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Keynote Speech at the Forum on A New Era of Canada-China Trade Relations by Ambassador Lu Shaye

(From Chinese Embassy in Canada)

2017/05/12

Mr. Gordon Houlden, Director of the China Institute at University of Alberta,
Mr. Stewart Beck, President and CEO of the Asia Pacific Foundation of Canada,
Ambassador Guy Saint-Jacques,
Ladies and Gentlemen,
Dear friends,

It is a great pleasure to attend in Vancouver the "Annual Chinese Investment in Canada Forum: A New Era of Canada-China Trade Relations". We exchange views, analyze problems and challenges, and put forward valuable ideas and suggestions, which is meaningful to maintain strong momentum of economic and trade cooperation between China and Canada.

I'd like to take this opportunity to extend my gratitude to China Institute at the University of Alberta for hosting this forum and to those who have long been committed to enhancing understanding and promoting cooperation between the two countries.

Recently, China-Canada economic and trade relations have gained much attention from both countries. Two weeks ago, the two sides launched in Beijing China-Canada Economic and Financial Strategic Dialogue. Almost at the same time, officials and experts from China and Canada held in Ottawa the Second Meeting of Exploratory Discussions on a Free Trade Agreement (FTA). On both occasions, the two sides had in-depth and fruitful talks.

We have also noticed the recent challenges confronting Canada's economic and trade relations with the United States, especifically, the frictions on NAFTA, softwood and dairy products. These challenges make some Canadian people ponder the question: Is China an increasingly important economic and trade partner of Canada or a mere spare tire in case Canada-America trade goes wrong? This is an acute question which concerns whether China-Canada economic and trade relations could have a further and sustainable development. We must take a clear-cut stand. From my point of view, China and Canada are indeed increasingly important partners in economic and trade cooperation. Regarding China as Canada's spare tire is not only shortsighted but also inconsistent with the interests of both countries.

From the historical perspective, China-Canada economic and trade cooperation has been in an accelerating development trend in general. When the two countries established diplomatic ties in early 1970s, the bilateral trade volume was merely 150 million US dollars. It increased to over 2 billion US dollars in the early 1990s, and to 8 billion US dollars in the early 21st century. According to Canada's statistics, the bilateral trade reached now 64 billion US dollars.

During their back-to-back visits last year, Chinese Premier and Canadian Prime Minister set the goal of doubling the bilateral trade by the year of 2025 based on 2015 statistics to reach approximately 120 billion US dollars. China has been Canada's second largest trade partner for quite a few years. The bilateral cooperation is not dispensable for both countries. In fact, it will continue to grow in both depth and breadth.

Against the current background of China's economic development and the global economic landscape, China is of increasing significance to Canada.

First, China has a growing weight in the world economy and contribute more and more to the latter. China is the second largest economy with a GDP of 11 trillion US dollars accounting for 15% of global economy. Currently, China maintains a medium-high speed of growth which is 6.5% to 7% and the yearly economic increment equals the aggregate of a medium-sized country. Both the International Monetary Fund and the World Bank are optimistic about China's growth forecast. Contributing over 30% to the global growth for years, China serves as a major engine of the world economy.

Second, with the expanding and upgrading domestic demands, China provides a huge market to the world. As urbanization develops rapidly, high-income people in China account now for over 20% of urban population, namely over 150 million people with a per capita disposable income of 10 thousand US dollars. Their purchasing power, equivalent to that of several medium-sized countries combined, can boom any target market where it is projected.

In the coming five years, China is expected to import 8 trillion US dollars of goods as well as 2 trillion US dollars of services. Chinese tourists will make 700 million overseas visits. By the year of 2020, China will build a moderately prosperous society in all respects and a massive and more mature Chinese market will bring unprecedented opportunities to the world.

Third, China's outbound investment maintains robust growth. In recent years, with the increasing of China's economic and technological competence and especially the steady progress of the "Belt and Road" Initiative, Chinese companies are significantly speeding up the pace of going global, and outbound investment and economic cooperation are flourishing.

According to the United Nations Conference on Trade and Development, China's direct outbound investment is taking up an increasingly larger share in the world despite a late start. At present, China has become a net exporter of capital and is expected to make 750 billion US dollars of outbound investment in the next 5 years.

Fourth, China will promote the higher-standard opening-up. China will keep its door wide open and not close it. China is deepening the reform of foreign investment management system and further open the service, manufacturing, and mining sectors to foreign investment. All enterprises registered in China, whatever domestic or foreign, will be treated equally by the Chinese government when it comes to license applications, standards-setting, intellectual property protection, government procurement, and will enjoy the same policy preferences under the Made in China 2025 initiative.

In 2016, China attracted 139 billion US dollars of FDI, reaching a record high. Meanwhile, the structure of FDI to China is getting optimized and upgraded. Foreign investment in China is transferring from labor-intensive industries to capital and technology intensive ones, and to sectors with high added value.

Dear Friends,

However, potential is not reality. No matter how bright prospects we have, if we don't take actions, they remain only mirage.

Since I came to Canada, apart from researching into the potential and prospects of China-Canada cooperation, I have been pondering over what on earth are the problems, obstacles and challenges facing our two countries. For example, do we have enough mutual trust? Do we keep up-to-date views towards each other? Are we overcautious and indecisive in our cooperation? Do we have the matching mechanisms for bilateral economic and trade cooperation?

As Chinese Ambassador to Canada, I hope the two sides can make the utmost efforts to unleash full potentials in our cooperation and move its level and scale to a new high. Therefore, I hope we will make concerted efforts as follows:

First,we should really treat each other as equal partners. We have many differences between us, but the differences should not impede bilateral trade and exchanges. China consistently upholds the stance of equal treatment, mutual benefit and win-win results in international cooperation. We do hope that Canada will no longer regard China as an abnormal country or a country that needs to be guarded against, and no longer feel sensitive when speaking of cooperation with China. More importantly, China's state-owned enterprises should not be regarded as scourge, as they are ordinary enterprises like those of Canada operating according to the market rules.

Second, we should view our cooperation from a strategic and long-term perspective. Never should we treat each other as spare tires, or regard our cooperation as an expedient. Signing a FTA is an important guarantee to expand and upgrade our cooperaton. We expect both sides to strive for an early consensus and sign the agreement.

Third, we should have the ambition to make our cooperation bigger and stronger. For the meantime, the science and technology are advancing with each passing day and international competition is getting more and more intense. If we are complacent over our current success and stand still, we will put ourselves in a more and more unfavorable situation. If China-Canada cooperation does not move forward, it will fall behind. We should never be content with the low-end cooperation, but actively promote our cooperation to the high-end. To carry out cooperation in high-tech products is an important option.

Fourth, we should inform Canadian people of the benefits brought by China-Canada cooperation. Though most Canadian people have benefited from and support friendly cooperation with China, we can still hear negative voices at times, which are detrimental to our cooperation. I hope the Canadian business people will step forward and brief Canadian people on the benefits of our cooperation in a bid to foster a friendly environment for further cooperation.

The day after tomorrow, the "Belt and Road" Forum for International Cooperation will be held in Beijing. Some young people from countries along the "Belt and Road" routes picked out four new inventions of China, which are high speed railway, Zhi Fu Bao--an online payment tool, shared bike and purchasing on line. They do that for fun indeed, nonetheless they describe a promising China.

Thank you for your attention.

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