Distinguished Senate Speaker Eduardo Frei Ruiz-Tagle
Ladies and gentlemen, friends:
Good morning!
It is a great pleasure to meet with our old and new friends in the beautiful city of San Diego. Over the years our friends in the business communities have made great contributions to the development of China-Chile economic and trade relations. Here I would like to extend warm congratulations on the success of the forum, sincere greetings to our friends present at the meeting and heart-felt thanks to the organizers of the forum for their hard work.
This is my first visit to Chile. Standing on this splendid land and looking far into the distance, I am impressed by the Mountain Andes extending endlessly on the one side and the Pacific Ocean stretching to the horizon on the other side. It is the high mountain that forges the unyielding spirit and it is the vast ocean that nurtures the generosity of the Chilean people. With the relentless efforts of the industrious and intelligent Chilean people, today the comprehensive competitiveness, economic liberalization, market openness and international credit rating of Chile all rank among the best among Latin American countries. The Chinese people are deeply glad to see the achievements of the Chilean people and sincerely wish the Republic of Chile prosperous and the Chilean people happy.
Ladies and gentlemen, friends:
The sustainable and rapid economic growth of China, the largest developing country in the world, draws attention from all around the world, including an increasing number of Chilean friends. I would like to take this opportunity to briefly introduce China's economic and social progress to all of you.
China is one of the ancient civilizations in the world. In the more than 5,000 years of history of development, all the ethnic groups of the Chinese people have created splendid cultures and made remarkable contributions to the progress of human civilizations. After 1840 China once suffered from invasion of the imperialist powers and plunged into a semi-colonial and semi-feudal society. The Chinese people fought fearlessly for the national independence, liberation of the people, democracy and freedom. Under the leadership of the Communist Party of China, the Chinese people founded the People's Republic of China in 1949, realizing the greatest and most fundamental social evolution in the Chinese history and opening the broad way for the great rejuvenation of the Chinese nation.
At the end of the 1970s, China started implementing the policy of reform and opening up initiated by Mr. Deng Xiaoping and stepped on the path of building socialism with Chinese characteristics. Over the past 28 years earthshaking changes have taken place in China. The key is three adherences.
First, adherence to economic construction. Economic construction is an overriding task of China. China is a developing country and development is the key to solving all of China's problems. We are determined to eliminate all interferences, insist on economic construction unswervingly to seek development. From 1978 to 2005, China's GDP increased from US$216.5 billion to US$2.23 trillion, with an average annual growth rate of 9.6%, per capital GDP rose from US$226 to more than US$1,700, up by almost 7 folds and grain output grew from 300 million tons to 480 million tons, successfully solving the problem of feeding a population accounting for almost 20% of the world's total. At the beginning of the 1990s China almost had no expressway, but now the total mileage of expressways open to traffic has reached 41,000 kilometers, ranking the second longest in the world. In 2005, China's port cargo throughput stood at 4.9 billion tons and international container throughput 75.80 million of twenty-feet equivalent unit (TEU), both being the largest in the world. In China, the average annual income of urban and rural residents have increased by 5.1 and 5.2 folds respectively and the per capita housing areas of urban and rural residents respective rose from 6.7 to 25 square meters and 8.1 to 29.7 square meters. Automobile has entered ordinary Chinese families. In 2005 car sales in China reached 3.13 million. China's life expectancy rose from 35 prior to 1949 to 72 years old, exceeding the average level of middle-income countries. Nine-year compulsory education is basically popularized and illiteracy among young and middle-aged people is eliminated in China. China's rural poor population dropped from 250 million in 1978 to 23.65 million in 2005. Now the Chinese people generally enjoy a well-off life.
