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Consul General Zhao Jian's Speech at Central Asia Productivity Research Center Luncheon
2019/06/26

Professor Harry Lepinske,
Ladies and Gentlemen,
Dear Friends,

Good noon!

It gives me great pleasure to attend this luncheon and exchange views with friends from various sectors on China-U.S. relations. First of all, I would like to thank Professor Lepinske for organizing this event and for his long-standing effort in promoting the China-U.S. exchanges.

This year marks the 40th anniversary of the establishment of diplomatic relations between China and the United States. Over the past 40 years, despite the twists and turns, the China-U.S. ties have achieved historic development and become one of the most important bilateral relations in the world today, contributing not only to the well-being of our two nations, but also to world peace and development.

Confucius said, "One should have no more doubt at 40". But, turning 40, the China-U.S. relations have been caught in escalating trade tensions. Then how to look at the current state of China-U.S. relations, the trade and economic relations in particular? Here, I would like to share with you some of my thoughts.

First, our economies are highly complementary and interconnected and our interests deeply intertwined. Forty years ago, no one could have imagined the level the China-U.S. trade and economic relations have reached today. Now we are each other's largest trade partner and important investment destinations. Bilateral trade in goods has increased 252-fold from less than US$ 2.5 billion the time we established diplomatic ties to over US$ 630 billion in 2018. Two-way direct investment, which was virtually nonexistent 40 years ago, has surged to a cumulative value of nearly US$ 160 billion at the end of 2018. Now, almost all major U.S. companies have operations in China. In 2017, the total sales revenue of U.S. companies in China exceeded US$ 700 billion, with a profit of over US$ 50 billion. Due to globalization, many U.S. manufacturers mainly rely on China for raw materials and intermediate products. There are also many U.S. companies that do production in China and export their products back to the U.S. Among China's trade surplus in goods with the U.S., 54% comes from foreign-funded enterprises and 53% comes from processing trade. The truth of China-U.S. trade relations is that China and the U.S. are mutually interdependent and closely cooperating in the global industry and supply chains and neither country can do without the other.

Second, our exchanges and cooperation are mutually beneficial in nature and have brought tangible benefits to the people of our two nations. The past 40 years has seen continued expansion of China-U.S. cooperation in the economic, cultural, educational, technological and many other fields. The fundamental reason behind this is that it serves the shared interests of our people. Economically speaking, the U.S. has provided China with enormous and steady external demand, and the U.S. investment in China has played a positive role in driving China's economic development. Similarly, the U.S. has also benefited greatly from its economic relations with China. The Chinese market has offered the U.S. enterprises vast space for development. Import of inexpensive quality goods from China has enriched the lives of American people and lowered consumption costs of American families. Statistics show that U.S. trade with China on average saves every American household US$ 850 a year, or 1.5% of the average American household income; in 2015, goods imported from China helped lower the U.S. consumer prices by 1% to 1.5%. In addition, in the 10 years between 2009 and 2018, the U.S. exports to China supported over 11 million American jobs.

Bilateral exchanges in the field of education have also benefited both sides. A great many Chinese students have returned to China after completing studies in the U.S. and played an important role in China's modernization drive. At the same time, Chinese students and scholars in the U.S. have made outstanding contributions to scientific and technological progress and economic development in this country with their wisdom and hard work. Speaking of science and technology, in 2018 alone, China paid over US$ 8 billion in patent royalties to the U.S. and a large number of patented technologies from U.S. companies have been put into commercial use in China. And revenues from such patent royalties are used by these companies to further enhance their scientific research capability. All in all, the China-U.S. cooperation is a two-way interaction that has combined complementary advantages to mutual benefit.

