Keynote Speech by H.E. Li Keqiang

Premier of the State Council of the People's Republic of China

At the Malaysia-China High-Level Economic Forum

Kuala Lumpur, 23 November 2015

Deputy Prime Minister Ahmad Zahid Hamidi,

Ladies and Gentlemen,

It is my great pleasure to join you, business leaders and representatives, at this High-Level Economic Forum. In his speech on behalf of Prime Minister Najib, the Deputy Prime Minister has envisioned a brighter future of our relations, and I cannot agree more.

There is an old saying in China, "When doing business, one talks about business." The reality is, business is closely related to politic affairs, culture and other matters. The world we live in faces not only economic challenges, but also threat from terrorism. The recent spate of terrorist attacks in different parts of the world has nothing to do with religion or ethnicity. What it challenges is the bottom line of humanity and human civilization. China will stand with Malaysia and all other countries to fight terrorism of all forms, in order to provide the security guarantee for economic development and foster stable expectations for the market.

Yesterday, I was in Melaka, where China's Guangdong Province is engaging in investment cooperation. The Chinese government will support and promote good progress in such cooperation. There I visited the Cheng Ho Cultural Museum and the Baba Nyonya Museum. More than 600 years ago, Zheng He (or Cheng Ho), the great Chinese navigator of the Ming Dynasty, led the world's most advanced fleet on seven expeditions to the western seas, and for five times he passed through Malacca. He carried the mission to promote peace, enhance friendship and conduct trade. He also helped the countries he visited to settle conflicts and disputes and maintain tranquility at sea. Zheng He was an envoy of peace. What he did embodied the essence of the Chinese cultural tradition which puts premium value on peace. For thousands of years, the Chinese people have pursued peace, openness and inclusiveness. We will carry forward this fine tradition and live in peace with all countries in a common pursuit for development.

Some of Zheng He's crew members stayed and prospered on this land. Their offspring are called Baba Nyonya, who are the seeds and symbol of China-Malaysia friendship. In the ensuing hundreds of years, many more Chinese came to Malaysia to start their life and business here. They integrated with the local communities and lived in harmony with other ethnic groups, contributing their share to Malaysia's economic and social development and friendship between our two countries. This inseparable bond between our peoples is our greatest strength to develop all-round cooperation. It is also an important reason why our relations have been at the forefront of China's relations with ASEAN countries.

Today, China and Malaysia enjoy close exchanges. We visit each other just like visiting a close relative. In 2013, President Xi Jinping paid a successful visit to Malaysia and upgraded the bilateral ties to comprehensive strategic partnership. In 2014, China-Malaysia trade reached US$102 billion, ten times the size of the 2000 figure or more than one fifth of total China-ASEAN trade. Mutual visits between our countries has exceeded 2.1 million. These concrete results are the fruit of our hard work together.

Ladies and Gentlemen,

Both our economies are at a crucial stage of transformation and upgrading. Our relations are at their best in history. China is ready to expand its practical cooperation with Malaysia in all fields to promote development in both countries and cement the good-neighborly and friendly relations with ASEAN. In this context, I suggest that we work together in the following fields.

- Synergize our development strategies. China and Malaysia have both formulated forward-looking strategies for development. China is in the process of drafting its 13th Five-Year Plan. It will pursue innovative, coordinated, green, open and shared development, and will complete the building of a moderately prosperous society in all respects by 2020. As long as we keep the annual growth rate at above 6.5%, we will, through hard work in the next five years, make China's per capita GDP reach around US$12,000 by 2020. For Malaysia, it will soon start its Eleventh Malaysia Plan 2016-2020, and is speeding up efforts to promote economic development and improve people's lives. Its goal is to become a high-income nation by 2020. Given the high degree of consistency between the development goals of our two countries, we can work closely to form synergy, carry out win-win cooperation, and help each other as we both endeavor to avoid the "middle income gap" by 2020. We need to make hard efforts to achieve these goals, and our business communities have a lot to do in this context.

-Enhance cooperation on transport infrastructure. China is working with countries concerned to advance the Belt and Road initiative, which could well align with the Master Plan on ASEAN Connectivity. China is ready to step up cooperation with Malaysia on infrastructure and industrialization. After years of development, China has entered the mid-to-late stage of industrialization. We enjoy advanced and cost-effective productivity in iron and steel, building materials and other areas. China's investment in Malaysia for cooperation on production capacity will help lower the cost of local infrastructure. Malaysia has some advanced equipment and technologies to offer, and we welcome Malaysian companies to invest in China. Growing two-way investment will help boost the economic development of both countries.

