China will Keep its Door Open Forever

–Speech by Premier Wen Jiabao at Opening Ceremony of the 110th Session of the China Import and Export Fair and the Forum on the Tenth Anniversary of China’s Accession to the WTO.

Distinguished guests,
Dear friends,
Ladies and Gentlemen,

Today we are joyfully gathered here to celebrate the opening of the 110th session of the China Import and Export Fair, known as the Canton Fair. I wish to begin by extending my warmest welcome to all the distinguished guests present, and paying my high tribute to the people from all circles who have made contribution to the development of China’s foreign trade over the years.

The first Canton Fair was held in 1957 by the Chinese government. For more than 50 years, the Canton Fair has adapted itself to the changing world by constantly innovating its exhibition concept and modality and improving the quality of participating enterprises and commodities, thus maintaining its vigor and growth momentum. It has become the longest-standing international exhibition in China with the largest participation and the best reputation, as well as the microcosm of the development of China’s foreign trade. The history of the Canton Fair is indeed the history of New China’s openness coming alive.

Looking ahead, with China’s rapid economic development and steady deepening of reform and opening-up, the Canton Fair is faced with an even broader prospect of development. We are confident that the Fair will be elevated to higher levels with greater effectiveness and more of its unique styles, thus making a greater contribution to China’s thriving trade with the rest of the world.

Ladies and Gentlemen,

In two months’ time, China will mark the 10th anniversary of its accession to the World Trade Organization, a momentous event in China’s opening to the outside world. If we describe the Canton Fair as a window China opened to the world, then the accession to the WTO can be seen as a door China opened to the world. If we describe the Canton Fair as China extending a hand to the world, then its WTO membership is its full embrace of this world.

Over the past ten years since WTO accession, China has undergone stupendous changes, so have its trade relations with the outside world and its standing and role in the world family of nations. Looking back, we may draw three important conclusions.

First, China is a country that honors its words and has fulfilled all its solemn commitments upon WTO accession.

Over the decade, we have completely fulfilled our commitments by gradually lowering tariffs on imported goods, abolishing all import quotas, licenses and other non-tariff measures, liberalizing access to foreign trade operation, and substantially reducing the threshold for foreign investment. China’s overall tariff rate has gone down from 15.3% to 9.8%, far lower than the average of developing countries. One hundred service trade sectors have been opened, which is the level close to the developed countries.

While making our market increasingly accessible, we have strived to ensure the stability, transparency and predictability of our opening policy. In ten years, China’s central government has sorted out more than 2,300 pieces of laws, decrees and departmental regulations, with the local governments sorting out over 190,000 pieces of local policies and regulations, thus making China’s domestic laws and regulations on foreign economic relations consistent with its WTO accession commitments.

Second, China is a responsible country that has actively shouldered international responsibilities commensurate with the level of its development.

Over the decade, China has firmly supported the WTO Doha Round negotiations, taken an active part in international macro-economic policy coordination, participated in the development of the G20 and other global economic governance mechanisms, promoted reform of international financial system and taken concrete steps against trade protectionism. At the time of raging international financial crisis, China adopted timely and forceful policies to stimulate domestic demand, sent more than 30 large buying missions abroad, and stepped up import and outbound investment, thus making important contribution to world economic recovery. China was the first developing country to formulate and implement a National Climate Change Program, and has been among the champions in recent years in terms of strong efforts of energy conservation and emission reduction. Earnestly implementing the Millennium Development Goals (MDGs) of the United Nations, China is the only country in the world that has reduced its poor population by half ahead of schedule, and has actively offered foreign aid as its ability permits. In ten years, China has altogether provided over 170 billion RMB yuan in foreign assistance and exempted nearly 30 billion RMB yuan of matured debts incurred by 50 heavily indebted poor countries. What is more, China has pledged zero-tariff treatment to over 95% of imports from the least developed countries, and trained over 60,000 personnel from 173 developing countries and 13 regional organizations. All this has significantly built up the capacity of the recipient countries for independent development.

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Third, China is dedicated to common development while always pursuing an opening-up policy based on equality, mutual benefit and win-win cooperation.