Third, the people of China and the U.S. see each other as friends and wish to see deeper friendship between the two countries. 235 years ago, the "Empress of China" reached the shores of China to open trade. 70 years ago, Americans crossed the vast ocean to aid China in resisting the fascists' aggression. Today, with over ten thousand people traveling across the Pacific Ocean each day, more than 5.3 million mutual visits are made between the two countries every year. The number of Chinese students studying in the U.S. has reached 360,000 and that of American students in China reached 20,000. More and more American primary and middle school students are learning Chinese, and many young volunteers from the U.S. have made their way to China's rural and remote areas to assist in local education efforts. All this has shown that the friendship between the Chinese and American people has transcended time and space as an inexhaustible source of strength underpinning the development of bilateral relations. Now our two countries have established 50 friendly province-state and 227 friendly city relations. Not long ago, the 4th China-U.S. Province-State Forum was successfully held, and the 4th China-U.S. Sister Cities Conference will soon be held here in the U.S. This testifies to the common desire of our people for deeper mutual understanding and cooperation and the strong public support for friendly relations between our two countries.

Fourth, the China-U.S. relations have long transcended bilateral scope and are exerting increasing global impact. China and the U.S. are the two largest economies in the world and are both permanent members of the UN Security Council. Whether the China-U.S. relations can go well or not not only directly affects the well-being of our two nations, but also bears on world peace, stability and prosperity. When the U.S. raised tariffs in escalation of trade dispute with China, the Chinese and American businesses are not the only ones that are affected. Forecast for global trade growth in 2019 is expected to drop from 3.7% to 2.6%, and that for global economic growth will drop from 3.6% to 3.3%.

As the international situation undergoes profound and complex changes, it has become more important than ever for China and the United States to cooperate closely in addressing the interwoven traditional and nontraditional security issues, global challenges like climate change, terrorism, nuclear proliferation and public health hazards, as well as many regional hot-spot issues.

For some time now, there have been some jarring noises in the U.S. regarding China-U.S. relations. Some believe that the U.S. should launch this trade war against China because it has suffered losses in bilateral trade. Some want the U.S. to contain or engage in confrontation with China because they believe that China wants to challenge the U.S. in the Asia-Pacific region. Some others even push for decoupling from or a civilization clash with China. These people do not understand China, nor do they understand the China-U.S. relations.

It has been 40 years since China and the United States established diplomatic relations and we are now living in the 21st century. We cannot get stuck in the cold war and zero-sum game mentality while living in the global village. What happened in the past 40 years tells us that we both stand to gain from cooperation and lose from confrontation. Cooperation is the only correct path for our two countries. We cannot allow the China-U.S. relations to be defined by differences and conflicts, just as we cannot allow the China-U.S. relations to be dictated by bias and misjudgment.

This year marks the 70th anniversary of the founding of the People's Republic of China. The success we have achieved over the past 70 years is the result of the hard effort of the Chinese people. At the same time, we also owe it to the peaceful international environment and the mutually beneficial cooperation we have carried out with other countries. As such, China will continue to follow the path of peaceful development and the win-win strategy of opening-up and stays committed to working with all other countries in the world to build a community with a shared future for mankind.

While following the path of socialism with Chinese characteristics that has been proven well suited to China's national conditions, we have no intention to export our ideology or values, nor do we intend to replace or crowd out anyone or fight any country for supremacy. May what happen in the international arena, China will never halt on its path of reform and will only open its door wider to the world. The mission of China is to help its people live a happier and more prosperous life through hard work, and contribute more to the common prosperity and development of the world by engaging in exchanges and cooperation with other countries.

Forty years ago, with extraordinary strategic vision and political courage, the leaders of China and the United States made the historic decision to establish diplomatic relations. Forty years on, our shared responsibility for maintaining world peace and promoting common development has increased rather than decreased. Our common interests and space for cooperation have expanded rather than diminished. In developing China-U.S. relations, we need to bear in mind the fundamental interests of our people and the people of the world, take a long-term vision and be open and inclusive. We need to work together to increase mutual understanding and mutual trust and expand cooperation and exchanges to mutual benefit on the basis of mutual respect and equality. Only in this way can we ensure continued development of China-U.S. relations and create a brighter future for our people and the people around the world. This conforms not only to the common aspiration of our people, but also to the general expectation of the international community!

Thank you!

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