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Speech By Consul General Xue Bing on CCBC Luncheon

Ladies and gentlemen,

I am so delighted to be here this afternoon at this luncheon. I'd like to take this opportunity to thank the Canada China Business Council (CCBC) for its kind invitation and warm hospitality. Over the past decades, the CCBC has been working hard to promote the mutual understanding and friendship, in particular the bilateral trade relations between China and Canada and that has brought tangible results for both sides, for which I'd like to express my sincere gratitude to the CCBC.


China has enjoyed a long history of friendship with Canada. Over a hundred years ago, the first group of Chinese came to this country to build the Pacific Railway across the continent of Canada. During the Second World War, China and Canada fought side by side against the common enemies. The heroic deeds of Dr. Norman Bethune will always be remembered and cherished by the Chinese people.

In the early 1960s, Canada became the first Western country to trade with China by exporting wheat to China, which was embargoed by the West and its people were suffering from severe famine. Such trade relations finally lead to the eventual establishment of diplomatic ties between China and Canada in 1970.

Thanks to the personal commitment of leaders of several generations and concerted efforts of peoples from various sectors of both countries, our exchanges and cooperation in all fields have been growing steadily in the past 45 years. Bilateral trade has grown from 150 million US dollars in the early days of 1970s to 55.2 billion US dollars last year. The foreign direct investment stock between our two countries has exceeded 58 billion US dollars by the year of 2014.

In October 2014, the China Canada Foreign Investment Protection Agreement (FIPA) officially took effect, symbolizing a major step forward in our economic and trade relations. In March this year, the first Renminbi offshore trading center in the western hemisphere was officially launched here in Toronto, which marked the beginning of a new chapter in China Canada financial cooperation.

Meanwhile, bilateral cultural and people-to-people exchanges and contacts have been developing fast. And now more than 100,000 Chinese students are studying in Canada. Last year, more than 400,000 Chinese tourists coming this way and over 600,000 Canadian people traveled to China. The two giant pandas "Da mao" and "Er shun" have been happily living together here for the past two years. They brought with them warm greetings from China and of course lots of joys to the local people, especially to the young children.

Ladies and gentlemen,

After more than thirty years of fast development, China has come to a stage of "new normal", where its economy has been increasingly driven by innovation instead of input and investment, it has shifted gear from the previous high speed to a medium-to-high speed growth, with its structure being constantly improved and upgraded. The third industry has become the biggest contributor to the GDP growth; the income difference between urban and rural area is being gradually reduced and the GDP per capita is on the rise; more and more citizens are benefiting from the economic development. In 2014, China's economy grew by 7.4%, largely driven by domestic consumption. The quality and efficiency of the economic development is being constantly improved while the service sector is growing in a faster way. When looking at China's economy, one should not focus on its growth rate only. It must be noted that the economy has developed to such a level that even just 7% of growth means a huge volume of absolute increase, which could not have been achieved with two-digit growth rate in the past.

China is a huge economy with great potential and flexibility, it will bring considerable cooperation and growth opportunities for the rest of the world in terms of trade and investment. In the coming five years, China's import will reach more than ten trillion US dollars, its investment abroad will reach 500 billion US dollars and the number of its outbound tourists may well exceed 500 million.

As a huge economy, the more China grows, the more development opportunities it will create for the rest of Asia and the world. I will provide two examples to confirm my viewpoint. The first example is the "one belt and one road" program, initiated by the new leadership of China as an important regional cooperation platform. The "one belt" refers to the Silk Economic Road Belt, which enrolls important cities on the line to form an international channel and relies on economic and trade industrial zones to provide cooperation platforms for relevant countries on the line, and finally builds up a new Asia-Europe bridge to facilitate international economic cooperation. The "one road" refers to the 21st Century Maritime Silk Road, which relies on important ports on the line to set-up a reliable and efficient maritime transportation channel.

The purpose of the "one belt and one road" is to promote an orderly and free movement of economic factors, to facilitate efficient allocation of resources, to enhance market integration, to encourage relevant countries on the line to collaborate on economic policies and realize a larger scoped, higher leveled and further deepened regional cooperation, and finally build up a regional economic cooperation framework that is open, comprehensive, balanced and universally beneficial. It is estimated that the "one belt and one road" will cover 26 countries and 4.4 billion populations, and bring about twenty-one trillion US dollars of economic outcomes.

Here, I'd like to remind that the "one belt and one road"is an open and comprehensive program rather than a closed one. It encourages the principles of mutual consulting, joint constructing and universal benefitting. It is a chorus of relevant countries on the line rather than a solo played by China only. Its purpose is not to replace the existing regional cooperation frameworks, but to facilitate relevant countries to realize strategic collaboration and create a win-win situation.Canada is also welcomed to join this program and seek mutually beneficial cooperation.

The second example is the Asian Infrastructure Investment Bank. To deal with the financing deficit of Asian infrastructure development, in 2013, the Chinese government came up with the proposal to set up the Asian Infrastructure Investment Bank (short for AIIB).

