Address by His Excellency Wen Jiabao
Premier of the State Council of the People's Republic of China
at the China-Central and Eastern European Countries
Economic and Trade Forum
Budapest, 25 June 2011
Prime Minister Viktor Orban,
Ladies and Gentlemen,
I am delighted to come to the beautiful city of Budapest and attend the China-Central and Eastern European Countries Economic and Trade Forum. Let me begin by extending warm congratulations on the opening of the forum. I would also like to express sincere appreciation to the Hungarian government for its thoughtful arrangements, and pay high tribute to friends who have long been devoted to the economic cooperation and trade between China and the central and east European countries.
Exchanges between our two sides date back to ancient times in spite of the long geographical distance. As early as over 2,000 years ago, the Silk Road closely linked us together. Most countries in central and eastern Europe established diplomatic ties with the People's Republic of China immediately after its founding, opening a new page in the annals of our friendly relations. Over the past several decades, although the international situation and the domestic situations of both sides have undergone big changes, we have always enjoyed mutual respect, mutual trust, mutual understanding and mutual support. Our traditional friendship has constantly deepened and cooperation in various fields has made tremendous progress.
Two-way trade has grown rapidly. In 2000, China's trade with central and east European countries was only US$3 billion. In 2010, it surpassed 40 billion, representing an annual average growth of 32%. China's imports from the central and east European countries had grown even faster, registering an average annual rate of 38.7%. Our trade mix has improved. The proportion of trade in electric, mechanic and high-tech products has exceeded 60%. Today, the rose oil, amber, crystal, beer and cars from central and east European countries have entered numerous households in China. And the quality yet inexpensive consumer goods from China have been warmly received by the local people here.
Two-way investment has been burgeoning. So far, central and east European countries have set up close to 2,000 enterprises in China. Investment by Chinese enterprises in those countries has also seen dynamic growth. The Chipobrok shipping company, established in 1951, was New China's first joint venture with a foreign country. Today, the company owns 20 modern ocean cargo ships, and operates along shipping routes covering Asia, Europe, America and Africa. China's Huawei company has set up its European supply center in Hungary, creating more than 2,000 jobs for the local community. After acquired by the Wanhua Group of Yantai, Shandong province, Hungary's BorsodChem, a time-honored chemical enterprise in central and eastern Europe, has shown renewed vitality.
Cooperation areas have been expanding. In addition to the traditional fields of trade and investment, our cooperation in finance, tourism, legal services, green economy and infrastructure has steadily increased. The Bank of China has established its branch in Budapest, and the Hainan Airlines has opened direct flight between Beijing and Budapest. These are the new bright spots in our cooperation. In 2010, almost 200,000 tourists from central and east European countries visited China, and more than 60,000 Chinese tourists visited central and east European countries as the first stop of their overseas trips. Such exchanges have brought our people closer to each other.
Cooperation mechanisms have been improving. In recent years, China and the central and east European countries have signed a series of bilateral agreements on economic, industrial, scientific and technological cooperation, including agreements on investment protection and avoidance of double taxation. They have provided sound institutional and legal guarantee for economic cooperation and trade between the two sides. We have put in place the joint economic commission mechanism to address major issues in our business cooperation through regular consultations. Moreover, our two sides have held various kinds of business forums, product exhibitions and trade fairs for entrepreneurs, providing important platforms for the business community to intensify exchange and cooperation.
What has happened shows that China and the central and east European countries can not only be good friends who stand by each other through thick and thin, but also good partners that draw on each other's strengths and pursue win-win cooperation. The deeper our mutually beneficial cooperation goes, the stronger our traditional friendship will be.
Ladies and Gentlemen,
We live at a time when the global political and economic landscape is undergoing major adjustments and changes. Our two sides have become increasingly interdependent with growing common interests. And our enterprises have a strong wish for deeper cooperation. It is true that the scale of trade and investment between us is still relatively modest now. But given the high economic complementarities, I see great potential and broad prospects for our business ties.
-Both sides have industries with unique strengths. You haveadvantages and distinctive technologies and techniques in such sectors as auto-making, ship building, aircraft manufacturing, sewage treatment, brewery and bio-pharmacy. China has strengths in processing, manufacturing and infrastructure construction. If we draw on each other's strengths and complement each other, we will be long-term and reliable partners in economic cooperation and trade.
-Both are important emerging markets in the world. China is at a stage of rapid industrialization and urbanization. Its consumption structure and industrial structure are being upgraded at a faster pace, and its market holds tremendous potential. The central and east European countries boast rich natural resources, solid industrial and agricultural basis and strong capability in science, technology and education, and they enjoy steady economic growth. The economic difficulties facing a few of them are only temporary, and we are fully confident in the development prospects of the central and east European countries.
-Both are attractive destinations for investment. We are all making efforts to improve the market economic structure, expand the scope of opening-up, and improve laws and regulations to spur faster economic growth. For 18 consecutive years, China has attracted more foreign investment than any other developing country. With most central and east European countries joining the European Union and with the continuous improvement in their investment environment, this region now holds great appeal to enterprises from all countries, including China.
