Chinese Premier Wen Jiabao Addresses the China-Central and Eastern European Countries Economic and Trade Forum
(Budapest, June 25, 2011)
I am delighted to come to the beautiful city of Budapest and attend the China-Central and Eastern European Countries Economic and Trade Forum. Let me begin by extending warm congratulations on the opening of the forum. I would also like to express sincere appreciation to the Hungarian Government for its thoughtful arrangements, and pay high tribute to friends who have long been devoted to economic cooperation and trade between China and Central and East European countries.
Exchanges between our two sides date back to ancient times in spite of the long geographical distance. More than 2,000 years ago, the Silk Road closely linked us. Most countries in Central and Eastern Europe established diplomatic ties with the People’s Republic of China immediately after its founding, opening new pages in the annals of our friendly relations. During that time, although the international situation and the domestic situations of both sides have undergone big changes, we have always enjoyed mutual respect, mutual trust, mutual understanding and mutual support. Our traditional friendship has constantly deepened and cooperation in various fields has made tremendous progress.
Two-way trade has grown rapidly. In 2000, China’s trade with Central and East European countries was worth only $3 billion. In 2010, it surpassed $40 billion, representing annual average growth of 32 percent. China’s imports from Central and East European countries grew even faster, registering an average annual rate of 38.7 percent. Our trade mix has improved. The proportion of trade in electric, mechanic and hi-tech products has exceeded 60 percent. Today, rose oil, amber, crystal, beer and cars from Central and East European countries have entered numerous households in China. And the high quality yet inexpensive consumer goods from China have been warmly received by the local people here.
Two-way investment has burgeoned. So far, Central and East European countries have set up more than 2,000 enterprises in China. Investment by Chinese enterprises in those countries has also seen dynamic growth. The Chipobrok shipping company, established in 1951, was New China’s first joint venture with a foreign country. Today, the company owns 20 modern ocean cargo ships, and operates along shipping routes covering Asia, Europe, America and Africa. China’s Huawei Technologies has set up its European supply center in Hungary, creating more than 2,000 jobs for the local community. After acquired by the Wanhua Group of Yantai, Shandong Province, Hungary’s BorsodChem, a time-honored chemical enterprise in Central and Eastern Europe, has shown renewed vitality.
Cooperation areas have been expanding. In addition to the traditional fields of trade and investment, our cooperation in finance, tourism, legal services, green economy and infrastructure has steadily increased. The Bank of China has established its branch in Budapest, and Hainan Airlines has opened direct flight routes between Beijing and Budapest. These are the new bright spots in our cooperation. In 2010, almost 200,000 tourists from Central and East European countries visited China, and more than 60,000 Chinese tourists visited Central and East European countries as the first stop of their overseas trips. Such exchanges have brought our people closer to each other.
Cooperation mechanisms have been improving. In recent years, China and Central and East European countries have signed a series of bilateral agreements on economic, industrial, scientific and technological cooperation, including agreements on investment protection and avoidance of double taxation. They have provided sound institutional and legal guarantees for economic cooperation and trade between the two sides. We have put in place a joint economic commission mechanism to address major issues in our business cooperation through regular consultations. Moreover, our two sides have held various kinds of business forums, product exhibitions and trade fairs for entrepreneurs, providing important platforms for the business community to intensify exchanges and cooperation.
What has happened shows China and Central and East European countries cannot only be good friends who stand by each other through thick and thin, but also good partners drawing on each other’s strengths and pursuing win-win cooperation. The deeper our mutually beneficial cooperation goes, the stronger our traditional friendship will be.
We live at a time when the global political and economic landscape is undergoing major adjustments and changes. Our two sides have become increasingly interdependent with growing common interests, and our enterprises strongly wish for deeper cooperation. It is true the scale of trade and investment between us is still relatively modest now, but given the high economic complementarities, I see great potential and broad prospects for our business ties.
—Both sides have industries with unique strengths. You have advantages and distinctive technology and techniques in sectors such as auto making, ship building, aircraft manufacturing, sewage treatment, wine brewing and biopharmaceuticals. China has strengths in processing, manufacturing and infrastructure construction. If we draw on each other’s strengths and complement each other, we will be long-term and reliable partners in economic cooperation and trade.
—Both sides are important emerging markets in the world. China is at a stage of rapid industrialization and urbanization. Its consumption structure and industrial structure are being upgraded at a faster pace, and its market holds tremendous potential. Central and East European countries boast rich natural resources, solid industrial and agricultural bases and strong capabilities in science, technology and education, and they enjoy steady economic growth. The economic difficulties facing a few of these countries are only temporary, and we are fully confident in the development prospects of Central and East European countries.
—Both sides are attractive destinations for investment. We are all making efforts to improve the market economic structure, expand the scope of opening up, and improve laws and regulations to spur faster economic growth. For 18 consecutive years, China has attracted more foreign investment than any other developing country. With most Central and East European countries joining the EU and with the continuous improvement in their investment environments, this region now holds great appeal to enterprises from all countries, including China.