According to study released by the Asian Development Bank, a total volume of 8,220 billion US dollars is needed for the Asian infrastructure development in the coming decade. That is to say, 820 billion US dollars will be invested for each year. After coming up with the proposal of setting up AIIB, China has received support from many countries and international organizations. By the end of April this year, 57 countries and economies had joined AIIB as founding members.

AIIB creates a fresh global financial solution. It is a new and open cooperation framework with no threshold and preconditions. It does not go against any third party and is open to Asian economies as well as the rest of the world. The establishment of AIIB will provide a financial pool for infrastructure development, strengthen global economic growth engines, improve capital efficiency for both Asia and Europe, and bring about a comprehensive regional cooperation. AIIB is based in Asia but open to the whole world. It will help with any infrastructure investment fund in the worldwide scale. North American countries including Canada are also welcomed to join AIIB and play a positive role in it.

Ladies and gentlemen,

The world is undergoing major changes. We need to look at our bilateral relations from a new perspective so as to keep pace with the changing world. China and Canada have no fundamental conflicts of interests. On the contrary, we enjoy good cooperation and share extensive mutual benefits, which served as a solid foundation for an enhanced strategic partnership. To this end, I put forward the following observations:

Firstly, with a view to further facilitating bilateral economic cooperation, we should initiate negotiations on the Free Trade Agreement as early as we can.

The past few years have witnessed the sound development of bilateral relations, including several milestone events, such as the ratification of "Investment Promotion and Protection Agreement" and the establishment of Renminbi offshore trading center in Toronto. It is the right time to start the FTA negotiations between China and Canada. By the end of last year, China has been negotiating or concluded nineteen free trade agreements with thirty two countries and tariff territories. In particular, last year China successfully concluded the bilateral FTA negotiations with Australia and Korea respectively. The "trade diversion effect" caused by the already-existing FTAs will certainly marginalize Canada's export to China both in goods and services if China-Canada Free trade talks drag on. It is necessary for us to speed up the bilateral FTA feasibility study and initiate FTA negotiations as soon as possible. Business people of both countries should urge their respective governments to get this message acrossed.

Secondly, to construct large industrial projects to consilidate the foundation of our relations.

We have many successful cooperation in building large projects. The third phase of Qingshan Nuclear Power Generation, built in 1990s with investment of nearly 3 billion US dollars, is the largest China-Canada cooperation project in history and held the record of "newest technology", "lowest cost" and "shortest building period" in similar projects in the world when completed. China's cooperation with Bombardier dates back to 1950s and you now can easily spot a train or an aircraft with Bombardier logo in China. Meanwhile, with more than thirty years of rapid development, Chinese companies have accumulated many experiences and advantages in terms of capital, technology and management in high speed train, nuclear power generation, mining development and excavation, and some manufacture sectors. This provides great potentials in building more large projects between China and Canada. Since last year, Chinese companies have come here to Toronto to look for opportunities to enter into cooperation with Ontario government in building a high speed railway line connecting the cities of Toronto and Windsor, and also in the development of Ring of Fire in northern Ontario. I hope our friends in the CCBC can make a good use of your network and contacts to push forward our cooperation on large projects so as to provide new impetus to our bilateral relations.

Thirdly, to give a full play to the market potentials to expand our trade volume.

The last few years saw a rapid development in our trade cooperation, however, the China-Canada trade volume only accounts for 1.6% and 7.5% in their overall trade respectively in 2014. The bilateral trade volume is disproportionate to the two countries' overall trade and economy sizes. The prospects on trade expansion are still very large. Entrepreneurs from both countries should get to know more of the demand from each other's market and increase the trade in minerals, lumber, agriculture products, machinery and etc. The functions of the Renminbi trading center in Toronto should be fully utilized and we encourage enterprises from both countries to use more Renminbi currency in trade finance and settlement, because that will help to save transaction cost, mitigate foreign exchange risk, and better price the products. In addition, we should expedite the development of oil and gas pipelines and export terminals in the western part of Canada and build a maritime energy corridor linking the two countries at an early date.

Fourthly, to seize opportunities to increase the bilateral investment.

In 2014, both the inbound and outbound investment of China exceeded 100 billion US dollars for the first time in history. Now, China is carrying out industrialization in a new way, and advancing IT application, urbanization and agricultural modernization. Meanwhile, China is under a new round of financial reform and will gradually set the interest rates by market and realize the full convertibility of Renminbi currency in the capital account. With the streamline and simplification of outbound investment review procedure, more and more Chinese private companies and individuals will come here for investment. Business in Canada should seize the golden opportunities of China's rapid development and I think the Canadian investors will face many opportunities in the area of construction, building materials, distribution, banking, insurance, energy, environment protection and infrastructure services.

Ladies and gentlemen,

This year marks the 45th anniversary of the establishment of diplomatic relations between China and Canada. I am so proud of what we have achieved in the past four decades and more. My office here in Toronto and me myself are ready to continue to work closely with our friends from the CCBC to promote our cooperation to a new high, and to create an even better future for our relations. I am fully confident that with your support we can certainly achieve our goals.

Thank you !

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