Second, adherence to the political development road with Chinese characteristics. The political development road with Chinese characteristics is the basic guarantee for the long-term stability of China. The political system of a country can only be decided by the people of the country according to its basic national conditions. In line with China's national conditions, the Chinese people have chosen their own political development road. In terms of the political system, China adopts the National People's Congress (NPC) system. The NPC exercises the supreme state power and all the administrative, judicial and procuratorial organs of the state are created by the NPC for which they are held accountable and by which they are supervised. Such a system not only allows full democracy and injects dynamism into the national political life but also enables us to pool resources to solve major problems and raise working efficiency. In terms of political party system, China implements the system of multi-party cooperation and political consultation led by the Communist Party of China (CPC). The CPC holds the core leadership and is the ruling party. The democratic parties are neither out-parties nor opposition parties, but parties participating in the management of state affairs. Currently there are 8 democratic parties in China who have altogether 176,000 members serving as representatives in the people's congresses at different levels and 32,000 members serving as officials above the county level. On all the major policies concerning state affairs, the NPC makes full consultations with the democratic parties. As a large developing country with a population of 1.3 billion, China has maintained an average annual economic growth rate of 9.6%, achieved remarkable growth of the comprehensive national strength, brought increasing living standards to the people and enjoyed national solidarity, social stability and rising international position over the 28 years since the launch of reform and opening up, which fully demonstrates that the political development road independently chosen by the Chinese people complies with China's reality, the trend of the times and the will of the people and is beneficial to the national prosperity. We will unswervingly follow this road.
Third, adherence to reform and opening up. Reform and opening up is the engine for China's economic and social progress. We resolutely push forward the reform in the economic system, develop the socialist market economy and always take the reform of the state-owned enterprises as the core link, with focus on raising the independent innovation capacity, risk control capability and market competitiveness of those enterprises. The public ownership economy grew strongly. Meanwhile, we unswervingly encourage, support and guide the development of non-public economy. Today, the added value created by the non-public economy has made up one third of China's GDP. We faithfully transfer the functions of the government, give full play to the fundamental role of market in resource allocation and use more economic and legal ways to manage economic and social activities. In terms of social commodity retail, the proportion of government pricing has dropped from 100% prior to reform and opening up to less than 4% today. The capital, labor, land, property rights and technology markets in China developed from scratch and have been growing rapidly. China also makes fundamental reform in the planning, taxation, financial, and foreign trade systems. We are opening increasingly wide to the outside world and have developed an all-dimensional, multi-layered and wide-ranging opening pattern. In December 2001 China's accession to the World Trade Organization (WTO) marks a new stage of opening up. Over the past 28 years, China's total foreign trade volume increased from US$20.6 billion to US$1.42 trillion, up by more than 17% year-on-year and China has become the third largest trading country in the world. China's actually utilized foreign direct investment exceeded US$620 billion, ranking the first among developing countries for a row of 13 years. China's foreign exchange reserve increased from US$167 million in 1978 to over US$940 billion, the largest in the world. Most of the global top 500 companies have invested in China and some multinationals have moved their Asian and Pacific headquarters and R&D centers to China. More than 50 countries have recognized China's full market economy status and China's contribution to the world economic growth is more than 10% and to the global trade increase is over 12%.
China always adheres to the road of peaceful development. The Chinese civilization cherishes peace and advocates maintaining harmony while allowing for difference and that never do to others what you would not like them to do to you. The Chinese people once suffered from the humiliation imposed by imperialist forces and years of turbulence and wars and especially understand the value of peace. No matter how the international situation fluctuates, China will always follow the independent foreign policy of peace, pursue the diplomatic policy and purpose of maintaining world peace and promoting common development and be committed to establishing an open, fair, just and transparent international multi-trade system, pushing the economic globalization toward the direction of common prosperity and building the regional and international environment of peace, cooperation and harmony. Facts have and will continue to prove that China's development poses no threat to other countries in the world but creates more development opportunities and broader market. China was, is and will be the firm force for maintaining world peace and promoting common development.
Ladies and gentlemen, friends:
Talking about China-Chile relations, the Chinese people are most impressed by "four first". Chile is the first Latin American country to establish diplomatic relationship with China, to reach the bilateral agreement with China on China's accession to the WTO, to recognize China's full market economy status and to sign the bilateral free trade agreement with China. The "four first" is strong evidence that China and Chile are reliable friends and partners enjoying mutual benefit and win-win cooperation.
