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Speech by Ambassador Xu Jian at Conference How "Belt & Road" Influences China-CEE Relations? Opportunities and Challenges

(September 14, 2017,Hotel Bellotto)

Undersecretary of State Magierowski,

Director Dębski of PISM,

Director Huang Ping of Institute of European Studies of CASS,

Friends from thinktanks,

Ladies and Gentlemen,

It gives me great pleasure to join you at this conference to discuss how the Belt and Road Initiative influences China-CEE Relations. First of all, let me thank PISM and China-CEEC Thinktanks Network for putting together this grand gathering. It comes at a good time. In May, China held the Belt & Road Forum for International Cooperation, attended by heads of state or government from 29 countries, including Poland, Czech, Hungary and Serbia. Later this year, the 6th China-CEEC Summit will be held in Budapest to set out a roadmap for future cooperation.

Today with us we have senior scholars from renowned Chinese and CEE thinktanks, and also guests from government, business and education. As I see from the agenda, they will not only exchange strategic minds, but also discuss concrete ways for boosting cooperation. This is important, as China-CEE relations should be strategic for our countries, and beneficial for our peoples as well.

"The Belt and Road Initiative" is a hot topic in China-related conversation. It is proposed by China but belongs to the world. That's why it can be quickly translated into actions in just a few years, and had participants from over 140 countries, 80 international organizations at the Forum which made 270 concrete agreements. From 2014 to 2016, total trade volume between China and other Belt and Road countries exceeded 3 trillion US dollars, and China's overall investment in these countries surpassed 50 billion dollars. This initiative is a Chinese approach to promote openness and cooperation against the challenges in today's world. CEE countries are important partners for us, 13 out of the 16 countries have signed Belt and Road cooperation agreements with China.

The "16+1" cooperation coordinates with the principle of the Belt and Road Initiative, that is, "extensive consultation, joint contribution and shared benefits". It connects the 130 million people in CEE and 1.3 billion people in China, the 1.5 trillion US dollars GDP economy of CEE and the 10 trillion US dollars GDP economy of China. "16+1" format is also a creative endeavor to boost China-EU cooperation, an important platform for the Belt and Road cooperation in CEE. Since its first summit in Warsaw 5 years ago, it has built more than 20 mechanisms for trade, investment, people-to-people exchanges, local government, youth cooperation, with more to come. The cooperation is fruitful, reflected in many aspects.

First, trade and investment keeps growing. Against sluggish global economic growth, trade between China and 16 CEE countries raised from 43.9 billion US dollars in 2010 to 58.7 billion US dollars in 2016, accounting for a bigger share in China-EU trade. Last year, the growth rate was 4.3%. Although trade gap still exists at bilateral level, products like meat, beef, apple on CEE countries' export wish-list are entering Chinese market at a much faster pace. As for Chinese investment in CEE, though small in scale, it grows quite fast, and exceeded 8 billion US dollars in 2016.

Second, some major projects are completed or underway.  Chinese companies have invested or built power stations, flood-prevention projects in Bosnia and Herzegovina, Poland and Romania, purchased a steel mill in Serbia and soon turned it profitable. Major projects like the Budapest-Belgrade railway, China-Europe Land-Sea Express Line are proceeding. China Railway Express, launched in 2011, expands rapidly. Its lines further increase the connectivity between China and Europe, highlighting the geographical advantage of CEE as a transportation hub.

Third, financial cooperation is making progress. Today we have a topic, "is money the key for the Belt and Road Initiative?" For sure, money is not a panacea, but funding shortage is indeed a bottleneck. For this reason, we established the China-CEEC Financial Holding Company. We also encourage expanded cooperation on local currency settlement, support the Silk Road Fund and other financial institutions in financing "16+1" cooperation projects through diverse forms such as equity and bonds, or third party cooperation under the framework of EBRD. We believe that diversified financing with market-based operation would serve as a key to the cooperation, and its benefits will be shared.

Forth, our people-to-people contact is deepening. In the past 5 years, we have opened 5 direct flight routes between China and CEE countries, effectively promoted business and tourist travelling. We also established 5 Chinese medicine centers, 3 cultural centers in CEE, signed agreements of mutual recognition of academic degrees with 8 CEE countries. Some 10 thousand Chinese and CEE students go to study in each other's countries.

Yet these are not all the achievements. With growing mutual interests and needs, and better supporting mechanisms and tools, our cooperation faces great opportunities in future.

Of course, while we innovate and explore, there will be challenges and difficulties. In my opinion, we have to break through from 3 aspects. First is to create synergies. Search for the best way to cooperate, create synergies between national policies on bilateral levels, and between China's initiative and EU policies, as "16+1" is not dividing EU, but promoting a more balanced China-EU relations. Second is to be practical. China-CEE relations need deliverables to make it more solid. We need to turn agreements into actions, run the current cooperation steadily under market principles. Third is to innovate. Explore new areas for cooperation, improve local and SME cooperation, and think about better funding forms.

But how to build synergies, innovate and make the cooperation more widely shared? We have to focus on needs and problems, and gather our ideas. I hope today's discussion will be inspiring for China and CEE countries to seize opportunities, solve problems and achieve more in the Belt and Road and "16+1"cooperation.

Thank you for your attention!

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