Dear Colleagues:

It is a delight for me to attend the ASEAN-China Dialogue once again. Since its launch in 1991, the China-ASEAN dialogue process has witnessed the rapid development of our bilateral relations and made its due contribution to the enhanced friendship and cooperation.

The past year has seen profound changes in international and regional situation as well as rapid growth of China's relations with ASEAN countries. There have been constant exchanges of high level visits, markedly increased mutual trust in the political arena and continuously strengthened economic cooperation and trade. Despite volatility in the international economic environment as a result of the financial crisis in 1997, the bilateral trade volume between China and ASEAN countries has maintained an average annual growth rate of 15%. Our bilateral trade volume in the first half of this year reached 23.55 billion US dollars, representing an increase of 18.7% over the same period of the previous year.

Galvanized by the growth of bilateral ties, China's overall relationship with ASEAN has attained a new momentum of development. At the China-ASEAN summit held at the end of last year, the two sides reached important consensus on establishing a free trade area within the next 10 years and made agriculture, ICT, human resources development and the development of Mekong River Basin their key areas of cooperation at the beginning of the new century. Last year marked the first year after China's appropriation of an additional 5-million US dollars to the China-ASEAN Cooperation Fund. As a result, 10 new projects of cooperation got implemented, representing a record-breaking increase. The establishment of China-ASEAN Business Council has also added a new mechanism of cooperation. All these have not only further substantiated China-ASEAN Partnership of Good Neighborliness and Mutual Trust, but have also testified to the huge potential and bright future of China-ASEAN cooperation.

Now, I wish to share with you my views on how to keep the momentum of development of China-ASEAN ties and further expand and deepen our cooperation this year so as to better cope with the changed situation:

1. To comprehensively launch the negotiations on the free trade area to promote economic relations and trade between the two sides. Negotiations between China and ASEAN on the free trade area began at the working level in May this year. Two rounds of negotiations have already been held and the third round is currently underway in Thailand. Generally speaking, the negotiations have been progressing smoothly.

For both China and ASEAN, such negotiations are the first ever in history. It is thus only natural that difficulties and problems might occur in their process. The establishment of the free trade area is a major political decision made by the leaders of our two sides which bears directly on the overall interests of China-ASEAN relationship and long-term interests of both sides. It can also serve as a role model for promoting cooperation in East Asia, it is therefore imperative that our two sides give it full support to ensure a smooth launch of the negotiations. I am confident that as long as the two sides follow the principle of equality and mutual benefit and adopt an attitude of mutual understanding and accommodation, we will be able to solve various problems in the negations and lay a solid foundation for the signing of Framework Agreement on China-ASEAN Comprehensive Economic Cooperation at the Summit at the end of this year as well as for the formal launch of free trade area negotiations at the beginning of next year.

2. To comprehensively launch the development of the Mekong River Basin to promote ASEAN integration. The development of Mekong River Basin is one of the key areas of cooperation between China and ASEAN at the beginning of the new century. The first summit meeting of the Great Mekong Sub-region to be held by the end of this year will map out mid-term and long-term plans for the all-round development of the region. The Chinese side is working hard together with various parties concerned for the success of this meeting. China has been committed to the integral and comprehensive development of the Mekong River Basin, and cooperation in the upper Mekong River will not be carried out at the cost of the countries in the lower reaches.

The Chinese side has vigorously supported and participated in the ASEAN integration process. Last year, we announced special preferential tariff treatment towards Laos, Cambodia and Myanmar. We support the construction of Kunming-Bangkok highway and Kunming-Singapore railway. We wish the Initiative for ASEAN Integration Development Cooperation Forum to be held in Indonesia next month a success.

3. To comprehensively launch the cooperation in non-traditional security areas to deepen China-ASEAN relations. China's cooperation with ASEAN in non-traditional security areas has already got off to a good start. The two sides established a cooperation mechanism on fighting illegal drugs in October 2000. China, Laos, Myanmar and Thailand held a four-state ministerial meeting on fighting illegal drugs in Beijing in August 2001 and issued the Beijing Declaration. China is taking an active part in the AIDS control and prevention program in the Mekong River Basin and will host an AIDS Lab Networking Construction training course for ASEAN countries.

Non-traditional security issues such as terrorism are becoming all the more pronounced after September 11, posing a real threat to regional and international security. It is thus imperative that China and ASEAN step up our cooperation in this regard. We appreciate the joint statement on fighting terrorism issued at last year's ASEAN summit and support the Agreement on Information Exchange and Establishment of Communication Procedures among the Philippines, Malaysia and Indonesia. All these demonstrate the resolve of countries in this region to brave the challenges of non-traditional security problems. The Chinese side is ready to carry out concrete cooperation with ASEAN on combating transnational crimes on the basis of these statement and agreement. At the present stage, it is necessary to focus on effective intelligence exchange mechanism and exchange and training of law-enforcement officials.

To push for an all-round China-ASEAN cooperation, cooperation should also be expanded in other areas. This year, we will enter into memorandum of understanding on medium- and long-term agricultural cooperation. The MOU on the cooperation in the field of information industry is also being discussed. Moreover, our two sides boast huge cooperation potential in such fields as transportation and communication and tourism. Besides Mekong River development, the Chinese side wishes to take an active part in other sub-regional cooperation programs within ASEAN, for instance, in the East ASEAN Growth Area.

Dear Colleagues,

Deepened cooperation should be based on mutual trust in the political field. The Chinese side supports and appreciates the purposes and principles enshrined in the Treaty of Amity and Cooperation in Southeast Asia which has long been followed by ASEAN. Right now, we are actively looking into the legal procedures on acceding to the Treaty. We continue to be positive on joining the Treaty on Southeast Asia Nuclear Weapon Free Zone. Four rounds of negotiations have been held between China and ASEAN on the Code of Conduct in the South China Sea, yielding positive progress. We hope that further progress will lead to an early consensus between the two sides.

Next, please allow me to brief you on China's development.

In the past year, China's economy maintained a rapid and sound growth, with an increase of 7.3% of its GDP that reached 1.16 trillion US dollars. Our foreign exchange reserve amounted to 212.2 billion US dollars and total foreign trade volume exceeded 500 billion US dollars. China's membership in the WTO added new vitality to its development. In the first half of this year, the growth rate of China's economy reached 7.8% and its foreign trade volume totaled 270.71 billion US dollars, representing an increase of 12.3% over the same period of last year. We have every confidence of attaining the goal of a 7% economic growth rate for this year.

China's development is not only its intrinsic need, it also contributes to the development in Asia and the world at large. As a neighbor and trade and investment partner of China, ASEAN will be the first to benefit from China's growth. Some leaders of ASEAN member states have acknowledged China's economic achievement and its contribution to the regional economy in their recent statements, emphasizing that China's growth means new development opportunities instead of challenges. We appreciate these remarks. China is prepared to strengthen its multi-dimensional cooperation with ASEAN on the basis of mutual benefit and win for all so as to bring our bilateral ties to a new high.

Thank you!