Your Excellency Prime Minister Boungnang Vorachith,

Dear Colleagues,

It is a pleasure for me to come to Vientiane for another gathering with my colleagues to discuss the future of East Asia cooperation. First of all, I wish to express my sincere thanks to our host country for the warm hospitality.

Peace, development and cooperation increasingly become the main trends in the Asian situation today. Countries have more dialogues and stronger coordination and become more interdependent. Regional cooperation is taking off, accelerating the process of economic integration. Asian economies, having shaken off the shadow of the financial crisis and the impacts of SARS and the Avian Flu, have entered a new period of growth. Asia remains one of the most dynamic regions of the world economy.

The positive changes in Asia have taken place thanks to joint efforts among Asian countries for self-improvement, their open and cooperative policies, as well as the widening and deepening of multilateral cooperation in the region.

The advancement of Asian cooperation has deepened mutual trust and expanded common interests among various countries, enlarged space for common development and enhanced our capacity to meet challenges of globalization. Asian cooperation has become an irresistible trend of the times.

The precursor of this trend is ASEAN plus three (10+3) cooperation. Thanks to concerted efforts by all parties, 10+3 cooperation has maintained a good growth momentum. With rich results, improving mechanisms and growing influence, it has become the most dynamic and promising regional cooperation mechanism in Asia.

In the past year, it has made fresh headway as evidenced by the smooth implementation of the projects identified in the Final Report of the East Asia Study Group (EASG) and the establishment of four ministerial cooperation mechanisms on energy, health, combating transnational crime and information and telecommunication. Financial cooperation is going deeper and the implementation of the Chiang Mai Initiative is producing substantive results. The track two mechanisms such as the Network of East Asia Think-tanks and the East Asia Forum are active in making recommendations and policy proposals for the 10+3 long-term development. The new progress in those areas has pushed forward and solidified the basis of the 10+3 cooperation.

Dear Colleagues,

Regional cooperation is now a global trend on the upswing. East Asia cooperation should go along with this trend, keep pace with the times, and build on the past achievements and go a step further. We need to clarify its development orientation, deepen practical cooperation and lift it to a higher level. The 10+3 cooperation should be given a bigger role to play in promoting mutual benefit and a win-win prospect for countries in East Asia and peace and development in Asia as a whole.

The evolution of 10+3 into East Asia cooperation is conducive to regional economic integration and comprehensive cooperation among East Asian countries. It will be a long-term process of gradual accumulation, during which the following basic principles need to be observed:

- Consensus building and a proper pace. East Asia cooperation is an unprecedented grand endeavor that bears on the future of the region and the immediate interests of all parties. Consideration should be given to concerns of all parties and governmental, non-governmental and academic discussions and exchanges conducted at various levels and on multiple tracks, so as to gradually harmonize their views, achieve mutual accommodation and reach consensus.

- A good foundation and a down-to-earth manner. The existing mechanisms should be fully utilized and the short-term and mid-to-long-term projects put forward by the EASG vigorously implemented. We should close the gaps among members, reach out and bring benefits to the people, and lay a broad and solid foundation for the development of East Asia cooperation.

- A clearly defined direction and the leading role by ASEAN. The East Asia Community should be taken as the long-term objective of 10+3 cooperation and an East Asia Summit convened in due course on the basis of consensus. ASEAN should be supported in continuing to play a leading role in the process of 10+3 and East Asia cooperation.

- Giving play to advantages and forming synergy. Comparative advantages of all parties should be put to full use. Coordination among the three 10+1s under the 10+3 framework and between ASEAN and China, Japan and ROK should be strengthened. The 10+3 Unit of ASEAN Secretariat should play a stronger role in communications. Research should be conducted to identify cooperation projects with joint participation of ASEAN, China, Japan and ROK and explore the establishment of required mechanisms, so as to carry forward the spirit and further demonstrate the success of 10+3 cooperation.

- Openness, transparency and inclusiveness. It is necessary to uphold the principle of open regionalism, which requires efforts to extensively learn from and draw upon the experience of other regions in their development, strengthen communication and exchanges between the 10+3 cooperation and other countries and regions, keep cooperation process transparent, and increase understanding and support of all parties.

Dear Colleagues,

To make East Asia cooperation more comprehensive and intensive, I wish to make the following proposal:

First, to push steadily for the establishment of the East Asia Free Trade Area (FTA). FTA is a stage that cannot be skipped in the process of economic integration. It is also an immediate necessity for the economic development of countries in the region. As things stand now, the process of "ASEAN Economic Community" has been launched and consensus has been reached on China-ASEAN free trade in goods. Japan and ROK are negotiating respectively with ASEAN on FTA, while China, Japan and ROK are planning for joint academic research on free trade arrangement among themselves. These developments have paved the way for the establishment of East Asia FTA. The Chinese side is ready to take the initiative to launch the feasibility study of East Asia FTA and host the first expert group meeting in Beijing in April 2005.

Second, to deepen financial and investment cooperation. In this area, priority should be given in East Asia to using the rich foreign exchange reserve and capital within the region, improving investment and financing environment and building risk prevention and control capacity in the financial sector. The Chinese side is ready to provide financial support to the joint study on ASEAN+3 financial and monetary cooperation. To encourage investment cooperation of small and medium-sized enterprises (SMEs) will facilitate the participation of the private sector in East Asia cooperation. The Chinese side is ready to host the first "High-level Seminar on Promoting Investment by SMEs in East Asia" next year to study the specific ways and means to that end.

Third, to expand security dialogue and cooperation. Terrorism and transnational crime pose threats to all of us. We need to actively implement the Five-year Plan on Cooperation in the Fight against Transnational Crime, further enhance cooperation in the field of non-traditional security, and jointly keep our region peaceful and stable. Given the increasingly pronounced problem in maritime safety and security, I suggest positive consideration be given to stronger cooperation within 10+3 in this respect.

