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China's New Development and China-US Relations
Acting Consul General Liu Jun's speech at Bradley University
2018/10/27

(October 24th, 2018 at Bradley University)

Teachers, students, ladies and gentlemen:

Good evening, everybody!

My colleagues and I are thrilled to be here at Bradley University. I often visit here because of work, and every time I walk onto the campus, I can’t help but feel young again. It’s as if the world of knowledge is back at my fingertips. I remember in the days of your parents, the knowledge attained from four years of college was considered enough to get by. As the second decade of the 21st century draws near its conclusion, the world is confronted with the reality that knowledge is updating at incredible speeds. Thus simply graduating from college is inadequate in meeting the demands of future professional development. We must develop the habit of lifelong learning.

Today, I would like to share with everyone my thoughts on China’s development and China-US relations. To begin, I will introduce China’s development.

As everyone knows, this year marks the 40th anniversary of China’s Reform and Opening Up. Over the past 40 years, Reform and Opening Up has reinvigorated China's youth and vitality, and because of this, China has begun to travel the path of great rejuvenation. The trials and tribulations of the past 40 years have provided our nation with a range of new experiences and insights. I present them as follows:

First, China has found a path suitable for its own development. Since the nation’s founding in 1949, and especially since Reform and Opening Up, we have grounded ourselves in the conditions of the nation; bravely reformed and innovated; continued to break the shackles of former systems; established a socialist market economic system; steadily blended into the world economy; greatly released the vitality of social development; and successfully embarked on the road of Socialism with Chinese Characteristics. Confronted with the challenges and struggles of the 21st century, the Chinese government continues to possess the conscience of responsibility, refuses to evade problems, never blames its own predicaments on other countries, and adheres to its established goals in moving forward. With a population of 1.3 billion people and a history that reaches back five thousand years, China’s development is the great transformation of an ancient civilization into a modern nation. It is the process of magnificent rejuvenation.

Second, China’s economy and society have successfully undergone large-scale transformations. From 1978 to 2017, China's GDP grew by 33.5 times when adjusted for inflation. The nation has seen an average annual growth rate of 9.5%, doubling every eight years, much higher than the average annual growth rate of 2.9% in the world economy. China’s economy ranks as one of the best among the world’s major economies. In the past 40 years, China’s foreign trade has grown at an average annual rate of 14.5% in dollar terms. From 1979 to 2017, cumulative foreign direct investment in China reached nearly 2 trillion US dollars; among developing countries, China leads in attracting the most foreign direct investment. For 40 years, we have made significant contributions to the world's poverty alleviation efforts, enabling more than 700 million people to successfully escape poverty, accounting for more than 70% of total global poverty reduction.

Although trade conflicts have occurred this year, according to the latest statistics, China's GDP growth rate in the first half of the year was 6.8%. From January to August, the total import and export volume increased by 9.1%, and newly added foreign-invested enterprises increased by 102.7% compared to the same period last year. Despite the increase in external uncertainty and instability, the overall stability of China's economy and the smooth transition of its structural transformation have not changed.

Third, China has responded outstandingly to the challenges of globalization. The development of the globalized world in the 21st century is the inevitable result of scientific and technological progress; it is changing the way we work and live, and is also bringing many challenges to all countries and individuals. However, when rowing a boat upstream, if you don’t push forward, you will get pulled back. Globalization has caused competition to intensify, the wealth gap to increase, and populism to gain ground. Confronted with this set of challenges, all countries must learn to better shoulder responsibility—not only to solve their own problems, but also to work communally to attack global problems. Self-isolation and artificially cutting off the flow of funds, technology, products, and personnel are practices that go against the tide of history and are increasingly difficult to accomplish. China will actively create a relaxed and orderly investment environment, allow for more foreign investment access, build a high-standard free trade pilot zone, promote fair competition, and make the market more transparent. China’s door will forever remain open to the world. In 2013, China proposed the “Belt and Road Initiative”. Over the past five years, through the platform of cooperative construction, and the mutual enjoyment of its results, the “Belt and Road Initiative” has sought to share China’s wisdom and solutions to solve the current global and regional economic issues.

After having joined the World Trade Organization, China’s opening up to the world has accelerated. At present, China's total percentage of tariffs is 7.5%. India’s is 13.8%, Brazil’s is 13.4%, and developing countries average a percentage of 40%. Chinese tariffs on farm products is 15.2%, while the average in developing countries is 56%, and that in developed countries is 39%. China has opened 100 service trade departments to the world, which is not far from the average of 108 that developed countries have opened, and is far higher than the 54 departments that developing countries have opened.

