|Speech by Consul General Hong Lei at the Michigan-China Forum|
Ladies and Gentlemen,
I'm very glad to visit the famous University of Michigan at the invitation of the Chinese Students and Scholars Association. First of all, I would like to express my warmest congratulations to you on the 200th anniversary of the founding of the University of Michigan, whose high-quality education and academic performances has not only cultivated talented people for the world but also attracted a large number of excellent Chinese students. It is worth mentioning in particular that 45 years ago, greatly supported by Professor Alexander Eckstein and other American friends at the University of Michigan, the Chinese National table-tennis Team paid a return visit to the US, played exhibition matches in Detroit and had a tour in this university, which made the University of Michigan a participant and witness of the beginning of China-US friendship. I would like to thank University of Michigan for its significant contribution to China-US friendship and cooperation.
I became the 10th Consul General of China in Chicago last July. Our consulate covers 9 states in the Midwest, namely Missouri, Minnesota, Wisconsin, Michigan, Iowa, Illinois, Indiana, Kansas and Colorado. As asked by the host and I myself has hoped, I would like take this opportunity to share with you China's development, China-U.S. relations and China-U.S. Midwest cooperation.
It is well said that China's development today has attracted the attention of the world. But a professor from University of Illinois Urbana-Champaign told me, looking back into history, Western scholars had been studying China as a typical failure until 30 years ago. Their research mainly focused on how China fell behind in the modern history and eventually became a semi-colonial country. But in recent years, Western scholars have turned to the teaching on how China rose up through self-reform and self-perfection. In today's fast-changing and turbulent world, study on China's rapid growth has its practical significance and the year 1978 would be a good starting point. In that year, the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China made the great decision of reform and opening-up. Over the last three decades, China enjoyed fast economic growth, greatly enhanced comprehensive national strength and took a historic leap of the people's livelihood from poverty to a generally prosperous society. China has achieved unprecedented economic and social development.
On economic indicators, China's GDP registered a 6.7% growth in 2016, outpacing most other economies. The total retail sales of social consumer goods went beyond US$5 trillion, making China the second largest consumer market in the world. The registered urban unemployment rate stood at 4.02 percent at year-end, the lowest level in years. The CPI rose by 2%. Energy consumption per unit of GDP fell by 5%. From 1978 to 2015, China's per capita GDP grew from more than US$200 to above US$8,000. By the end of 2015, the total number of mobile phone users nationwide reached 1.3 billion, with a penetration rate of 95.5 per 100 people. The number of Internet users was 688 million, and the household penetration rate of fixed broadband reached 50.3 percent. Civilian car ownership was nearly 100 million. The total mileages of expressways open to traffic in China reached 123,500 km, the operating mileages of high-speed railways reached 19,000 km and the civil aviation passenger throughput grew to 915 million. Chinese residents made over 120 million outbound trips.
On people's livelihood, in 1978, per capita disposable income of urban households was only RMB343.4, and per capita net income of rural households was only RMB133.6. In 2015, per capita disposable income of all residents reached RMB21,966. Since the end of 1978, China has completed "the most rapid large-scale poverty reduction course in human history over the last 25 years." According to the existing rural poverty standards, China has reduced the number of those living in poverty by more than 700 million, which is more than the total population of the United States, Russia, Japan and Germany combined, and cut the rate of poverty to 5.7 percent, becoming the first country to achieve the United Nations Millennium Development Goals, and laying a solid foundation for the building of a moderately prosperous society in all respects. In March 2016, the "Outline of the 13th Five-Year Program for the National Economic and Social Development of the People's Republic of China" was published, in which the Chinese government made strategic plans for the full implementation of the overall goal of poverty eradication. In order to realize the ambitious goal of relieving the rural poor population of poverty by 2020, China is carrying out a basic strategy of targeted poverty alleviation and targeted poverty eradication.