The accession to the WTO has had huge and far-reaching impacts on China, the most obvious one being that China’s open economy receives a great boost for development and its overall competitiveness improves. During the decade, China rose from the sixth to the second place in the world in terms of volume of trade in goods with export ranking the first. FDI totaled US$759.5 billion, the highest among developing countries. Overseas direct investment reached US$68.8 billion in 2010, the fifth largest in the world, which represented an average annual growth of over 40%.Our various industries have weathered the fierce international competition. The WTO membership has brought the Chinese people many tangible benefits. More importantly, it has widened the horizon of our people, changed their way of thinking and promoted China’s structural reform and institutional innovation, thus enhancing the inherent drive for China’s future development.

China’s WTO accession has also brought tangible benefits to many countries around the world. During the decade, China imported US$750 billion worth of goods each year on average and created more than 14 million jobs for its trading partners. Foreign invested enterprises in China remitted a total of US$261.7 billion in profits, representing an average annual growth of 30%. Chinese enterprises operating overseas employed nearly 800,000 people locally and paid over US$10 billion in taxes every year. The quality and affordable Chinese products have benefited consumers from around the world. During the decade, thanks to imported goods from China, American consumers saved more than US$600 billion in spending. Every family in the EU saved up to 300 euros every year by the same token.

Facts have shown that a more open China has benefited not only the 1.3 billion people of China, but also the people around the world. China’s development is peaceful, open, cooperation-based and win-win-oriented. A WTO family with China on board is a success story for both China and the world.

Ladies and Gentlemen,

The present-day world is an open one with economic globalization and revolution in science and technology creating conditions favorable for countries to engage in mutually beneficial cooperation geared to common development. It has become the general trend and desire of the people for the world to stay open and keep developing rather than become closed and stagnant. Moreover, as we are in the middle of resisting the international financial crisis, promoting trade and investment among countries holds the key to early world economic recovery. What worries us is that due to various factors, the development of global multilateral trading regime is anything but smooth sailing. The Doha Round negotiations have bogged down, trade and investment protectionism is raising its head with frequent abuses of anti-dumping, countervailing and other trade remedies, and the tendency of politicizing trade frictions has become more salient. All this has cast a dark shadow over world economic recovery.

History shows that international trade that is free, open and fair can improve division of labor, increase productivity, enlarge the marketplace and expand employment, which serves the fundamental interests of all countries. Trade protectionism, conversely, can only drag the feet of the world economic recovery and hurt people of all countries in the end. At this critical juncture characterized by volatile international financial markets, rising economic instability and uncertainty and marked slowdown of recovery of major economies, the international community should join hands and work closely together to open their markets still wider with greater sincerity and determination, reject protectionism of all forms and manifestations with a clear-cut attitude and concrete actions, and find proper and more rational solutions to trade frictions. That is the only way to break the spell of the global financial crisis, improve the risk preparedness of the international community, and achieve strong, sustainable and balanced growth of the world economy.

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Our state policy of unswervingly opening to the outside world and our win-win strategy of opening-up are the free choices made by our people. We have learned from our own experience, including bitter lessons that one cannot succeed in development behind closed doors. China is still a developing country with a big population, weak economic foundation, uneven development, relative backwardness in science and technology, and far from complete economic and political institutions. These are our basic national conditions. That is why we need to constantly free our mind, keep pace with the times, press ahead with reform and opening-up with rock-solid determination and courage and strive to draw on the achievements of all civilizations with an open mind. Thanks to much improved conditions for opening-up and even greater support from the people, China’s opening to the outside world is promised with a bright future. The recently-formulated 12th Five-Year Plan has clearly outlined a more proactive opening strategy, which gives expression to the tremendous courage and resolve of the government and people of China for continued opening-up.

—-We will combine expanding import with stabilizing export in an effort to make our international payments more balanced. China follows an open trade policy, emphasizing both export and import and refraining from pure trade surplus. Five years ago, the Canton Fair changed its name to the China Import and Export Fair and added the International Pavilion, which is a remarkable testimony to China’s desire for a balanced growth in trade. Thanks to our efforts, China’s import and export have been moving towards greater balance. For example, our trade surplus in 2009 went down by US$100 billion compared with the previous year. It further went down by US$12.6billion in 2010.This year, the share of trade surplus in GDP is expected to come under 3%.By our estimate, China’s total import in the next five years will top US$8 trillion, which will offer a lot more opportunities for businesses around the world. We are ready to strengthen financial and economic cooperation with countries that have substantial trade deficit with China and resolve the issue of trade imbalance gradually in the course of continued development of trade. We also hope that relevant countries will lose no time in recognizing China’s market economy status and relax their control on high-and new-tech exports to China so as to create conditions for a more balanced growth of trade.

