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Seizing Opportunities to Maintain and Advance China-U.S. <br>Economic and Trade Cooperation and Sub-national Exchange

—Vice Foreign Minister Xie Feng’s Remarks at a Virtual Dialogue with Representatives from the U.S. Business Community and States and Cities

2021-11-30 20:30

Friends from AmCham China, AmCham Shanghai, USCBC and CASIC,
Ladies and Gentlemen,

It’s always a pleasure to talk to representatives from the U.S. business community and states and cities. With courage and foresight, you were among the first to come to China since reform and opening-up, or what we in China say “the first to taste the crab”. With commitment and resilience, you have taken firm root in China for decades. With resourcefulness and ingenuity, you have explored effective working modes such as virtual visits and “doorknocks” even during COVID. So let me first of all pay tribute to you for what you have done.

Our meeting today cannot come at a more fitting time, right on the heels of two historic events, one in China, and the other between China and the United States. Both are good news and will have a direct impact on you.

The first major event is the successful conclusion of the Sixth Plenary Session of the 19th CPC Central Committee.

This important plenum was held at the centenary of the CPC and a historic juncture where the Two Centenary Goals converge. The Central Committee adopted the Resolution on the Major Achievements and Historical Experience of the Party over the Past Century, which answers a question of fundamental importance: namely why the CPC succeeded in the past, and how it will continue to succeed in the future.

The Resolution is a proud scoreboard that reviews the CPC’s major achievements and historical experience over the past century.

It explains how the CPC has led a nation, once on the verge of collapse, to liberation and independence; how the CPC has led a country, once poor and weak, to become the world’s second largest economy; and how the CPC has completed two miracles in a huge country, namely rapid economic growth and long-term social stability.

In the meantime, China has developed the world’s biggest systems of social security and universal education, and lifted 770 million people out of extreme poverty. The 1.4 billion Chinese people now live a moderately prosperous life. All these not only benefit each and every Chinese but also represent historic contributions to the world.

These facts help to show that the CPC is one of the most successful political parties in the world, and socialism with Chinese characteristics is a most successful development path that fits China’s conditions. The 10 points of experience summed up in the Resolution are the recipe for the CPC’s success, and hold the key to the dynamism and continued success of China.     

The Resolution is a future-oriented declaration that the CPC is leading the Chinese people on a new journey.

The CPC is by no means complacent about what it has accomplished. China’s development is still uneven and inadequate. Our per capita GDP is only one sixth of that of the U.S.

The aspirations of our people for a better life is our mission. The CPC will not rest on its laurels. We will keep working hard and lead the Chinese people to build a modern socialist country in all respects and realize the Second Centenary Goal.

We will ground our work in this new stage of development, apply the new development philosophy, foster a new development paradigm, and promote high-quality development. We need to both make the economic pie bigger and divide it fairly. We are encouraging those having got prosperous first to help others catch up and expanding the middle-income group, so as to steadily achieve common prosperity for all.

The Resolution is a sincere invitation to the world as China welcomes with open arms the U.S. and other countries to share in its development opportunities.

The reform and opening-up was a crucial move in making China what it is today. As stressed by President Xi Jinping recently at the opening of the fourth China International Import Expo, we will not change our resolve to open wider at a high standard, and we will not change our determination to share development opportunities with the rest of the world.

China has introduced a series of additional policies to further open up its economy. The negative list for foreign investment has been shortened by two-thirds in four years; the agriculture and manufacturing sectors are essentially liberalized; foreign equity caps on insurance, securities, fund management and futures services have all been lifted. Citigroup, BlackRock and J.P. Morgan are among the first American firms to benefit from these policies.

In the 2020 edition of the catalogue, the number of Chinese industries open to foreign investment grew by 12 percent. Economic reliefs in response to COVID have been applied to domestic and foreign firms alike.

As a Chinese proverb goes, “When spring has warmed the stream, ducks are the first to know.” Capital is most sensitive to economic conditions and “vote with its feet”. Last year, China became the largest destination of foreign capital flows — a vote of confidence in China’s business environment and development prospects. China’s door will only open wider and will never be closed. The world will benefit from the strengths of China’s stability, system, market, production factors and human resources as more dividends are released.

The second major event I referred to earlier is the virtual meeting between President Xi Jinping and President Joe Biden.

The successful virtual meeting took place two weeks ago. It had great significance not only for China-U.S. relations, but also for international relations. In a good atmosphere, our Presidents had candid, in-depth and constructive discussions, and the meeting was extended several times to three and a half hours in total. It was a substantive and fruitful meeting.

The meeting augurs well for both China and the U.S., and the world at large.