On contributions to the international community, since it launched reform and opening-up, China has made over $1.2 trillion direct outbound investment. Last year, sales of overseas Chinese enterprises reached $1.5 trillion. They paid $40 billion taxes to the local governments and hired 1.5 million foreign employees. China has been the largest country in terms of outbound travel consumption for four years in a row. Last year, Chinese tourists spent about $1000 per person on average in their outbound visits and during the Chinese Lunar New Year last month, Chinese tourists spent a total amount of $15 billion overseas. In the years following the outbreak of the international financial crisis, China contributed over 30 percent to global growth every year on average, making huge contribution to global economic development. Between 1950 and 2016, despite its modest level of development and living standard, China provided more than 400 billion yuan foreign assistance, undertook over 5,000 foreign assistance projects, including nearly 3,000 complete projects, and held over 11,000 training workshops in China for over 260,000 personnel from other developing countries. To date, China has sent 33,000 military, police and civilian personnel to join UN peacekeeping missions. Currently there are 2,600-plus Chinese peacekeeping personnel involved in 10 UN peacekeeping operations, making China the most active permanent member of the UN Security Council in terms of supplying peacekeeping personnel. China has offered solutions to regional flashpoints: including involving itself in the Iran nuclear talks; mediating national reconciliation in South Sudan; proposing a four-step framework for political settlement of the Syrian issue; facilitating the peace talks between the Afghan government and the Taliban; promoting consensus on resuming the six-party talks on the nuclear issue on the Korean Peninsula. China has put forward new initiatives and mechanisms such as the "Belt and Road" Initiative and the Asian Infrastructure Investment Bank to complement and improve the current international mechanisms with the aim of win-win cooperation and common development. Since then, over 100 countries and international organizations have given warm responses and support to the "Belt and Road" Initiative and more than 40 countries and international organizations have signed cooperation agreements with China. Chinese companies have made over $50 billion investment and launched a number of major projects in the countries along the routes, spurring the economic development of these countries and creating many local jobs. The Asian Infrastructure Investment Bank has also begun playing a positive role in regional infrastructure development.
We are fully aware that as the largest middle-income country in the world, China has to go through the "middle income trap" in its development. Based on historical experience, joining the high-income club won't be easy and it is important to speed up industrial structure adjustments at a proper time. Countries relying on foreign investment, import and debts and lacking independence in their economic development usually fall into the trap. China has been learning from the experience and lessons of others and promoting economic transformation and upgrade with innovation and new growth point, which serves as the solid foundation for China to avoid the "middle income trap".
The slowdown of China's economic growth in recent years has drawn attention. But as I just mentioned, China's economy achieved a 6.7% growth even as the world economy remains sluggish. Despite the lower growth rate, to achieve such a result was not an easy task. It is still one of the highest in the world. China's economy is far bigger in size than in the past, and it now generates more output than it did with double-digit growth in the past. Slowing down our economic growth is consistent with the laws of economics and can help us focus more on enhancing the quality and performance of the economy. Faced with external and internal risks, China has a good reserve of policy options and instruments at our disposal and thus is fully capable of preventing risks. Practices in recent years have proved that China's economy will continue to grow rather than suffering from a hard-landing.
Currently, with the vision of innovative, coordinated, green, open and shared development, China aims to achieve medium-high rate of growth and upgrade the economy to higher end of the value chain.
In pursuing the innovation-driven development strategy, China has developed and launched a plan for major science and technology programs by 2030, supported Beijing and Shanghai in building themselves into global R&D centers, and established another six national innovation demonstration zones. The number of in-force Chinese patents issued in China passed the million mark, and the value of technology transactions exceeded one trillion yuan. People are busy launching businesses or making innovations, with a 24.5% year-on-year increase in the number of new businesses registered, which means an average of 15,000 new businesses daily.
Coordination is needed for more balanced development between regions and between economic and social development. China is still the largest developing country in the world with a population of 1.3 billion, relatively low living standards and a development gap between rural and urban areas. But this also means potential and space for further development. With increasing national wealth, world-class infrastructure, low labor cost and a complete set of industrial system and supply chain, China enjoys a solid foundation for a new type of industrialization, informationization, urbanization and agricultural modernization.
China stays committed to its fundamental policy of conserving resources and protecting the environment. President Xi Jinping has said many times that green mountains and clear water are as good as mountains of gold and silver. China will unwaveringly pursue green, low-carbon and circular development and address the issues of climate change and overcapacity. In the next five years, China will cut down production capacity of crude steel by another 100 million to 150 million tons, close more coal mines with production capacity of around 500 million tons and cut production capacity of around 500 million tons through coal mine restructuring. China's water and energy consumption as well as CO2 emission per unit of GDP will be cut down by 23%, 15% and 18% respectively so that the people will enjoy the ecological benefits created by economic development.
China will promote equity and sharing of development outcomes to deliver more benefits to the people. China continues to invest in areas related to living standards, improve public services such as education, health care and social security and increase the middle-income population. With more attention paid to equity and fairness, China will make the pie bigger and ensure that people get a fair share of it. We will resolve the most pressing problems affecting the immediate interests of the people to their satisfaction and let economic development better contribute to the people's welfare.
