunities for China-Canada cooperation.

I hope the business communities of our two countries could seize the great opportunity in development of bilateral relations and deepen cooperation in all areas including trade, investment, finance and energy in an effort to make greater progress in China-Canada relations.

Thank you.