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China's New Development and China-US relations (Speech by Consul General Hong Lei at University of Denver)

Distinguished guests and friends,

It is great pleasure for me to be invited by the Josef Korbel School of International Studies to visit the beautiful Denver University on this fine Autumn day.

First of all, I would like to extend my sincere thanks to the hospitality, the warm reception and considerate arrangement made by the School of International Studies.I would also like to extend my gratitude to all of you for facilitating the China-US people-to-people exchanges and enhancing the friendship between our people.

I became the 10th Consul General of the Chinese Consulate General in Chicago on July 2016. The consular District of our Consulate covers 9 states in the Midwest, namely Illinois, Michigan, Minnesota, Wisconsin, Missouri, Iowa, Indiana, Kansas and Colorado. In the following, I would like to take this opportunity to share my thoughts about the new development of China and China-US relations in the new era.

In the past 30-odd years since the reform and opening up, the Chinese people have worked together and forged a development path that accords with China’s conditions and conforms to the historical trend. China has achieved sound and sustained economic development, enhanced our comprehensive national strength, and has been well on track to achieve higher quality, higher efficiency and more sustainability. Especially since 2012 when the Communist Party of China convened the 18th National Congress, China has taken solid steps in completely building a moderately prosperous society, made breakthroughs in comprehensively deepening reform, registered positive progress in implementing the rule of law, and achieved in-depth progress in comprehensively strengthening the ruling party discipline. The Chinese people have made remarkable achievement in politics, economy, society and culture which has drawn worldwide attention. At a time when most countries are looking for ways to achieve economic development and reflecting on state governing philosophies, China’s development achievement and governing experience is gaining more global attention.

First, China’s economy keeps developing at a moderate and high speed to propel economic restructuring and upgrading. China experienced high speed economic development from 1979 to 2011 after the reform and opening up. The average annual economic growth rate of 9.87% in the 32 years time span is unparalleled in comparison to that of other countries and to China itself prior to reform and opening up. Nevertheless, as the international economic environment changes and the domestic economic base grows larger, it becomes impossible for China to maintain the high speed economic growth. Under these circumstances, taking effective measures to realize moderate and high speed growth becomes an inevitable choice for China. From 2013 to 2016, China’s annual GDP grew at 7.2% on average, still higher than the world average of 2.5% and 4% of developing economies in the same time. In 2017, China’s economy has registered a stable performance with good momentum for growth, with 6.9% growth rate in the first half of year. IMF, Asian Development Bank, JP Morgan among other international organizations and entities raised the economic growth expectation of China, believing that China’s economy prospect is well founded and predicting China’s 2017 GDP growth beyond 6.7%.

At the mean time, to keep moderate and high speed economic growth, it is imperative to lift economic development to the medium-high end. In the past 5 years, China has been working with full efforts in optimizing the industrial structure, improving the supply and demand structure and propelling urbanization, which brings notable restructuring and upgrading effects. In 2016, the added value of service industry grew and accounted for 51.6% of China’s GDP, the contribution rate to economic growth from consumer expenditure reached 64.6%, urbanization rate of permanent population came close to 60%, and the growth of equipment manufacturing and high tech manufacturing was way faster than traditional industry.

Second, implementing innovation-driven development strategy in depth and accelerating conversion of old momentum into the new. In recent years, the world economy has been experiencing difficulty in recovery and China’s domestic economy has entered a stage of New Normal, which formed stronger impetus to change the extensive development pattern. Against such background, China has adhered to the path of self innovation and advocated mass entrepreneurship and mass innovation, which helped build new industry and brought new momentum. Many major scientific and technological achievements with epoch-making significance were made, such as breakthroughs in manned space flight, quantum communication, manned deep sea submersing, super computer, etc. In 2016, China’s volume of patent for innovation broke 1.1 million, which made China the third country that owns more than one million patent for innovation after the United States and Japan. The innovation index of China ranks the 25th worldwide and No.1 in moderate income countries. At the same time, as the“Internet plus” and “Broad Band China” strategy were further implemented, in 2016, the internet users of China reached 730 million, on-line retailing turnover reached 750 billion US dollars and the express delivery exceeded 30 billion times accounting for over 40% of the world total.

Third, adhering to the concept of sustainable development and building eco-civilization. President Xi Jinping reiterated that short term economic development can not be achieved at the expense of ecology and environment, and that clear waters and green mountains are invaluable assets for mankind. While developing our economy, China has been striving to change the development pattern featuring high pollution, emission and consumption by accelerating building of resource conserving and environment-friendly production models and consuming patterns. Thanks to the concerted efforts of government, enterprise and the public, remarkable achievements have been made in energy saving and emission cutting, and the energy consumption structure has been constantly changing and the air pollution well controlled. From 2012 to 2016, the proportion of national coal consumption in energy consumption decreased by 6.5% and energy consumption per unit of GDP was lowered by 17.9%, saving 860 million standard coal. By the end of 2015, the forest area of the nation was 208 million hectares, with the forest coverage of 21.66%, which makes China the number one country in terms of forest area growth in the last 25 years.