- Expand the scale of trade and investment. Trade is the basis of bilateral business relations. In line with the five-year program for economic and trade cooperation, China and Malaysia may expand the scale of trade, facilitate the participation of the private sector, and support cooperation between our SMEs and the service sectors. China and ASEAN just signed a protocol on an upgraded FTA, which will certainly bring more business opportunities to our companies. China will expand trade in services with ASEAN countries and provide easier market access. We hope that Malaysian companies will leverage their strengths, seize opportunities, and bring bilateral trade to a higher level.

-Deepen financial cooperation. There are many destabilizing factors in the global financial market. China is ready to strengthen financial cooperation with Malaysia and work with it for a more stable financial market. China will continue to purchase Malaysia's government bonds in line with market principles, and will issue RMB bond in Malaysia. China will offer an RMB50 billion yuan RQFII quota to Malaysia, and I hope you will help spread this positive news to boost market confidence. I believe that strong financial support will help better advance the practical cooperation between the two countries.

- Build a solid foundation for people-to-people exchanges. There is a broad prospect for cultural and people-to-people exchanges between our two countries. During my visit, our two countries will sign an MOU on the opening of the Chinese Cultural Center in Malaysia. We need to deepen cooperation between universities and think tanks and expand the exchange of students. China's Xiamen University will open its campus in Malaysia. This not only demonstrates the depth of people-to-people exchanges between China and Malaysia, but also the openness of the Malaysian government and its people. There are many Chinese elements in the Malaysian culture, and many Malaysian elements in the Chinese culture. Our cultures, closely linked as they are, offer an ideal environment for closer cooperation. The Chinese government will provide more convenience for Chinese tourists traveling to Malaysia, and I hope that Malaysia will provide sufficient accommodation for the increasing number of Chinese tourists. This will be good for closer communication between our two peoples, so that our friendship will be passed on from generation to generation.

Ladies and Gentlemen,

Confronted with a sluggish world economy and various domestic challenges since the beginning of the year, the Chinese economy is on the whole stable and performing within a reasonable range. GDP grew by 6.9% in the first three quarters of this year, and is expected to achieve the targeted growth rate of around 7% for the whole year. China remains an important engine of steady growth for the world economy. And it is heartening to see the positive changes in China's economic structure. Our service sector now accounts for half of GDP, and consumption contributes nearly 60% to growth. New technologies, products, industries and business models have kept emerging. And the quality and performance of growth have further improved.

The Chinese government is taking strong measures to advance structural reform. We have taken steps to fully leverage the decisive role of the market in resource allocation, and give better play to the role of the government. We will foster the twin engines of growth, i.e. by promoting mass entrepreneurship and innovation and by increasing public goods and services. China has a 1.3-billion population, a 900-million workforce, and 150-million workers with multiple skills. We are taking coordinated steps to advance the new type of industrialization, IT application, urbanization and agricultural modernization to unleash the huge potential of domestic demand. Meanwhile, we have sufficient policy options and tools for macro regulation and rich experience to tackle risks and challenges. We are fully capable of maintaining medium-high speed of growth and moving towards the medium-high level of development.

China will open even wider to the outside world and get more integrated into the world economy. It is expected that in the next five years, China will import a total of US$10 trillion of goods. We will support our companies to go global, and gradually open market access in the financial, education, health care, old-age care and other sectors. This will bring new business opportunities to the business communities of other countries. We in China have a saying that "he who stands on the waterfront pavilion will be the first to see the moonlight". Malaysia is a close neighbor of China, and a close neighbor is better than a distant relative. China is ready to open up wider to Malaysia, and trade and investment between China and Malaysia hold out broad prospects.

Ladies and Gentlemen,

I know that makanan nyonya is quite famous in Malaysia. It is a perfect fusion of Chinese cooking method and Malaysian spices and ingredients, and is a vivid example of the deep integration between our two countries. I am confident that as long as our two countries, our business communities in particular, stay united and remain enterprising, we will produce good results in our practical cooperation, results that are as heartening to see as the makanan nyonya. In this way, we will not only bring benefits to the people of our two countries, but also contribute to prosperity and development in the whole of Asia.

Terima kasih!