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Remarks by Consul General Xue Bing at the Luncheon of Canada China Business Council
(March 30th 2016)
2016/04/05

Honorable Minister Chrystia Freeland,

Ladies and Gentlemen,

Good afternoon! It gives me a great pleasure to attend this luncheon today. First of all, on behalf of the Chinese Consulate General in Toronto, I would like to thank the CCBC for the tremendous work you have done in preparing for this event.

Now the season of spring is coming back, and everything turns fresh and vibrant. Similarly, the bilateral relations between China and Canada are facing new opportunities. Therefore, it is the right time and of significance that Minister Freeland is invited to introduce the vision and plans of the Canadian government to develop the economic and trade relations with China. I thank you for that, Minister.

Recently, there are many speculations on China's economic development. In my opinion, China's economy is in a generally stable track and with bright prospects. Figures and facts tell us that China's economy still took the lead worldwide in quantity, while it is significantly improved in quality. Faced with continued weak world economic recovery in 2015, China's GDP grew by 6.9 percent, which means over 500 billion US dollars, and ranking top among major global economies. China contributed 25% to the economic growth of the world. The Chinese government substantially reduced the administrative interventions. The outdated industrial capacity was further eliminated. The contribution from consumption and service sector to the economic growth raised significantly. The consumption maintained a double-digit growth and contributed 66.4% to the GDP, which steadily upgraded the economic structure and benefits.

In 2016, China's economy will continue to grow at a pace of 6.5% to 7%. In order to achieve this target, the Chinese government will adopt the following measures. No.1, we will moderately increase the fiscal deficit to reduce 76 billion USD of tax burden for both enterprises and individuals. Meanwhile, the prudent monetary policy will be sustained to keep a reasonable and adequate liquidity. Currently, the government’s debt-to-GDP ratio is less than 40%, and for the central government, it is only 17%. We have a high savings rate. We are not only well positioned to prevent systemic regional financial risks, but also supported by enough policy tools to maintain a stable economy.

No.2, we will stick to the course of reform and opening up, orderly open the services, financial and other sectors to the outside world, and make China a most preferred destination for foreign investment with more opportunities and better environment.

No.3, we will strengthen structural reform on the supply side, foster new driving force for economic growth, exercise an innovation-driven strategy, encourage popular entrepreneurship and innovation, further develop the service sector, high-tech industries, small and medium sized enterprises and micro companies, and increase the competitiveness of the real economy.

No.4, we will continue to improve people's livelihood while adjusting the economic structure. We will strengthen the fundamental role of consumption in promoting economic growth. We will support the growth of consumption in services such as elderly care, health, housekeeping, education and training, and culture and sports. We will strengthen the growth of emerging areas of consumption such as information, smart homes, and personalized fashion.

No.5, we will advance new urbanization by taking measures to ensure that urban residency is granted to more people with rural household registration, and to promote the steady and healthy development of the real estate market and the government-subsidized housing in urban areas.

Ladies and gentlemen,

In the next five years, China will spend more than 10 trillion US dollars on imports and more than 600 billion US dollars on foreign investments, and carry out hundreds of major projects. The transformation and upgrading of China’s economy provides great opportunities for the whole world including Canada. China and Canada should make concerted efforts to foster new momentum and new vision for our respective economic development and bilateral cooperation. Here I would like to mention three areas where we could work together.

Firstly, to initiate the negotiation on the bilateral free trade agreement as early as possible, so as to enhance our economic and trade relations.

Over the past few years, the overall China-Canada relationship has maintained a good momentum of development. However, the bilateral trade volume is still disproportionate to the sizes of the two economies. There is still great potential to tap in the bilateral trade. Currently China has concluded free trade agreements with 22 countries and tariff territories, and the trade volume under those FTAs accounts for 38% of China’s total foreign trade volume. Next, China will speed up the efforts of building a network of high standard free trade zones by advancing the negotiations of China-Japan-Korea FTA, China-Gulf Cooperation Council FTA, the Asia-Pacific Free Trade Area and Regional Comprehensive Economic Partnership. Just yesterday, China and Israel announced their decisions to start the FTA talks between them. It is expected the bilateral trade volume will be doubled after the agreement is concluded. In this case, if the China-Canada free trade talks drag on, the trade diversion effect of these FTAs will gradually marginalize Canada’s export to China. Therefore the two governments should look at this issue from a strategic perspective and initiate the FTA negotiation at an early stage. This win-win action will bring tangible benefits for our two peoples.

Secondly, Canada is welcome to join the Asia Infrastructure Investment Bank and take part in the Belt and Road Initiative.

This Initiative is a response to the need for development and cooperation among the Asian and European countries, and it shows that China is in a rapid transition from a mere participant in international system to a provider of public goods. In 2015, China released the Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road and signed cooperation agreements with over 20 countries along the routes. The Asian Infrastructure Investment Bank was inaugurated. The Silk Road Fund went into operation. A number of major mutually beneficial cooperation projects were launched. Direct investment by Chinese companies in the countries along the route exceeded 15 billion US dollars. The Belt and Road Initiative achieved important early harvests, providing strong impetus to the development and revitalization of countries along the routes.

Geographically, Canada is not located along the route, but Canada enjoys great potential in the cooperation with relevant countries in areas such as infrastructure construction and contracting, project financing, and public and private partnership (PPP). Thus Canada is welcome to join the AIIB, to make good use of its expertise in infrastructure investment and investment risk management, and participate in the Belt and Road Initiative in the principle of joint consultation, joint construction and sharing.

Thirdly, we should work hand in hand to make the upcoming G20 summit a great success and further improve the international economic governance.

In September this year, China will host the G20 summit in Hangzhou. China will explore new ways to boost the world economy, and work together with other members to offer a new blueprint on innovative growth, so as to unlock new driving force for the global growth through new industrial revolution, digital economy and other new elements. We will strive to further facilitate the trade and investment cooperation to make the two engines of growth run stronger. We will formulate the action plan for the implementation of the UN’s 2030 Sustainable Development Agenda, attach more importance to development issue in the process of macro policy coordination, and lead the way in realizing the common development of all countries. Canada is an important member of G20. China is ready to enhance the communication and coordination with Canada to prepare for the Hangzhou Summit, and make concerted efforts to achieve positive results. We are looking forward to Prime Minister Trudeau’s attendance of the Summit.

Ladies and gentlemen, as the Chinese saying goes, the whole year’s work depends on the good start at the time of the Spring. While Spring is approaching, I hope China and Canada can seize the opportunities, and jointly push our bilateral relationship to a new high.

Finally, I wish today’s event a complete success, and I am looking forward to Minister Freeland’s valuable insight on the bilateral trade relations between China and Canada. Thank you!

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