—-We will combine absorbing foreign investment with investing abroad in an effort to enlarge to room for economic development.China is now relatively rich in capital and foreign exchange reserves, which is an advantage of China’s development. But we must not overlook the role of foreign capital. The technological innovation, managerial expertise and market opportunities that are often associated with foreign investment are not what one can buy with money. We will continue to welcome investors from all countries to China, especially to the central and western parts of the country. We will attach greater importance to bringing into China advanced know-how, human talents and intellectual resources and to protecting intellectual property rights. We will continue to cultivate an open legal, policy and market environment for all types of market entities at home and abroad by sorting out relevant Chinese laws, regulations, policies and measures and ensuring their consistence with the WTO rules. We will speed up the implementation of the “going global” strategy, encourage more capable and credible Chinese firms to invest overseas, pay attention to the cooperation schemes aimed at improving the livelihood of the underdeveloped countries and enhancing their capacity for independent development, and stress the need to undertake relevant social responsibilities in the interest of the local communities.

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—-We will combine deepening openness in the coastal areas with greater openness in the hinterland and border areas in an effort to further improve China’s regional opening-up layout. The coastal areas must accelerate the development of new international competitive edge, transforming the themselves from being a world factory to being a base for R&D, design, brand marketing and service outsourcing, and moving up the international value chain. The hinterland areas should bring out their comparative advantages of rich natural resources and labor, work hard to improve their investment environment, actively receive relocated industries from overseas and China’s coastal areas and build up more high-caliber manufacturing and processing bases. The border areas should give full play to their geographical advantages, put in place special opening-up policies, speed up the building of major ports, border cities, border economic cooperation zones and key development and opening-up experimental zones with a view to increasing to overall level of openness.

—-We will combine openness in economic field with openness in other fields in an effort to promote reform, development and innovation. Economy remains the basis and key priority of China’s opening-up program. We will take steady steps to widen the openness of our service industry, keep up the reform in the RMB exchange rate forming mechanism, expand the cross-border use of RMB and gradually make RMB convertible under the capital account. At the same time, we will step up exchanges and cooperation with other countries in education, science, technology, culture, health and other areas so as to promote reform and development of China’s social programs through ever enlarged openness.

—-We will combine opening to the developed countries with opening to the developing countries in an effort to expand the convergence of interests with all parties. China and the developed countries are at different stages of development with strong economic complementarities and broad prospects for mutually beneficial cooperation. It is necessary for both sides to step up strategic dialogue, increase strategic trust, broaden areas of cooperation and properly handle their trade frictions. The developing countries are blessed with an enormous potential for development and they occupy an important position in China’s market diversification and “going global” strategies. We are ready to engage in economic cooperation with all countries on the basis of equality and mutual benefit, irrespective of their wealth or social systems.

—-We will combine openness in the multilateral context with openness in the bilateral context while continuing to play a constructive role in the international economic system. We are ready to engage more actively in multilateral economic and trade affairs and management of global issues, sharing out development opportunities with other countries and taking on the challenges together. We are also ready to push forward regional cooperation process and explore the possibility of establishing free trade areas with relevant countries and regions. I wish to take this opportunity to repeat my call for all parties to uphold the development mandate of the WTO Doha Round negotiations, pay attention to the interests of the least developed countries and advance the negotiations in a results-oriented way on the basis of locking in the existing outcomes. China has always been supportive of the negotiations and sincerely looks forward to substantive outcomes at an early date.

Ladies and Gentlemen,

China’s opening to the outside world in the past 30 years and more tells us that only an open and inclusive country can be strong and prosperous and achievements in opening-up, keep the policy in place throughout our modernization process, vigorously move the great cause forward and work tirelessly to build a prosperous, democratic, culturally advanced and harmonious China and to ensure prosperity, development and progress in the world.

Thank you.

2011/10/14

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