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Remarks of Ambassador Wang Guangya, Permanent Representative of China to the United Nations, at US-China Relations Forum of Committee for Economic Development Annual Meeting
(20 May 2004, New York)


Mr. Charles Kolb,
Ladies and Gentlemen,

At the outset, let me thank you, Mr. Charles Kolb, for your invitation and kind remarks. I also wish to thank the Committee for Economic Development (CED) for organizing this US-China Relations Forum.

Before I came here, I took some time to study the history of CED. From what I read, I become familiar with its rich and prestigious history. Sixty years ago, CED through its work, exerted important influence upon the creation of the Bretton Woods Institutions and the administration of Marshall Plan. Sixty years after, CED is committed to bringing the best of business thinking to bear on critical public issues that are in the interests of the United States. Above all, CED sticks to the principle of integrity, impartiality, non-partisan and non-ideology throughout its work, which gives me a strong impression.

Today, I am very happy to have this opportunity to be here with friends from American business community, enterprises and academia to discuss China-US relations. I would like to touch upon 4 issues, namely, China-US relations, China-US economic ties, prospects of our bilateral relations and China's economic development and its future plan.

Ladies and Gentlemen,

This year marks the 25th anniversary of the establishment of diplomatic relations between China and the United States. Over the last 25 years, China-US relations witnessed ups and downs. Thanks to the common efforts, our bilateral ties have become closer with mutual interests increased and basis of cooperation reinforced and areas of cooperation widened. As described by Secretary of State Colin Powell recently, the bilateral relations are at their best in history. I fully concur with his judgment. This can be proved by the following.

Firstly, the two sides have conducted frequent high-level exchange of visits and in-depth political dialogues in recent years, thus creating conducive environment to the stable development of our relations.

Secondly, the two sides have carried out comprehensive and effective cooperation in world affairs. We have established a regular and cross-sector mechanism to combat terrorism in a joint endeavor. We have maintained close cooperation and coordination on the Korean Peninsular nuclear issues and working towards a nuclear-free peninsular in a peaceful way. We have also conducted candid and pragmatic dialogues on Iraq, Afghanistan, and proliferation of WMD.

Thirdly, the two sides have become major trading partners. The United States is now China's second largest trading partner. Likewise, China is the third largest and the fastest growing exporting market to the United States. 25 years ago, the trade volume between the two countries was less than 2.5 billion US dollars, and now surpassing 100 billion US dollars. The United States has more than 40,000 investment projects with 43 billion US dollars invested in China in real term. Characterized by the interwoven interests, the economic and trade ties between the two countries have laid a solid foundation for further development of our bilateral relations.

Fourthly, bilateral relations have also covered extensive areas such as finance, environment, education, science and technology and public health through various channels, at various levels and with various forms. We have seen more frequent exchange of visits, involving more than 1 million persons each year. These will further deepen the friendship and understanding between our two peoples. Undoubtedly, they are also conducive to the future development of China-US relations.

Now, I wish to focus on a number of issues in our trade relations, which might be of your interest. I hope this will help further our mutual understanding and trust.

On the imbalance of China-US trade, it is true that United States has deficits in its trade with China. Here, let me give you more details: 1. In its trade with China starting from 1972, US had enjoyed surplus for 21 years. It is only from 1993 that China began to have surplus. 2. More than half of China's trade with US is conducted by foreign companies, which are mainly American companies. China's exports to the United States are mainly labor-intensive commodities, and the majority of these commodities are no longer manufactured in the States. So even if you cease importing them from China, you have to import them from other countries and regions. 3. Over the years, Chinese enterprises have sent many commercial delegations to the United States and made enormous efforts to tackle the imbalance in China-US trade with a hope to purchase bulk of commodities. However, it is insufficient to have China's unilateral efforts alone. It is necessary for the United States to show sincerity and take concrete actions, and ease the unreasonable restrictions on its hi-tech exports to China.

On China's status of market economy, this is an important question that needs to be solved in China-US economic relations. When Premier Wen Jiabao visited the United States at the end of last year, he expressed his hope to President Bush that the United States would explicitly recognize China's status of market economy.

China started its structural reform on market economy in 1979. The building of market economy was written into the Constitution in 1993, laying the legal foundation for market economy reform. After more than 20 years of practice, China has basically established its market economic system. After China joined the WTO 2 years ago, China has revised over 2,500 laws and regulations, and has earnestly fulfilled its obligations. China's economy is now functioning under the conditions of market economy. Now it is the market that sets the prices.

Recently some developed countries have decided or are considering recognizing China as a market economy. Some American scholars have also believed that China's economy is more and more open and domestic competition is increasingly fierce. They have pointed out that China has in fact opened its market wider than some countries regarded as market economies. They argue that it is time that China should be regarded as a market economy. I hope that friends wishing to see healthy development of China-US relations will actively push for an early solution to this issue.