Fourth, China has continuously strengthened its protection of intellectual property rights. 40 years ago, the concept of "intellectual property" was an unfamiliar concept to most Chinese people, but by 2016, China had become the third country in the world to receive more than 1 million invention patent applications, trailing only the United States and Japan. In 2017, China’s external payment of intellectual property fees reached US$28.6 billion, with a deficit of more than US$20 billion. Particularly since 2012, we have made every effort to strengthen the protection of intellectual property rights, adopting measures such as promoting the increase of the statutory compensation ceiling, the establishment of a punitive damages system, and the establishment of specialized intellectual property courts. The rate at which foreign companies are winning in trademark infringement cases against China has reached more than 80%. Protecting intellectual property rights is also a necessity for China to create an innovative society and an innovative economy.

Although we have made many great achievements, in the past 40 years, we have also encountered some problems that need to be solved, such as serious environmental pollution, uneven regional development, and large urban-rural differences. China is still a developing country, one that is still home to more than 30 million people in poverty and more than 70 million disabled people. The per capita GDP level, when compared to other countries, is near the bottom. We fully understand these problems and have already developed solutions. In the next three years, we will commit ourselves to three major tasks, among others: pollution prevention, precise poverty alleviation, and prevention of systemic risks.

Ladies and gentlemen!

The 19th National Congress of the Communist Party of China held last year proposed that in the next stage, on the basis of continuing to promote development, China will focus on solving the problem of insufficient and imbalanced development, vigorously improve the quality and efficiency of development, and better meet the people’s ever-increasing economic, political, cultural, societal, and ecological needs. China will unswervingly implement innovative, well-coordinated, green, open, and mutually beneficial development, and promote the simultaneous development of new industrialization, informationization, urbanization, and agricultural modernization.

We have proposed a two-stage goal. The first stage stretches from 2020 to 2035. After China is comprehensively built into a moderately prosperous nation in 2020, basic socialist modernization will be realized. In the second stage, which picks up in 2035 and continues to the middle of this century, China will be built into a powerful, democratic, civilized, harmonious and beautiful country carried forward by socialist modernization.

In the past 40 years, China's economic development has been achieved under open conditions. In the future, China's economy will only achieve high-quality development under ever more open conditions. This strategic choice is based on China’s developmental needs, and it also serves, through practical action, to promote economic globalization for the benefit of the global population. The potential of China's development will bring new and unprecedented opportunities for global development. From now to the middle of this century, the blueprint of China’s development begins with the comprehensive construction of a moderately prosperous China and brings it to the basic realization of socialist modernization, and ultimately to the establishment of a modernized socialist power. Having successfully traveled this course, Chinese people will achieve common prosperity and enjoy happier lives. The blueprint also conveys that China will have greater capabilities and power to drive global economic growth, which ultimately will promote shared global development.

Ladies and gentlemen!

What has been nearly synchronous with the development of Reform and Opening Up is the relationship between China and the United States. In just two months, we will usher in the 40th anniversary of the establishment of diplomatic relations between our two countries. The recovery of diplomatic relations between China and the United States was a major event; one that has also changed the state of the world. Despite the struggles along the way, relations between China and the US have made historic progress and brought great benefits to the people of both nations. Ours has now become the most important bilateral relationship in the world.

In 1979, there were only a handful of official exchanges between China and the United States. Today, China and the US share close high-level exchanges and both governments have conducted extensive systematic dialogue. Since the new US government took office, both sides have established four high-level areas of dialogue, including diplomatic security dialogue, comprehensive economic dialogue, law enforcement and cyber security dialogue, and social and cultural dialogue, in order to foster cooperation, promote exchanges, and compromise differences.

In 1979, the bilateral trade volume between China and the US was only $2.45 billion, and there was no direct investment between the two nations. In 2017, bilateral trade in goods between China and the US reached $635.97 billion, and trade in services reached $75 billion. The two countries are each other's largest trading partners, and China is the third largest export market in the US. In 2017, the US and China’s two-way investment stock reached $213 billion. For the third consecutive year, Chinese companies have invested more in the US than the other way around. Additionally, China-US trade saves an average of $850 per American household and supports millions of US jobs.

In 1979, there were less than 10,000 Chinese and American personnel exchanges. In 2017, nearly 6 million people in China and the US crossed the Pacific. So far, there have already been 49 friendly province-state relations and 222 pairs of sister cities between both nations. 350,000 Chinese students study in major universities in the US, accounting for one-third of foreign students studying in the US. Chinese students are thus the largest international student group in the States.

The 40-year history of China-US relations reminds us that the common interests between China and the US far outweigh the differences. Cooperation between the two countries is conducive to global stability and prosperity, and is also in line with the expectations of not only the Chinese and American people, but also the international community at large.