Fourth, speeding up the opening up, facilitating and achieving common development. As China’s economy enters New Normal and keeps a moderate and high speed growth, many friends have concerns that China may slow down our opening up and adopt trade protection policies. Our answer is that China will unswervingly adhere to opening up which is China’s strategic choice. China’s development has benefited from globalization, and China actively participates in, contributes and propels globalization. China’s stable economic development has not only brought prosperity and progress to ourselves, but also brought more opportunities to the world. In 2016, China’s total volume of import and export reached 3.7 trillion US dollars, outward foreign direct investment registered 175 billion US dollars, two times of that in 2012. This has not only helped China maintain as the largest exporting country and the second largest importing country, but also made China the second largest country of outward foreign investment. From 2013 to 2016, China’s average contribution to the world economy was over 30% , surpassing the contribution of America, Euro Zone and Japan combined. China played an important role in tackling impact from international financial crisis and promoting world economic recovery.

At the same time, China actively seeks for solutions to solve the problems the world and regional economies are facing. In 2013, President Xi Jinping put forward the Belt and Road Initiative with the principle of achieving shared benefits through discussion and collaboration, synergize each other’s development strategies, achieve complementary advantages and common development by improving infrastructure building and connectivity and industrial capacity cooperation. In the past 4 years, with the concerted efforts of all participating parties, the Belt and Road Initiative has gradually evolved from an initiative to action, from theory to practice, and becomes the largest international cooperation platform and public product welcomed by all in recent years. The Belt and Road Initiative has already been actively responded to and supported by over 100 countries and international organizations. More than 40 countries and international organizations signed cooperation agreements with China. China’s investment to the countries along the Belt and Road reached 50 billion US dollars, bringing in a series of big projects, which have facilitated economic development of those countries and created a lot of jobs. The international community highly acclaimed the Belt and Road Initiative and said it provided Chinese Solution to building an open world economy, and to improving and enhancing global governance.

China will unswervingly implement the opening up strategy. China’s door will be always open to the world and will be more and more open as we further develop. In the coming five years, China is expected to import $8 trillion of goods and make $750 billion of outward investment. Chinese tourists will make 700 million overseas visits. These will provide the world with a wider market, abundant capital, ampler products and more precious cooperation opportunities. Undoubtedly, the world will further benefit from China’s development.

Fifth, we are consistently improving the environment for implementing the rule of law, providing the institutional guarantee for comprehensively building a moderately prosperous society. The rule of law is an essential instrument of state governance. It is an important foundation of a country's governance systems and capabilities. A nation can only thrive if its legal system stands strong. Since the 18th Congress of the CPC, China has been promoting governance according to law, ruling according to law, and conducting administration according to law, making synchronized efforts to build a nation, a government, and a society based on law and expanding the scope of socialist rule of law with Chinese characteristics. Currently, China has not only constructed a legal system with the Constitution at its top, we have also provided a legal framework for the society and individuals to rely on. The priority of the Chinese legal system is shifting from legislation to implementation of the Constitution and other laws. Increasingly, the governance of the ruling party and the state is being integrated into the legal framework. China's endeavor to promote the rule of law has achieved historical progress and been widely acclaimed by the international community.

Sixth, we have rigorously strengthened Chinese Communist Party’s discipline to move forward governance of the ruling party and the nation. To realize the Chinese Dream of Great Rejuvenation, the key lies in the ruling party. The party needs to strictly exercise self-discipline and self-governance. On the 18th National Congress, the Communist Party of China made a solemn oath that “a good example is the best sermon” and resolved to be strict with its members. In the past five years, the party discipline has been enhanced all around, and corruption has been effectively stemmed. The overwhelming trend of anti-corruption has been formed, a system that ensures officials dare not, can not and will not be corrupt has been gradually formed. The intra-party political life is developing with new aspects, winning acclaims from the whole party and society.

Three weeks later, the Communist Party of China will convene its 19th National Congress, which will point out direction and lay out plans for China’s development in the next 5 yeas and beyond, and lead China’s efforts to completely build a moderately prosperous society and make new progress in building socialism with Chinese characteristics. From a new historical starting point, China will surely make more and bigger contribution to the great cause of world peace and development.

Dear friends,

China-US relations are the world’s most important bilateral relationship. Maintaining and developing the relationship is not only in line with the interests of the 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 peoples of both countries, China-US relations have achieved historic development.

In 1979, the official exchanges between the two countries were quite few. Today, the high-level exchanges between China and the US are close and the dialogue mechanisms are extensive. Since the new American government took office, President Xi Jinping and President Trump had two meetings in Mar-a-Lago in Florida and at the G20 Hamburg Summit respectively, which points out direction for the development of China-US relations and sets a constructive tone. The two sides have set up four high-level dialogue mechanisms on diplomacy and security, economy, law enforcement and cyber security, as well as social and people-to-people exchanges. The dialogue mechanisms will help the two countries communicate and coordinate more timely on important issues of different fields, and make good top level design.

In 1979, less than 10,000 people in China and the US visited each other’s country. In 2016, nearly 5 million people from the two countries traveled across the Pacific Ocean, among which 2.6 million were Chinese visitors to the United States. In 1979, students from Chinese mainland were hardly seen in any American university. Nowadays, 330 thousand Chinese students are studying in American universities, accounting for one third of America's foreign students and becoming the largest international students group in the US.