China pursues a mutually-beneficial and win-win opening-up policy. This is a strategic choice of ours. China's opening-up will not stall, still less will it reverse its course. China is expanding access for foreign investment, facilitating such investment to promote fair and open competition and creating a sound business environment. We will also accelerate negotiation on FTAs and investment treaties with relevant countries and the development of high-standard pilot free trade zones in China. The new practices of pilot free trade zones in Shanghai and elsewhere have helped in establishing another seven pilot zones. In the coming five years, China is expected to import $8 trillion of goods, make $750 billion of outbound investment. Chinese tourists will make 700 million overseas visits. All this will create more business opportunities for other countries including the US.
Ladies and Gentlemen,
As two major countries with global influence, the significance of China-US relationship is self-evident. Maintaining and developing our relationship is not only in line with the interests of our two peoples but also the common expectation of the international community. Since China and the United States established diplomatic ties 38 years ago, thanks to joint efforts of successive leaders and the people of both countries, China-US relations have achieved historic growth.
In 1979, the official exchanges between China and the United States were numbered. Today, the high-level exchanges between China and the United States are close and the dialogue mechanism is smooth. Since President Trump assumed office two months ago, President Xi Jinping have had two phone calls and three exchanges of letters with him. China and the United States have established over 100 inter-governmental dialogue mechanisms, including the strategic dialogue and people-to-people exchange mechanism, the China-US Joint Commission on Commerce and Trade (JCCT) and so on, covering political, economic, security, cultural, science and technology and other fields. So far, there are 47 pairs of friendly provinces-states and 215 pairs of sister cities between China and the US.
In 1979, bilateral trade volume between China and the US was only $ 2.45 billion, and direct investment between us was zero. In 2016, China-US bilateral import and export of goods amounted to $ 578.59 billion. China is the third largest export market and the largest source of import of the United State, and maintains as the largest trading partner of the US. On the other hand, the US has become the largest trading partner, the largest export market and the fourth source of import of China. In 2016, bilateral two-way investment amounted to $170 billion, and Chinese companies invested $ 45.6 billion directly in the US, almost doubling that of 2015. 26% of America's Boeing airplanes, 56% of its soybeans, 16% of its automobiles and 15% of its integrated circuits are sold to China.
In 1979, less than 10,000 people in China and the US visited the other country. In 2016, 5 million people from the two countries came across the Pacific Ocean, among which 2.6 million Chinese people visited the United States. In 1979, students from Chinese mainland was hardly seen in any American university. Nowadays, 300,000 Chinese students are studying in universities in the United States, accounting for one third of America's foreign students and the largest group of international students.
Through the extensive communication and joint efforts of both sides, the China-US relationship is transitioning steadily and developing in a positive direction. Last month, President Xi Jinping and President Trump had a very important telephone conversation where they reaffirmed the importance of following the one-China principle and pledged to push China-US relations to greater height from a new starting point. The phone call has set the direction and paved the way for bilateral relations. The two sides are having fruitful communications on realizing exchanges between our Presidents and at other levels and expanding all areas of cooperation. As long as we follow through on the consensus reached between our Presidents, follow the principle of no conflict, no confrontation, mutual respect and win-win cooperation, then there is no reason why China and the United States cannot become good partners. This has been fully proved in the in-depth development of the friendly relationship between China and the State of Michigan.
The recent years have witnessed sound development and concrete outcomes of China's ties with Michigan. First, our mutual visits have become more frequent. Governor Snyder attaches great importance to Michigan's relations with China and has visited China six years in a row. The stops In each and every visit included Beijing, Guangzhou, Shenzhen and other major cities in China and the Governor always promoted Michigan's industrial advantage and investment environment in a comprehensive way. His visits greatly deepened Michigan's cooperation with China, in particular with Guangdong Province, the powerhouse of China's economy. Governor Snyder once told me that cooperation with China should become common sense for people in Michigan. During his visit to China in 2015, Ministry of Commerce of China, joined with four Chinese provinces, namely Zhejiang, Hubei, Guangdong, Sichuan, and the City of Chongqing, signed a MOU with Michigan for a joint working group on trade and investment. In the same year, then CPC Deputy Secretary of Guangdong Province Mr. Ma Xingrui visited Michigan. Last year, Politburo Member and CPC Secretary of Guangdong Province Mr. Hu Chunhua and Mayor of Shenzhen Mr. Xu Qin visited Michigan. The two sides signed an agreement on establishing sister province/state relations between Guangdong and Michigan and a MOU for Shenzhen-Michigan Trade, Investment and Innovation Cooperation Center. I'm glad to tell you that this center will have its grand opening in about two weeks.