For some time, China-US trade friction has caused widespread concern. We believe, as we always have, that trade cooperation between China and the US is complementary and mutually beneficial. The US government's adoption of unilateral trade and protectionist measures not only violates WTO rules, but also harms the interests of Chinese and American companies and consumers, and damages global value and industrial chains. It is thus inevitable that China takes necessary counter-measures. We hope that the US and China will walk toward the same goals and properly control their trade differences in the spirit of mutual respect, cooperation and mutual benefit, and actively build a balanced, inclusive and win-win new China-US trade order. Dialogue based in equality, integrity, and pragmatism is the only correct way to solve this problem. Not long ago, at the third annual meeting of the Chicago Branch of the Chinese Chamber of Commerce in America, nearly everyone in attendance agreed that China-US trade relations should be rooted in mutual benefit. Ultimately, despite any perceived gains, a trade war will only bring harm, and there will be no hope left for resolution. Last week, I attended the Indiana-China Chamber of Commerce business conference and annual dinner in Indianapolis. At the event, the Indiana Economic Development Corporation and the heads of several counties’ economic development departments said that implementing trade cooperation with China is beneficial to Indiana’s economy and to the Chinese people, and they hope that such cooperation can be maintained and strengthened.

Teachers, students, ladies and gentlemen!

Although China-US trade relations have recently traveled a bumpy road, the fundamentals of cooperation and exchange between our two nations have not changed. Take the area that the Consulate General covers as an example. Since the beginning of this year, local exchanges and cooperation have not lost momentum. Important leaders from Shaanxi, Hunan, Hebei, Zhejiang and other provinces have visited the Midwest with their delegations. On the opposite end, Governor Snyder of Michigan is currently making his 8th trip to China since he took office. Mayor Emanuel of Chicago also made a successful visit to China in early July. Several other governors said they would lead a delegation to visit China after midterm elections. For many years, China has been among the top three trading partners and has established itself as an important investment source in the Midwestern states. According to the statistics of Rongding Group, in the past 17 years, Chinese companies have invested 18 billion US dollars in the Midwest and created more than 47,000 jobs. 80,000 Chinese students are studying in major universities in the region, and an increasing amount of American students are studying in China.

During the Spring Festival this year, a high-level cultural performance group from China came to the Midwest for the second consecutive year to conduct a "Happy Chinese New Year" tour. Four NBA teams, including the Chicago Bulls, also held "Happy Chinese New Year" celebrations with more than 100,000 people in attendance. In addition, we co-hosted the first “China Year” with Minnesota and the first Chinese Week” with Michigan.

Ladies and gentlemen!

At such a critical moment in China-US relations today, we maintain that both sides should ground themselves in the historical experiences of the development of China-US relations, as well as the common aspirations of both nations’ peoples, in order to jointly safeguard the continuing development of healthy and stable bilateral relations.

First, we must be cooperative partners rather than competitors. The history of the development of China-US relations proves that China and the US can become cooperative partners. Cooperation has brought benefit, whereas division has brought damage. Competition between the two countries should not lead to conflict and confrontation. On the contrary, such competition should increase our two countries competitiveness and force us to seek and deepen cooperation.

Second, we must enhance mutual trust rather than mutual suspicion. The goal of China's development is to surpass itself; not to overpower the United States. China has no intention of replacing the US’ position as global leader. It is, on the other hand, willing to work with the US to maintain an international order rooted in the objectives and principles of the UN Charter. The US should abandon its zero-sum and cold war mentality.

Third, we must respect each other rather than do harm to the other for one’s own benefit. It is natural for China and the US to have differences. The important thing, however, is to respect each other’s core interests and major concerns. Once the political basis of bilateral relations is disrupted and even destroyed, it will become impossible to discuss the healthy and stable development of China-US relations. Trade wars and protectionism will only undermine the atmosphere of cooperation between the two countries and create more problems. Not only will our problems become unresolvable, but both nations will lose the opportunity to engage in each other’s future markets.

Ladies and gentlemen!

The future of the world belongs to the younger generation. The future of China-US relations also belongs to the younger generation of both countries. In the report of the 19th National Congress, President Xi offered a message to the young people of China: "When the young generation has ideals, skills, and a strong sense of responsibility, China and her people are afforded a bright, hopeful future. The Chinese Dream is not only a historical one, but also a realistic and futuristic one. It is a dream that belongs to our generation, but even more so to the youth who follow." We are prepared to collaborate with people from all professional domains throughout the Midwest, and especially with our young friends present here today, to work towards the healthy and stable development of China-US relations!

Thank you all!

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