Both China and the U.S. are at a crucial stage of development,and the world is in a time of turbulence and change. Our two countries are like two giant ships battling high winds and rough waters. A presidential meeting on issues of strategic, overarching and fundamental importance will help steer the course of China-U.S. relations. It is of great significance and will have a far-reaching impact.

During the meeting, both Presidents underscored the importance of our bilateral relationship and their belief that we must get it right and never mess it up. Both expressed their opposition to a “new Cold War” or confrontation and conflict between China and the U.S. They sent a strong message to our two countries and the world that China-U.S. relations should and must return to the right track of sound and steady development.

The meeting has raised international expectations and provided a palpable sense of stability and certainty for the world. Shortly after the meeting was concluded, stock markets rallied with an average 0.64 percent rise in China’s three major stock exchanges and a 0.43 percent rise in the three major U.S. stocks indexes.

The meeting reflects China’s sincerity and sense of responsibility in developing its relations with the U.S.

With farsightedness and vision, President Xi Jinping put forward three principles for China-U.S. ties in the new era, namely mutual respect, peaceful coexistence and win-win cooperation. He also highlighted four priority areas. First, shouldering responsibilities as major countries and marshalling a global response to acute challenges. Second, acting in the spirit of equality and mutual benefit to promote exchanges at all levels and in all areas and generate more positives for China-U.S. relations. Third, managing differences and sensitive issues constructively to prevent China-U.S. relations from getting derailed or out of control. And fourth, strengthening coordination and cooperation on major international and regional issues and provide more global public goods.

The meeting generates important common understandings conducive to China-U.S. practical cooperation.

The two sides agreed to maintain communication on macroeconomic policies, support world economic recovery and guard against economic and financial risks. The two sides also agreed to work together on global issues such as energy security, climate change and public health. This will help stabilize and improve the international economic environment and address what are dubbed “gray rhinos” and “black swans”, high-impact events that are often neglected or dismissed.

President Xi Jinping pointed out that our two countries enjoy common interests in a wide range of areas and should complement each other and make the pie bigger for China-U.S. cooperation. He highlighted the economy, energy, education, science, technology and environment as potential growth areas and opportunities for China-U.S. cooperation.

The two sides agreed to fully harness the dialogue channels and mechanisms between our economic, trade and financial teams to advance practical cooperation and resolve specific issues. This will help anchor expectations and address each side’s concerns.

President Xi Jinping affirmed that China is fostering domestic and international economic circulations with greater scope and scale, and building a business environment that is more market-oriented, law-based and consistent with international standards. This is a reassuring statement to the U.S. and the rest of the world.

What is perhaps of immediate relevance for you is that President Xi Jinping announced China’s readiness to upgrade fast-track travel arrangements with the U.S.

The U.S. business community have raised difficulties in traveling to China amid the pandemic. We attach great importance to your concerns, and President Xi Jinping is personally committed to seeing the issue resolved. Of course, the fast-track arrangement will also include contingency plans such as “circuit-breaker” measures, which are aimed to ensure both effective COVID response and sound economic and social development, lower the risks of cross infection among travelers to China, and help American firms here operate in a safer, better protected and more sustainable way.

Friends, the Sixth Plenum and the virtual presidential meeting are giving us more confidence about the future.

I encourage you to act quickly, leverage your strengths, get a head start and become “early birds” in reaping benefits from China-U.S. cooperation.

First, I hope you will be participants in and contributors to China’s opening-up at a higher level so as to achieve win-win and all-win outcomes.

Fortune will smile on those who choose to work with China. Among the over 70,000 American businesses in China, 97 percent are reaping profits. It is estimated that China will import 2.5 trillion dollars worth of goods and services annually in the coming 15 years, its middle-income group will swell to 800 million by 2035, its airlines will need 8,700 new aircraft by 2040, and its green finance market will be worth 100 trillion yuan by 2060. All this will inject tremendous impetus into economic, trade and sub-national cooperation between our two countries.

Recently, China and the U.S. released a joint declaration on enhanced climate actions on the sidelines of COP26. Green economy will be a new growth area in our cooperation. We have every reason to pursue mutually beneficial cooperation in PV technology, circular economy, energy-efficient buildings, low-carbon transportation and power batteries.

Incidentally, maybe you’ve noticed that other players are also doing the best. In the first ten months of this year, the EU’s trade with China exceeded 670 billion dollars, roughly 50 billion dollars more than U.S. trade with China. Also in the first ten months of this year, the number of freight services between China and Europe has already surpassed the total of last year and it is still growing with a strong momentum. So I encourage our American friends to step up with eyes wide open, or you might miss the “express train” of China’s modernization.

