Speech by H.E. Hu Jintao
President of the People's Republic of China
At the APEC CEO Summit

Vladivostok, 8 September 2012

Mr. Andrey Kostin, Chairman of APEC CEO Summit 2012,
Ladies and Gentlemen,
Dear Friends,

I am delighted to meet you, the Asia-Pacific business leaders, here in the beautiful Vladivostok and address the theme "Infrastructure for Sustainable Growth".

The world economy today is recovering slowly, and there are still some destabilizing factors and uncertainties. The underlying impact of the international financial crisis is far from over. Some countries are confronted with complex and difficult sovereign debt problems. Protectionism is on the rise, and the world economy is facing increasing downward risks. The Asia Pacific has, on the whole, maintained sound momentum of growth and acquired a more important position and played a more prominent role in the world economy. However, we should not overlook the impact that the grave challenges in the global economy are having on our region, which we need to address with serious efforts.

Focusing on the fundamental issues concerning economic recovery and long-term development, this CEO summit will examine both challenges and opportunities in promoting growth in the Asia Pacific and the world. It thus provides an important opportunity for us to correctly gauge the situation, pursue the right goals and priorities for cooperation, and jointly promote sustained economic recovery and development in the Asia Pacific. With the questions you have in mind, I wish to address the need to upgrade infrastructure in the context of promoting stable growth and recovery.

First, we should speed up infrastructure development to strengthen the foundation of development. Infrastructure is essential for achieving economic and social development. To strengthen infrastructure development is key to promoting recovery and achieving sustained and stable growth. We need to create a fair, transparent and efficient regulatory, legal and market environment for strengthening infrastructure development and leverage the role of infrastructure in boosting domestic demand, creating jobs and improving people's livelihood. We need to upgrade infrastructure in agriculture, energy, water conservancy, information and other sectors and promote the building of transportation networks, namely, railways, highways, waterways, civil aviation facilities and pipelines. Governments should play an important role in infrastructure building and step up financial support for infrastructure development. We should improve and explore new mechanisms for infrastructure investment and financing and encourage participation in infrastructure development by various actors.

Second, we should improve the connectivity and efficiency of supply chains to ensure the smooth functioning of infrastructure.This is something we must do to deepen economic integration and enhance competitiveness of our region. We need to continue to implement the Supply Chain Connectivity Action Plan, overcome restraints of supply chain bottlenecks, remove obstacles impeding the flow of goods and services, and endeavor to meet the target of improving supply chain efficiency in the region by 10% in terms of time, cost and other indicators by 2015. We need to strengthen logistics network building, streamline customs procedures, and work for the development of "Single Window Systems" in all APEC economies. We should deepen cooperation under the APEC Business Travel Cards program and facilitate business travel. Small and medium-sized enterprises have an important role to play in supply chains and providing logistics services. China has proposed a multi-year capacity-building initiative (2012-2014) to support SMEs in terms of access to information, cross-border cooperation and capacity building. We hope that other APEC members, people from the business community in particular, will support and join this initiative.

Third, we should deepen reform of the investment structure to share opportunities in infrastructure development. The business community is a major force driving both economic development in the Asia-Pacific region and international trade. To advance global recovery and promote growth in the Asia Pacific, we need the active participation of the business community. Infrastructure development offers huge space and opportunities for business growth. Governments should seek the views and suggestions of the business community, support the private sector in engaging in infrastructure development, remove policy barriers and institutional obstacles, widen channels for accessing private capital and encourage market competition. We should fully leverage the role of the financial sector in infrastructure investment and development and explore new financing channels and cooperation models for infrastructure development.

Fourth, we should strengthen exchanges and cooperation to jointly promote Asia-Pacific connectivity. All APEC members agree on the need to speed up infrastructure development and build an interconnected region. The APEC economies have pursued extensive, pragmatic and productive cooperation through both bilateral channels and various organizations and mechanisms in the region, thus laying a solid foundation for deepening cooperation in inter-connectivity in the Asia Pacific. APEC should continue to leverage its strengths in promoting supply chain connectivity and trade facilitation, and it should strengthen exchanges and cooperation in connectivity with the Greater Mekong Subregion Economic Cooperation, the Greater Tumen Initiative, ASEAN, ASEAN+3, the Shanghai Cooperation Organization and other mechanisms. By drawing on our respective strengths, we can form synergy to make progress in building international transportation networks in multiple directions in the Asia Pacific. In addition, APEC members need to strengthen regulatory coherence and people-to-people exchanges and conduct wide-ranging and multi-level cooperation in promoting connectivity.