Fourth, to promote social, cultural, scientific and technological cooperation. Broad participation and support of people from all walks of life and from all countries in East Asia is indispensable to the sustained development of 10+3 cooperation. China will host the 7th Asia Arts Festival and the Asia Cultural Ministers' Forum in November 2005 and looks forward to receiving high-level delegations from ASEAN, Japan and ROK. The Chinese side proposes the establishment of 10+3 Youth Exchange Mechanism and stands ready to host the 10+3 Forum on Friendly Cooperation among Youth aimed at nurturing future forces for friendly cooperation in East Asia. To promote the application of and innovation in science and technology in the region, the Chinese side proposes that a joint research and development mechanism on science and technology in East Asia be put in place.

Fifth, to pool intellectual resources for 10+3 cooperation. Though the academic resources and track two mechanisms of 10+3 countries have their own advantages, there is overlapping in some areas. To increase communication, integrate resources and raise efficiency, the Chinese side proposes that the Network of East Asia Think-tanks, East Asia Forum, East Asia Studies Network, and Institute of Strategic and International Studies of ASEAN co-sponsor the "Joint Study Convention on East Asia Cooperation" in China in the latter half of next year to discuss issues relating to East Asia cooperation.

Sixth, to make sound plans for future East Asia cooperation. In the run-up to the 10th year of 10+3 cooperation, it is necessary for us to review and sum up the achievements and experience of East Asia cooperation since its inception and draw up a blueprint for its future. The Chinese side proposes that we take stock of the past and look to the future on the basis of the 1999 Joint Statement on East Asia Cooperation, and jointly issue a programmatic document on the future direction of East Asia cooperation, which can be entitled for the time being "East Asia Consensus". The Network of East Asia Think-tanks can be entrusted to make policy recommendations from an academic perspective.

Seventh, to support the 10+3 Unit. Since its establishment last year, the 10+3 Unit of ASEAN Secretariat has played a positive role in planning, coordinating and promoting cooperation in various fields. It is suggested that all countries give greater support to the Unit. The Chinese side will contribute US$200,000 to this end.

Dear Colleagues,

China has achieved leapfrog development in the 26 years of reform and opening-up with its socialist market economic system continuously improved and its overall national strength steadily increased. But we do face quite a few difficulties and challenges. Protracted and arduous endeavors are required to build a moderately prosperous society in an all-round way and to achieve the strategic goals of China's economic and social development.

Many people have a keen interest in the current macro-economic situation in China. I would like to hereby inform you responsibly that the overall economic situation in China is good. Since August last year, a series of macro-control measures have been adopted in a timely and decisive manner by the Chinese Government in response to the macro-economic problems. These measures are designed to adjust the economic structure, reform institutions and mechanisms, transform economic growth model, eliminate unstable and unhealthy factors in the economy, and ensure fairly rapid economic growth. The smooth economic performance in the first three quarters this year has suggested the notable effects of the macro-control. We are confident in achieving the anticipated goals of our macro economy.

Resources, energy and environment, the common concern of Asian countries, also pose challenges to China's development. As a large and populous country registering sustained economic growth and increasing demand for energy, China will base itself upon developing resources and improving energy efficiency at home. At the same time, it will strengthen its cooperation with other countries in the areas of resources, energy and environment. While trying to meet its domestic needs, China will also take regional interests into consideration and try to achieve sustainable development through cooperation.

Dear Colleagues,

China would not develop without cooperation with other Asian countries. Seeking development and security through cooperation is an important and integral part of China's foreign policy in the new era. Holding high the banner of peace, development and cooperation, China will adhere to the principle of building good-neighborly relationships and partnerships with neighboring countries and promote the policy of building an amicable, peaceful and prosperous neighborhood. China will actively participate in and promote Asia's regional cooperation, closely combine its development with the rejuvenation of Asia and integrate the maintenance of its own interests with the promotion of the common interests of all countries in Asia.

China stands ready to seek regional peace through cooperation. In the world today, countries are bound together by common interests in security. It is cooperation that represents the fundamental way to meet all kinds of complicated challenges and threats and to safeguard regional security. Only on the basis of mutual respect, dialogue and consultations, sincere cooperation and seeking common grounds while reserving differences, will the security of all countries be guaranteed. China will continue to strengthen security dialogue and cooperation with other Asian countries in a joint effort to maintain regional peace and stability.

China stands ready to promote regional development through cooperation. Asia is facing both development opportunities and severe challenges. With increasing international competition and the widening gap between the North and the South, the task of ensuring economic and financial security has become more onerous. Asian countries need to raise the awareness of win-win cooperation and push forward the process of regional cooperation and economic integration. China is willing to see common development through cooperation with other Asian countries.

China stands ready to bring about through cooperation a win-win situation in the region. It is the common aspiration and goal of all Asian peoples to realize the rejuvenation of their countries and nations. It is only through cooperation that Asia may close the development gap; it is only through cooperation that Asia may incorporate diversities and achieve common prosperity; and it is only through cooperation that Asia may truly rise and rejuvenate.

Rather than an expediency, the above-mentioned policies of China are a long-term strategic choice made in the interests of China's own development and in the common interests of the region. Therefore, they will not budge an inch as China grows stronger. The development of China constitutes no threat to other countries. Even a stronger China will by no means seek hegemony in whatever form in the region.

Dear Colleagues,

To promote East Asia cooperation is a glorious but arduous task that our times has given us. It is our common cause. Let us join hands in strengthening cooperation and building a beautiful future based on mutual benefit and win-win results for East Asian countries.

Thank you.