Second, I hope you will be pioneers and cheerleaders for stabilizing and promoting China-U.S. relations.

China-U.S. economic cooperation and trade do not happen in a vacuum and are inevitably influenced by the broader relationship. As a Chinese proverb goes, “When a tree flourishes, people can enjoy the cool of its shade.” When the overall atmosphere of China-U.S. relations is good, economic cooperation and trade will do better. When bilateral relations deteriorate, business communities can’t expect to be unaffected and make money quietly.

It has come to my attention that over the past four decades and more, even when China-U.S. relations encountered difficulties, the China business reports released by AmCham China, AmCham Shanghai, USCBC and relevant U.S. states and cities presented the situation objectively, pointed out that China-U.S. business ties are mutually beneficial, and expressed confidence in and commitment to China-U.S. cooperation. We highly appreciate that, and we hope you will continue to play a unique and important role, speak out for what is right, and encourage the U.S. administration to follow a sensible and pragmatic China policy and to stop waging trade war, industrial war or technology war and stop creating confrontation or conflict over values, ideology or geopolitics.

Third, I hope you will be carers and doers in advancing mutually beneficial cooperation between China and the U.S., and oppose the politicization of economic and trade issues.

As an early comer, the United States used to be an advocate of globalization. I still remember in the early 2000s and before that, the United States went to great lengths to persuade China to join the WTO and lectured us about free trade and market economics. To be honest, when diving into the vast ocean of the global market, China had its fair share of choking and ran considerable risks. Fortunately, although we were a latecomer to the game, we overcame the obstacles.

If the early comer can’t accept the fact that the latecomer may do better than the early comer in some areas, and tries to change the rules of the game to hold the latecomer back, it would be most narrow-minded, not to mention unfair. International trade rules are decided by countries through consultation and ought to be observed by all. They should not be misused, discarded or selectively implemented. Disrupting the rules may bring some benefits for the time being, but would eventually upset the cart and rattle markets, and it won’t do any good to anybody.

The U.S. side used to be a strong advocate of the view that business is business. But these days, political correctness seems to trump everything in the U.S. It reminds me of a saying in China during the Cultural Revolution, “I’d rather have socialist wild grass than capitalist crop seedlings.” Be it decoupling, supply cutoff, “a small yard surrounded by high fences” or trying to form small supply chain blocs against China, they all violate the laws of the market, disrupt international division of labor, disturb global industrial and supply chains, and try to divide the world economy into two parallel systems. The business community will have to bear double costs, in which situation how could they enjoy efficiency or benefits?

I hope that our friends in the business community can take a clear stand against politicizing economic and trade issues and abusing the concept of national security. I hope you can work on the Biden administration to lift the tariff hikes, stop suppressing and sanctioning Chinese businesses, prevent the passage on Capitol Hill of the Innovation and Competition Act and other acts on China. It is important to create a level playing field for Chinese and American businesses to engage in healthy competition rather than vicious zero-sum games. We must help both sides grow rather than drag them all down.

Fourth, I hope you will build bridges and ties of friendship between Chinese and American people, and help improve mutual understanding and trust.

Amity between the people holds the key to good relations between countries. Working and living here, you all engage extensively with Chinese society and interact in depth with Chinese people. Among foreigners, you know China the best and should have the most say. I hope you will spread the word on what you have seen, heard and felt here to the other side of the Pacific. No need for exaggerated praises. Just tell the truth, so that the average Americans can have a full and objective picture of the real China.

I’m sure you are all aware that issues related to Taiwan, Xinjiang, Hong Kong and Tibet concern China’s sovereignty, security and development, which are our core interests. They bear on the national sentiment of 1.4 billion Chinese people. For the Chinese side, there is simply no room for compromise. I hope you will use your influence to urge the U.S. administration to truly abide by the three Sino-U.S. joint communiqués and honor the true one-China policy, which should not be altered, distorted or negated.

The Olympic Games are a celebration of our common humanity. The principle of political neutrality is enshrined in the Olympic Charter. Earlier this year, the International Olympic Committee has unanimously decided to add the word “together” to the Olympic motto, which now reads “Faster, Higher, Stronger — Together”. Boycotting the Olympic Games for political reasons would harm the interests of athletes and go against the common aspiration of the international community. Beijing will host the Winter Olympics next February, and Los Angeles will host the Summer Olympics in 2028. China and the United States need to support each other and jointly honor the Olympic spirit of solidarity, friendship, fair play and mutual understanding. In this regard, I count on positive contributions from the U.S. business community and states and cities.

Thank you.

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