In 1979, the bilateral trade volume between China and the US was only $ 2.45 billion, and direct investment between the two countries was zero. In 2016, China-US bilateral import and export of goods amounted to $ 519.6 billion, which was 207 times of the volume in 1979 when we just established diplomatic ties. The volume of bilateral trade service has surpassed 110 billion US dollars. China is the third largest export market and the largest source of import of the United States, and maintains 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 largest source of import of China. According to the latest report of US-China Business Council, from 2006 to 2015, the American export of goods to China has grown by 114%. In comparison, the growth of American goods export to other countries during the same period of time was only 47%. In the past 10 years, American export of service to China has grown by 348%, in comparison, the growth of American service export to other countries was only 106%. The cumulative bilateral two-way investments have amounted to 200 billion US dollars. 26% of US Boeing airplanes, 56% of its soy beans, 16% of its cars, and 15% of its integrate circuits were exported to China. In the past year since I assumed office, I have visited governors of the nine states in our consular district and officials in charge of economic affairs, trade and investment, and strongly felt their strong willingness and dedication towards developing relations with China. Governor Bruce Rauner of Illinois, Governor Rick Snyder of Michigan, Governor Kim Reynolds of Iowa and Governor Eric Greitens of Missouri visited China this summer, giving strong push for the cooperation and exchanges between China and the Midwest states. Chairman Emeritus of Chicago Mercantile Exchange Group Leo Melamed told me that China will be America’s economic partner for the next 50 or even 100 years. In the 2017 annual gala of the China General Chamber of Commerce Chicago held in last June, I was impressed by the zeal for promoting investment and trade cooperation from the Chinese and American business communities. There is huge potential for cooperation in economy and trade between China and America. China is implementing the Belt and Road initiative which also opens doors to American companies. Currently, many reputable American companies including Caterpillar in our consular district have expressed their wish for cooperation.

President Trump is invited for a state visit to China in the latter half of the year. We would like to work with America, follow the consensus reached by the two leaders, adhere to the principles of non-confrontation, non-conflict, mutual respect and win-win cooperation, strengthen strategic communication, expand pragmatic cooperation in different fields, solve differences and sensitive issues appropriately, promote cooperation to realize more consensus and outcome, so as to open up brighter and wider prospects for the bilateral relationship and bring more benefits to people in our two countries and beyond.

Dear friends,

Sub-national cooperation is the foundation for friendly China-US relationship and is an endless power to drive forward the China-US relations. The healthy and sound development of bilateral relations boils down to support from people and sub-national level, and the development will eventually serve the people and sub-national level.

The cooperation between the nine Midwest States within our consular district and China has expanded at a grass-root level. The economic and trade cooperation has deepened and people to people exchanges have become increasingly close and frequent. 15 Sister State-Province relations and 40 Sister Cities relations have been set up between the two sides. Last year, trade volume between China and the 9 states within the Consular District surpassed 90 billion US dollars. In the past 16 years, China’s cumulative investment in the nine states has amounted to 20 billion US dollars, which has created 45,000 jobs. Wanxiang, Nexteer and Yanfeng among others all employ over 5,000 local workers. Many large projects have broken ground, including the CRRC rolling car assembly plant and the Wanda Vista Tower, the third tallest building in Chicago. There are 80,000 Chinese students and 19 Confucius institutes in the nine states. During this year’s Spring Festival, we invited the China Ethnic Song and Dance Ensemble, the Guangdong Song and Dance Troupe, Jiangxi Song and Dance Troupe to perform in the nine States and brought an artistic feast to the local people. After watching the performances, many American friends told me that they were very thrilled to see such wonderful performances which had left them with a beautiful memory.

In recent years, cooperation between China and Colorado has grown deeper and borne fruitful results with booming pragmatic cooperation in many sectors. Colorado is an important state in the Midwest and is one of the high-tech bases in America, boasting highly developed education and beautiful natural environment. I am deeply impressed every time I visit Colorado. China is Colorado’s second largest trade partner, second largest source for import and third largest market for export. Statistics show that since 2000, Chinese companies have invested 560 million US dollar in Colorado and have created 1,600 local jobs. Governor Hickenlooper told me that China-US relations are very important, the two sides should further tighten our ties in economy, trade and investment which will be conducive to the stable development of the bilateral relationship. Colorado values cooperation with China and takes China as an important opportunity for Colorado’s development. Colorado has its own advantages in agriculture, environmental protection, technology, renewable energy, etc. and is willing to cooperate with China. People-to-people exchanges are another spotlight in bilateral cooperation. As of now, over 3,500 Chinese students are studying in universities and colleges in Colorado, accounting for 30% of Colorado’s total foreign students. We have also set up two Confucius Institutes in Colorado to meet the Chinese learning demand from the American students.

Dear friends, the development of China-US relationship is very encouraging. It bears on our future. Let us join hands and actively support and participate in China-US dialogues and cooperation, and bring the China-US relationship to a even brighter tomorrow.

Thank you all.

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