Ladies and Gentlemen,

Meeting various grave challenges both at home and abroad, China achieved a GDP growth of 9.2% in 2011. Good progress was made in adjusting the economic structure and the grain output increased for the eighth consecutive year. More urban jobs were created and people's lives continued to improve. This year, we have focused on ensuring stable growth and price stability, adjusting economic structure, improving people's lives, deepening reform and promoting harmony. This has ensured the stable performance of China's economy. In the first six months of this year, China's GDP grew by 7.8% year on year and retail sales increased by 14.4%. Foreign trade is in basic balance, and growth is driven by more balanced domestic and external demands. On the other hand, lack of balance, coordination and sustainability in China's economic development remains a major problem and economic growth is facing notable downward pressure. Some SMEs are having a hard time, and exporters are facing more difficulties. We have an arduous task of creating jobs for new entrants to the labor force.

China will continue to pursue a proactive fiscal policy and a prudent monetary policy. We will ensure continuity and stability of macroeconomic policies and make macroeconomic regulation more targeted, flexible and forward-looking. We will work to maintain balance among keeping steady and robust growth, adjusting economic structure and managing inflation expectations. We will boost domestic demand and maintain steady and robust growth as well as basic price stability. We will take the following steps to achieve this goal:

First, we will endeavor to promote home-driven growth. We will give priority to making strategic adjustments to China's economic structure so as to accelerate the shift of growth model. We will put in place long-term mechanisms to boost domestic demand and ensure that growth is driven by consumption, investment and export in a balanced way. We will strengthen agriculture as the foundation of the economy, raise core competitiveness of the manufacturing sector, cultivate and develop strategic emerging industries, and accelerate the development of the service sector so as to sustain the coordinated development of primary, secondary and tertiary industries. We will balance the development of urban and rural areas, promote urbanization in an active and steady way, work harder to build new socialist rural areas, and promote sound interactions among various regions and their balanced development. We will increase input in infrastructure development and public services, improve the basic public service system and deepen reform of the income distribution system.

Second, we will work to promote inclusive growth. We will ensure that growth will contribute to people's wellbeing. We will focus on addressing issues that are of greatest and most immediate concern to the people and carry out social programs with priority on improving people's lives. We will phase in a system for ensuring social equity featuring equal rights, equal opportunities and equal rules, a system that gives people equal access to development opportunities. We will develop human resources on a priority basis and spare no effort in increasing employment. We will work harder to improve the social security system and address issues concerning people's well-being such as education, old-age care, medical care and housing. We will promote equal access to basic public services and ensure that development is for the people, by the people and its benefits are shared by all.

Third, we will strive to promote innovation-driven development.Progress in science and technology and innovation are crucial in accelerating the shift of growth model. Competent personnel are the primary resources for development. We will continue to pursue the strategy of making China strong through science, education and human resources development. We will focus on strengthening the capacity for indigenous innovation, deepen reform of the management system for science and technology and endeavor to remove key obstacles hindering innovation. We will work to enable science and technology to play a supportive and leading role in accelerating the shift of growth model and adjusting economic structure. We will speed up the building of a national innovation system, strengthen mechanisms for human resources development, improve the environment for innovation, and enhance opening-up and cooperation in science and technology so as to build an innovation-driven country.

Fourth, we will work to achieve mutually-beneficial and win-win outcomes. China will continue to pursue the basic state policy of opening-up, carry out the opening-up strategy more actively and improve the regional opening-up pattern. We will encourage both foreign investment in China and Chinese investment overseas. We will open more areas and sectors, increase and deepen common interests with other parties and improve the institutions and mechanisms so that they are suited to the development of an open economy. We will continue to foster an open and transparent legal environment, an environment for fair market competition, and a stable and orderly business environment to create good conditions for investors. We will move faster to implement the FTA strategy, strengthen ties with key trading partners, and deepen pragmatic cooperation with other emerging markets and developing countries.

Ladies and Gentlemen,

The global economy has reached a critical juncture, and we face the arduous task of overcoming major difficulties standing in the way in order to achieve full recovery and sustained growth. To maintain peace and stability as well as the sound momentum of economic growth in the Asia Pacific is in the interest of all countries in the region. It is our shared responsibility. China's development will create opportunities for the development of the Asia Pacific. In the 12th Five-Year Plan period, huge consumption demand and market space will be created in China. Retail sales will register an average annual growth of around 15%, making the Chinese market one of the largest in the world. China's total imports during this period are expected to exceed US$10 trillion. Chinese direct investment overseas is also estimated to surpass US$500 billion. All this will create many business opportunities and jobs for both the Asia Pacific and the world. This will contribute to global growth and provide valuable opportunities for APEC members and particularly the business community.

China welcomes the Asia-Pacific business community to get involved in China's reform, opening-up and modernization and share the opportunities and benefits of China's development. China will work with all of you to sustain growth and improve the lives of the Asia-Pacific people.

Thank you.