—Central and East European countries can serve as a gateway to China-EU cooperation. Located in the heart of Europe, you have well-connected transport facilities and serve as a bridge between Eastern and Western markets. By developing transit trade and making investment in Central and East European countries, Chinese enterprises can significantly cut their business costs and become integrated into the industrial system within the EU. And the two sides can also leverage EU policy incentives to jointly explore the west European market for win-win results.
China cherishes its long-standing and deep friendship with Central and East European countries. We always regard them as reliable friends and key partners in cooperation. When we in China pursue the strategy of diversifying foreign trade markets, and encourage Chinese companies to “go global,” we take Central and Eastern Europe as a strategic priority. My current visit is both a journey of friendship and a journey of cooperation. We want to work with you to develop new ways of cooperation, and push our business relationship to a higher level by expanding its size and broadening its scope. To this end, I would like to propose the following.
First, increase bilateral trade. Currently, trade between us takes up less than 4 percent of our respective total foreign trade, and less than 10 percent in China-EU trade. Much potential remains to be tapped. We should open markets wider to each other, reduce tariffs and non-tariff barriers. We should step up cooperation in customs, quality inspection, logistics, and personnel entry and exit so as to fully unleash the potential in our bilateral trade. China welcomes enterprises from Central and East European countries to actively explore the Chinese market. We are willing to hold more commodity fairs for you and set up designated areas at the China Import and Export Fair (Canton Fair) and the Eastern China Fair to help your competitive products access the Chinese market.
Second, promote two-way investment. This will not only boost our respective economies, but also contribute to greater balance in our bilateral trade. We must work intensively to improve laws and regulations on two-way investment, remove investment barriers of various kinds, actively engage in diversified forms of investment promotion activities, and strive for early substantive growth in two-way investment. We should continue to enhance investment cooperation in telecommunications, new energy, agriculture and natural resources development, and encourage joint establishment of industrial parks and hi-tech development zones. China supports competitive Chinese enterprises in investing in Central and East European countries, and actively participating in the merger, acquisition and reorganization of enterprises in these countries. We hope Central and East European countries will relax restrictions concerning market access and technical standards as appropriate, and provide policy support for investment by Chinese enterprises.
Third, enhance infrastructure construction cooperation. Chinese enterprises have solid strength and diverse experience in infrastructure construction, while Central and East European countries have big markets. There is a lot we can do together in this field. Chinese enterprises are now actively seeking opportunities to participate in infrastructure development in Central and East European countries. The Zemun Bridge in Serbia, which will soon be built, will become the first “business card” of Chinese enterprises to access markets in Central and East European countries. The Chinese Government supports Chinese enterprises in undertaking infrastructure projects in Central and East European countries through public-private partnership, build-operate-transfer and other customary formats in Europe, and we are willing to provide financial support in this regard. We hope the two sides can reach early agreement on big and landmark projects. China is willing to accelerate the construction of the Eurasia Railway and will support enterprises in establishing a smooth logistics network to facilitate the flow of goods and personnel between the two sides.
Fourth, deepen fiscal and financial cooperation. This will provide important guarantees for our business relations to reach higher levels. China sincerely welcomes the financial enterprises of Central and East European countries to start business in China. We support the financial enterprises of both sides in setting up branches in each other’s countries and increasing the scale of cross-border trade settlement in renminbi. China is exploring the possibility of setting up a cooperative fund between the two sides, which will provide strong support for our economic cooperation and trade. China is a responsible long-term investor in the European financial market. We support the economic and financial adjustment measures adopted by Central and East European countries, and have confidence in the future of their financial markets. We are willing to explore all kinds of effective ways of cooperation, and will continue to support the development of Central and East European countries. We hope that Central and East European countries will further open up their financial markets.
Fifth, expand people-to-people and cultural exchanges. People hold the key to sound state-to-state relations and friendship comes from exchanges between the people. We need to increase exchanges in education, culture, health, sports, tourism and other fields. We should enhance the mutual understanding and friendship between people of the two sides, particularly the young people. China supports exchanges between institutions of higher learning of the two sides and hopes to see more students from Central and East European countries in China. We also encourage more exchanges between our science communities. Central and East European countries have extensive tourism resources. We will introduce these resources to the Chinese people and we support an increased number of Central and East European countries in acquiring Approved Destination Status for Chinese tourists. We hope there will be more direct flight routes between us. We want to push forward our cooperation in human resources training and will invite greater numbers of officials and technical personnel from Central and East European countries to China for training courses.
Since we adopted the reform and opening-up policy in 1978, tremendous changes have taken place in China. But the fact China remains a developing country has not changed. The Chinese people’s friendship towards people in Central and East European countries has not changed. And our sincerity in pursuing win-win cooperation with you has not changed. We welcome enterprises from Central and East European countries to join in China’s development process, share our development opportunities and play their part in promoting our common development through concrete actions.
As the Hungarian saying goes, “Diligent people do not wait in idleness for the coming of tomorrow.” I believe that, with a pioneering spirit, business people of both sides will take this forum as a new starting point to seize opportunities and work hand in hand to usher in a new phase in our economic cooperation and trade.
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