On intellectual property rights, this is another big concern of the United States. We have adopted a number of measures, including setting up a leading group headed by Vice Premier Wu Yi; imposing heavier punishment on violations against intellectual property rights and, through legal interpretation, lowering the threshold of criminal punishment on violations against intellectual property rights; carrying out constant control and management in each related area; and increasing public awareness through education. These will help China continue to improve its intellectual property rights system, and enhance legal protection and law enforcement in this regard.

At the same time, China is ready to learn from other countries, and draw on the best practices of other governments, enterprises and the related international organizations.

The trade and commercial ties are important basis for China-US relations. They will have major impacts on overall and healthy development of our relations in the new century. I think the key to the resolution of differences in our economic and trade relations is to enhance consultations and dialogues on an equal footing, with a view to bring benefits to each other, expand cooperation, seek common ground and shelve differences. We must avoid politicizing our economic and trade differences. The high-level dialogue of China-US Joint Commission on Commerce and Trade (JCCT) held on 21 April this year marks a good beginning in this regard. The two sides had in-depth and candid exchange of views, and reached consensus on quite a number of issues. It shows that problems existing in our economic and trade relations can be solved through consultation mechanisms. We hope that the upgraded JCCT becomes a platform for better interactions and development in our two-way trade.

Ladies and Gentlemen,

China-US relationship is one of the most important bilateral relations for China. Looking into the prospects of China-US relations, I am full of confident. This is because,

First of all, by entering into the 21st century, mankind is faced with increasingly drastic and complex challenges. While the traditional forms of threat to security still exist, many non-traditional threats are spreading rapidly. The United States is the biggest developed country, and China is the largest developing country in the world. Facing the challenges, we have extensive common interests and shared responsibilities. To further enhance our cooperation is in the fundamental interests of our two peoples.

Second, our economic and trade cooperation will enter into a strategic time. At present, US economy is moving ahead strongly, and China's economy is growing rapidly. The United Nations, the World Bank and the International Monetary Fund (IMF) have indicated in their studies that the two economies have been serving as the engine and locomotive for the global and regional economic recovery and growth. Such momentum will create new opportunities and instill new vitality into our economic relations and trade.

Last but not least, in an increasingly globalizing era, no country can act alone but rely on each other, in anti-terrorism, in non-proliferation of weapons, in attaining financial stability, in maintaining open market as well as in environment protection and preventing infectious diseases. The efforts of the international community are also required in dealing with the existing regional turbulences and wars. The enhanced cooperation between us, both as permanent members of the UN Security Council, is conducive to the resolution of these problems and to the maintenance of world peace and stability. It is in the interests of all sides.

Ladies and Gentlemen,

Now, I would like to brief you on the current economic situation in China and its future development.

Over the past 25 years since China started reform and opening up to the outside world, China has achieved historic progress in economic development and building-up of national strength. China's GNP has reached 1,400 billion US Dollars, ranking the 6th in the world. China has become the 5th largest investor and one of the six largest trading states in the world. The entry into the WTO marks the completion of China's all directional pattern of opening up. More than 400 of world's top 500 companies have opened their sub-companies in China. China has indeed become a huge market.

Over the past 25 years, the Chinese people have also achieved historic improvement in their living standard. During the 1980's, we basically solved the problem of insufficient food and clothing for our people. From 1990's, the Chinese people have been experiencing the transition from sufficient food and clothing to a fairly well off way of living. According to Mr. Deng Xiaoping's development strategy of realizing China's modernization in three stages, we have accomplished the first two stages, and we are now at the third stage. Based on the Chinese Government's objective of building a well off society in all aspects, by 2020, China's GDP of 2000 will be quadrupled, making it up to over 4,000 billion US Dollars, and with an annual import of 1,000 billion US Dollars. The Chinese people will then enjoy a fairly affluent life.

Though there will be problems and difficulties ahead of us, we are full of confidence in future development of China in the coming years.

There are two priorities in our economic development now. First, it is the development of the western part of China. Second, it is the revitalization of the old industrial bases in the northeastern part. The implementation of these two strategies will greatly stimulate and help maintain China's strong and steady economic growth. This will also provide the world, including the Americans, with enormous opportunities. I hope our dear friends present here today will not miss them.

Ladies and Gentlemen,

Both China and the United States are great nations, great countries with great civilizations. Our two countries are shouldered with the heavy task of maintaining world peace and development. China-US relations go beyond bilateral relationship. It transcends our national boundary, bearing on the future of China, the future of the United States, and the future of the entire world.

In conclusion, I would like to quote remarks on China-US relations by Mr. Deng Xiaoping 25 years ago: in the interests of our two nations and of world peace, we are required to frame our relations in the context of the overall international situation and from a long strategic point of view.

Let me finish by saying, we must treat each other with an open mind, handle differences with far-sightedness and wisdom, and enhance cooperation in the spirit of mutual benefit and complimentarity, mutual understanding and mutual trust. Let us push forward the constructive and cooperative relations between our two countries and deepen it in a healthy and stable way. Let us joint hands in forging a bright future for China -US relations.

Thank you very much.

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