|Speech at the Business Luncheon hosted by Chicago Sister Cities China Committee and the Chinatown Chamber of Commerce|
Chairman William Spence of China Committee of Chicago Sister Cities,
Chairman Tony Shu of Chinatown Chamber of Commerce,
Distinguished Guests, Dear Friends, Ladies and Gentlemen
Thank you, Chairman Spence and President Shu for your kind words. Also thanks to the China Committee of Chicago Sister Cities and Chicago Chinatown Chamber of Commerce for organizing this wonderful luncheon and to all the distinguished guests and friends for your kind attendance.
I wish to take this opportunity to express my deep appreciation to all of you for your contribution to enhancing the friendship and cooperation between China and Chicago.
I will start my speech with China (Shanghai) Pilot Free Trade Zone. As you may know, this free trade zone was officially launched yesterday, which covers an area of about 11 square miles in the eastern outskirts of Shanghai. The purpose of this free trade zone is to conduct trials of reform for 2 or 3 years in the areas such as transforming government functions, expanding the opening-up of the service sector, changing the management model of foreign investment in China, and expediting RMB yuan's convertibility under capital account and a full-scale opening-up of the financial service sector so as to find new ways in deepening reforms and accelerating opening-up in whole China.
More specifically, this free trade zone is supposed to achieve a series of goals such as the following: setting up a management model on pre-establishment national treatment and negative list, suspending or canceling restrictions on the access controls of investors' qualification and their equity ratio, creating conditions to test RMB yuan convertibility under the capital account, market-set interest rates and cross-border use of the Chinese currency.
This free trade zone is a historic decision by the Chinese government, which has fully demonstrated China's strong will in pushing forward reform and opening-up. In my opinion, this free trade zone marks another milestone in China's reform and opening-up. The messages it carries are really exciting and encouraging and its implications will reach very far in the future.
China is the only country in the world which has conducted reform and opening-up for more than 30 years and is still pursuing this course with even greater enthusiasm. China will continue to be a land of immense opportunities.
The recent slow-down in the growth of China's economy was mainly the deliberate policy choice by the Chinese government which focuses more on improving the quality of the economy rather than seeking high speed. Great efforts have been made in economic restructuring and industrial upgrading with the aim of transforming the investment-intensive and export-driven economic model to one that relies more on domestic demands. Concrete measures of reform have been adopted to reduce government's interventions in the economy and give the market a bigger play and the private sector greater space to grow.
China has defined the "upper and lower limits" of the reasonable range of its economic performance with a view to avoiding excessive fluctuations. The lower limit, meaning a GDP growth rate of around 7.5%,is intended to ensure steady growth and employment. The upper limit, with a consumer price index at around 3.5%, is meant to prevent inflation.
As it presses ahead with its process of urbanization and industrialization as well as building an innovation-driven nation, China is confident not only in meeting the target for economic development in the coming years, but also in achieving the goal of doubling its GDP and per capita income by the year 2020 on the basis of 2010.
China-US trade and economic relations are enjoying good momentum of development. As reflected at the fifth round of China-US Strategic and Economic Dialogues held in July, both sides have strong interests in pushing forward this extremely important economic relationship in an all-around way.
There will be more wonderful stories to tell in future.
Bilateral trade in goods will continue to expand, and China will become an even more important market for US products. It is officially estimated by the Chinese Government that China's total import from overseas will reach 10 trillion US dollars in the next five years. Of course, whether US can significantly increase its export to China will not only depend on what China wishes to buy, but will more importantly depend on what the US wants to sell. It would serve the interests of the US side, if the restrictions on US exports of hi-tech related products to China could be eased at an early date.
Bilateral trade in services will also witness greater development. China is working hard to increase the share of service industry in the national economy. In the meantime, China is actively studying on what measures should be adopted to further open up its service sector including e-commerce and factoring. In the ten years between 2001 and 2011, US export of services to China grew almost 500%. This trend is likely to continue in the years ahead.
Here, I particularly want to mention education and tourism. There are about 200,000 Chinese students studying in America, who alone spend about 10 billion US dollars here annually. Last year, 1.5 million Chinese visited America, who were also great contributors to bilateral service trade. It is estimated that in the next 5 years, about 400 million Chinese citizens will travel abroad. If the US could loosen its visa policy on China, the Chinese tourists visiting the US are expected to increase with considerable margin.
New opportunities will emerge for US investment in China. China has designated several new industries as priority areas for investment, which includes energy conservation and environment protection, new information technology, biology, high-end equipment manufacturing, new materials, new energy and new-energy vehicles. In 2011, China made the plan to invest a total of over $ 800 billion by the year 2015 in the environmental industry alone and invest $608 billion in ten years to improve water conservancy construction. I believe US companies will find opportunities for investment in these areas.
The Chinese investment in the US is still far from reaching its peak. In the next five years, China is expected to invest 500 billion US dollars overseas. Chinese investors' interests in America and their investment capability will continue to grow. Many economic sectors in America will be attractive to Chinese investment. Recently, Shuanghui's acquisition of Smithfield has been approved by the US side. This is positive development. More such signals of welcoming Chinese investment are certainly important to boost Chinese investors confidence in investing America.
Recently, China and the US have agreed to carry out substantive negotiations on the bilateral investment treaty on the basis of pre-establishment national treatment and negative list. It is indeed a good news to both Chinese and American investors. I hope and believe that China and the US will become the major investing partner to each other in the not very far future.
Ten years ago, when China joined the World Trade Organization, not many people, if there was any, would have foreseen today's prosperity of China and the vigorous growth of China-US economic relations. The future development of China and China-US economic relations in the next ten years may also exceed the expectation of many of us.
In June, during their historic meeting at Annenberg Estate, California, President Xi jinping and President Obama reached a very important agreement to build a new model of major-country relations between China and the US, which means "no conflict or confrontation", "mutual respect" and "win-win cooperation". China is eager to work with the US side to advance their bilateral relations along this direction and bring more tangible benefits to both peoples. Thank you.