-The central and east European countries can serve as a gateway to China-EU cooperation. Located in the heart of Europe, you have well-connected transport facilities and serve as a bridge between Eastern and Western markets. By developing transit trade and making investment in the central and east European countries, Chinese enterprises can significantly cut their business costs and get integrated into the industrial system within the EU. And the two sides can also leverage the EU policy incentives to jointly explore the west European market for win-win results.
Ladies and Gentlemen,
China cherishes its long-standing and deep friendship with the central and east European countries. We find in you a reliable friend and key partner in cooperation. When we in China pursue the strategy to diversify foreign trade markets, and encourage Chinese companies to "go global", we take central and eastern Europe as a strategic priority. My current visit is both a journey of friendship and a journey of cooperation. We want to work with you to develop new ways of cooperation, and push our business relationship to a higher level by expanding its size and broadening its scope. To this end, I would like to propose the following.
First, increase bilateral trade. Currently, trade between us takes up less than 4% in our respective total foreign trade, and less than 10% in China-EU trade. Much potential remains to be tapped. We should open markets wider to each other, reduce tariff and non-tariff barriers, step up cooperation in customs, quality inspection, logistics, and personnel entry and exit so as to fully release the potential in our bilateral trade. China welcomes enterprises of central and east European countries to actively explore the Chinese market. We are willing to hold more commodity fairs for you and set up designated areas at the China Import and Export Fair (Canton Fair) and the Eastern China Fair to help your competitive products access the Chinese market.
Second, promote two-way investment. This will not only boost our respective economies, but also contribute to greater balance in our bilateral trade. We must work intensively to improve the laws and regulations on two-way investment, remove investment barriers of various kinds, actively engage in diversified forms of investment promotion activities, and strive for early substantive growth in two-way investment. We should continue to enhance investment cooperation in telecommunications, new energy, agriculture and natural resources development, and encourage joint establishment of industrial parks and high-tech development zones. China supports competitive Chinese enterprises in investing in central and east European countries, and actively participating in the merger, acquisition and reorganization of enterprises in these countries. We hope that the central and east European countries will relax restrictions concerning market access and technical standards as appropriate, and provide policy support for investment by Chinese enterprises.
Third, enhance infrastructure construction cooperation. Chinese enterprises have solid strength and rich experience in infrastructure construction, while the central and east European countries have big markets. There is a lot we can do together in this field. Chinese enterprises are now actively seeking opportunities to participate in infrastructure development in central and east European countries. The Zemun Bridge in Serbia, which will soon be built, will become the first "business card" of Chinese enterprises to access markets in central and east European countries. The Chinese government supports Chinese enterprises in undertaking infrastructure projects in central and east European countries through PPP, BOT and other customary formats in Europe, and we are willing to provide financing support in this regard. We hope the two sides can reach early agreement on some big landmark projects. China is willing to accelerate the construction of the Eurasia Railway and will support enterprises in establishing a smooth logistic network to facilitate the flow of goods and personnel between the two sides.
Fourth, deepen fiscal and financial cooperation. This will provide an important guarantee for our business relations to reach a higher level. China sincerely welcomes financial enterprises of central and east European countries to open business in China. We support financial enterprises of both sides in setting up branches in each other's countries and increasing the scale of cross-border trade settlement in RMB. China is exploring the possibility of setting up a cooperation fund between the two sides, which will provide strong support for our economic cooperation and trade. China is a responsible long-term investor in the European financial market. We support the economic and financial adjustment measures adopted by the central and east European countries, and have confidence in the future of their financial markets. We are willing to explore all kinds of effective ways of cooperation, and will continue to support the development of central and east European countries. We hope that the central and east European countries will further open up their financial markets.
Fifth, expand people-to-people and cultural exchanges. People hold the key to sound state-to-state relations and friendship comes from exchanges between the people. We need to increase exchanges in education, culture, health, sports, tourism and other fields. We should enhance the mutual understanding and friendship between people of the two sides, particularly the young people. China supports exchanges between institutions of higher learning of the two sides and hopes to see more students from central and east European countries in China. We also encourage more exchanges between our science communities. The central and east European countries have rich tourism resources. We will introduce such resources to the Chinese people and we support more central and east European countries in acquiring the Approved Destination Status (ADS) for Chinese tourists. We hope there will be more direct flight routes between us. We want to push forward our cooperation in human resources training and will invite more officials and technical personnel from central and east European countries to China for training courses.
Ladies and Gentlemen,
Since we adopted the reform and opening-up policy in 1978, tremendous changes have taken place in China. But the fact that China remains a developing country has not changed. The Chinese people's friendship towards people in central and east European countries has not changed. And our sincerity in pursuing win-win cooperation with you has not changed. We welcome enterprises from central and east European countries to join in China's development process, share our development opportunities and play their part in promoting our common development through concrete actions.
As a Hungarian saying goes, "Diligent people do not wait in idleness for the coming of tomorrow." I believe that, with a pioneering spirit, business people of the two sides will take this forum as a new starting point to seize the opportunities and work hand in hand to bring in a new phase in our economic cooperation and trade. Thank you.