Second, we have closer trade and investment cooperation. China is the third largest trading partner and export market of Michigan. Our total trade volume exceeded US$12 billion. China is also a huge market for General Motors, Ford, and Chrysler headquartered in Michigan, whose car sales account for 13% of the Chinese market. The annual sales of GM in China has gone beyond 3.6 million cars, that's about 10,000 cars per day. As China's economy becomes stronger and more open, more Chinese enterprises have come to and developed in Michigan. They have invested US$4 billion and created nearly 9,000 jobs in this state, making important contributions to local economy and employment. For example, after the acquisition of Michigan's Nexteer Automotive by China's Automobile Industry Holding Co. Ltd. (AUIC), the number of employees increased from 3000 in 2010 to 5000 now.
Third, cultural and people-to-people exchanges have become the new highlight. Over 11,000 Chinese students are studying in Michigan, among which over 2,700 students at University of Michigan here. All of you are important ambassadors for youth exchanges between China and the US. We have established 4 Confucius Institutes and 4 Confucius Classes in Michigan to meet the increasing need of American students learning Chinese. During the Chinese Spring Festival this year, entrusted by Party Secretary Hu Chunhua and Governor Ma Xingrui of Guangdong Province, the Guangdong Friendship Working Group and Provincial Art Troupe visited Detroit and brought the best wishes of the people of Guangdong to the people of Michigan. The art troupe presented a Chinese Culture Show at the Ford Community & Performing Arts Center, featuring folk singing, dancing, acrobatics, magic and martial arts, and was warmly welcomed by the local people. The audiences were truly amazed by their performances. Some people told me that they didn't blink so as not to miss a single second of the performance. This July, the 100-year-old Detroit Symphony Orchestra will visit and perform in Shanghai, Chongqing, Wuhan and Xi'an, bringing artistic enjoyment to the Chinese people and writing a new chapter of China-Michigan cultural exchanges.
Prosperous sub-national cooperation reflects the fact that China-US relationship features a high level of interdependence and mutually-beneficial and win-win cooperation. China and the US account for one third of the world's economy, one quarter of the world's population, and one fifth of the world's total trade volume. The healthy and stable development of bilateral relations between China and the US is of great significance in promoting world economic growth, confronting global problems, regional conflicts and hot spot issues. Under the current circumstances, how do we better maintain and develop our relations? I would like to offer some thoughts in this regard.
First, we need to rise above the difference of our political and social systems. China and the United States have chosen different systems and development paths. The Chinese people have great confidence in our own political and social systems and development path; we also welcome efforts by the American people to build a better America. Only the wearer knows if the shoes fit. When it comes to a nation's development path, only its own people can have a say. In the age of progress and plurality, there is a compelling reason for China and the United States to respect each other, live together peacefully and realize common development. As two major countries, it is only natural that China and the US don't see eye to eye from time to time. We should view each others' strategic intentions in a right way, respect each others' core interests and major concerns and handle and manage disputes in a constructive way so as to move forward China-US relations on a right track.
Second, we need to get rid of the zero-sum mentality. China is a peace-loving nation. China has no intention to challenge the United States, and China's development is not to overpower others. Despite of the fact that China's socialist modernization has made remarkable achievements, the fact is that China is still a developing country with large population. China's economy ranks second in the world, but its per capita GDP only ranks 70th with merely 8,000 US dollars because of the 1.3 billion population. China has more than 40 million people living in poverty, more than 70 million living on government allowances, and more than 80 million people with disabilities. Every year we have to create jobs for more than 10 million people newly added to the labor force. There is still a long way to go for China's development. China's greatest desire is to focus on the development of its own, and improve and ensure people's livelihood. To achieve this goal, China needs to stay in harmony with the rest of the world including the United States and achieve win-win results through cooperation. We should discard the Cold War zero-sum game mentality, as it goes against the trend of China-US relations in the 21st century and is proven to be wrong.
Third, we need to tap into the great potential of China-US cooperation. China and the United States have growing common interests. The areas which we need to work together on far outweigh what divides us. In many ways, our interests are increasingly intertwined. We should pull our efforts to enlarge our shared interests. Nowadays, we must continue to have innovate thinking, tap potentials for cooperation, and further strengthen mutually beneficial cooperation in the fields of trade, investment, science and technology, energy and infrastructure.
In the 1970s, table-tennis diplomacy opened the door of friendly exchanges between our two peoples and initiated the normalization of China-US relations. Looking back at our achievements, we have good reasons to be proud and optimistic. Of course, our journey ahead may still be long and arduous. Standing at a new starting point, we are confident that China and the U.S. will make new progress in the relationship and bring more benefits to the peoples of our two countries and beyond.