China wants mutual trust and benefit
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Q: Given the persistent impact of the international financial crisis and growing uncertainties and destabilizing factors in the international economic environment, what role do you think China and other Asian countries have played in boosting economic growth in Asia and the world at large?
A: At the ASEAN+3 Summit held in Hanoi, Vietnam, recently, Republic of Korea (ROK) President Lee Myung-bak and the leaders of some ASEAN countries said that with crisis come opportunities. Every crisis and challenge, from the Asian financial crisis to the global financial crisis, has made Asian countries stronger and more united, lifted East Asia cooperation to a new level and contributed to the prosperity of the region and the world.
In October 2008, shortly after the global financial crisis broke out, leaders of East Asian countries held a breakfast meeting during the 7th Asia-Europe Meeting in Beijing. They exchanged views and reached an important eight-point consensus on ways to fend off risks and maintain stability in the Asian and the world economies, in finance, in capital markets and in people's livelihood.
Over the past two years, carrying forward the fine tradition of working together to tide over difficulties, Asian countries have strengthened solidarity and coordination, and actively promoted regional cooperation while rolling out their own stimulus packages suited to their national conditions. Asian countries have thus played an important role in helping Asia to lead the economic rebound, and made East Asia a major engine for world economic growth.
Trade: From January to September this year, the trade volume between China and other Asian countries crossed $640 billion, up 38 percent year-on-year. China's imports from Asian countries reached $361.3 billion, up by 44 percent year-on-year. China's trade deficit with Asian countries was $79.6 billion, including a trade deficit of $52.2 billion with the ROK, $41.4 billion with Japan, and $12.2 billion with ASEAN member states. China remains the biggest export market for other Asian countries. We have scaled up assistance to countries in South Asia such as Bangladesh, Afghanistan and Pakistan. We are giving preferential tariff treatment to 70 percent of imports from Bangladesh and Afghanistan to reduce trade imbalances.
Free trade areas: This is the first year of the full establishment of the China-ASEAN Free Trade Area (CAFTA). As the biggest FTA among developing countries, CAFTA has substantially increased the efficiency in the flow of production factors like capital, resources, technology and professional talent, offering an environment never seen before for more trade and investment cooperation. According to China's statistics, from January to September this year, China-ASEAN trade volume reached $211.31 billion, up 43.7 percent year-on-year. The two-way trade volume will hopefully hit a historical high this year.
China and other East Asian countries are actively promoting the building of an East Asia Free Trade Area. China, Japan and the ROK have set the target of 2012 to complete a joint research on the possibility of setting up a trilateral FTA. We are also working with other East Asian countries to jointly reject trade protectionism and minimize the impact of the global financial crisis.
Investment: The Chinese government encourages established enterprises to expand and optimize their investments in Asian countries. Our statistics show that in the first quarter of this year, China's non-financial investment in Asian countries grew by 102 percent year-on-year, and Asia is now home to more Chinese-invested enterprises outside China than any other region in the world. In addition, the stock of China's direct investment in ASEAN countries reached $9.6 billion by the end of 2009, more than half of which had been made since 2008. Chinese investments have expanded from conventional sectors like mining and construction to energy, manufacturing and commercial services.
Infrastructure and connectivity: China actively supports the Master Plan on ASEAN Connectivity, and is seeking to cooperate with East Asian countries in developing roads, railways, navigation routes and ports in the region. We have also intensified our participation and cooperation in Greater Mekong Sub-region Economic Cooperation, the ASEAN Mekong Basin Development Cooperation, as well as other mechanisms.
Financial cooperation: Thanks to the concerted efforts of all parties the 10+3 financial cooperation has continued to make substantive progress. We have maintained financial stability in East Asia and achieved the Chiang Mai Initiative Multilateralization, establishing a regional foreign exchange reserve pool of $120 billion and a regional Credit Guarantee and Investment Facility of $700 million. China has signed bilateral currency exchange agreements worth 360 billion yuan ($54.27 billion) with Malaysia, Indonesia and the ROK. China, Japan and the ROK have decided to negotiate and sign a trilateral investment agreement as soon as possible.
China is now working with other East Asian countries to make the Chiang Mai Initiative more effective, strengthen exchanges and coordination on macro-economic policies, advance the development of an Asian bond market, jointly explore ways to promote cross-border bond transactions in the region, develop the capability of the bond markets, and conduct forward-looking and strategic research on how to deepen East Asian financial cooperation.
Science, technology, energy, and environmental protection: China and Japan are actively promoting cooperation on the "China-Japan Caofeidian Eco-Industrial Park" project, and China and Singapore are working on the "Sino-Singaporean Tianjin Eco-City" demonstration project. China, Japan and the ROK are earnestly implementing the Joint Statement on Strengthening Science and Innovation Cooperation Among the People's Republic of China, Japan and the Republic of Korea, and are encouraging research institutes, universities and businesses to conduct all-directional and in-depth cooperation in such key areas as energy conservation and environmental protection, new energy and renewable energy, and focusing on technology research, application research and technical innovation.
Besides, China has extended a helping hand to other Asian countries hit by natural disasters. China has provided disaster relief worth $250 million to Pakistan after the country was ravaged by one of the worst floods in history. In the wake of the earthquake, tsunami and volcano eruption in Indonesia, President Hu Jintao immediately sent a message of sympathy to Indonesian President Susilo Bambang Yudhoyono, and the Chinese government offered $500,000 and the Red Cross Society of China $30,000 in grants to that country. China has taken an active part in the post-disaster reconstruction of Pakistan and the post-conflict reconstruction of Afghanistan and Sri Lanka. These efforts reflect the goodwill of the Chinese people.
Development is a common task for China and other Asian countries, and it is what concerns all of us most in Asia. The global financial crisis is far from over and the Asian economy is still confronted by many foreseeable and unforeseeable risks and challenges. We will stay committed to the opening-up strategy of mutual progress and mutual benefit, work together with other Asian countries and help and support each other to push the Asian economy toward total recovery and then growth.
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