We are glad to see that in recent years with the joint efforts China-Chile relations enter a new period of rapid growth. Politically, the two countries enjoy frequent high-level exchanges and increasing political mutual trust. In 2001 President Jiang Zemin and President Lagos exchanged visits and jointly established the all-round partnership featuring long-term stability, equality and mutual benefit. During President Hu Jintao's visit to Chile in November 2004 the leaders of the two countries reached important consensus on establishing and developing the bilateral all-round partnership, declared the launch of the China-Chile free trade negotiations and signed a number of cooperation documents, which stimulated the development of bilateral relations. Economically, the bilateral economic and trade relations enjoy a sound momentum of development. In 2000, the bilateral trade volume was US$2 billion and in 2005 exceeded US$7 billion, up by 2.5 folds within 5 years. By the end of this June, Chile has invested in 98 projects in China, with a total contractual amount of US$125 million and real investment of US$52.59 million. China has invested in 21 businesses in Chile, with the agreed investment amount standing at US$2780 million. China has become the second largest trading partner of Chile. The bilateral cooperation in the fields of technology, health, sports and tourism keeps expanding and people-to-people exchanges grow increasingly active. The two countries keep close consultations and collaboration in the international and regional affairs. China-Chile friendly cooperation has brought about tangible benefits to the two countries and our people. The purpose of my visit is to raise the already existing friendly relations between China and Chile to a new level.
Ladies and gentlemen, friends:
Both China and Chile are developing countries and face the tasks of developing economy and improving people's living standards. To deepen China-Chile economic and trade cooperation is an important content of pushing forward the bilateral all-round partnership, which not only serves the fundamental interest of the two peoples but also promotes the regional and world peace and development. Next I would like to take the platform of the China-Chile Economic and Trade Cooperation Forum to talk about China-Chile economic and trade cooperation.
China and Chile share strong economic complementarities and enjoy promising prospects of economic and trade cooperation. The stable social environment, sustained and strong development momentum and broad market with huge potentials of China are providing increasing business opportunities and driving force for the economic development of Latin American countries including Chile. Chile has been well known as the "kingdom of copper". It is also the No.1 forest products exporter in Latin America and the No.5 fishery country in the world. Maintaining rapid economic growth over years, Chile is one of the Latin American countries with relatively developed economy. All these have created favorable opportunities for the two countries to conduct mutually beneficial cooperation. More importantly, both sides have a strong wish of strengthening mutually beneficial cooperation and raising cooperation quality and level. I believe that both sides should look at and develop the bilateral economic and trade cooperation from a strategic height, make use of our advantages in the principle of mutual benefit and win-win cooperation to expand cooperation areas, broaden cooperation ways, enrich cooperation contents and push the bilateral economic and trade cooperation to a new level.
To that end, I propose the following four suggestions:
First, implementing the free trade agreement and expanding bilateral trade. The free trade agreement signed between the two governments have incorporated all the articles concerning trade in goods and the core is to lower and cut tariff and non-tariff barriers and improve market access conditions. Its implementation will facilitate the bilateral trade in goods and stimulate the development of related industries in the two countries. The two sides should make full use of the favorable conditions created by the free trade agreement to improve the commodity trade structure, diversify the traded commodities, strengthen the exchange of information on market, products and trade, promote the goods of each other in the Asian and Latin American markets, broaden the bilateral trade and raise the bilateral economic and trade cooperation level.
Second, deepening cooperation on cooper resources and achieving mutual benefit and win-win outcome. The China-Chile cooperation on cooper resources is of strategic significance and plays a critical role in the bilateral economic and trade cooperation. Each year 50% of Chilean cooper is sold to China, accounting for almost half of the total bilateral trade volume. We are glad to see that in February this year China Minmetals Corporation, China Development Bank and Codelco signed the joint investment and financing agreement on developing the cooper resources in Chile and the total investment in the first phase is US$550 million. It is the first time for Chinese businesses to cooperate with the largest cooper company in the world on overseas resources development, opening a new chapter in China-Chile cooper resources cooperation. I hope that the two governments and related businesses make joint efforts to ensure the success of the project. In the future, both sides should further deepen the cooper resources cooperation from the strategic perspective of building a long-term stable partnership and achieve complementarities and mutual benefit. Active efforts should be made to explore the new ways of cooperation on cooper resources and develop new areas and projects of investment cooperation. It is necessary to strengthen policy dialogue and improve the coordination mechanism in a bid to push for the healthy and rapid progress of China-Chile cooper resources cooperation.
Third, expanding cooperation on infrastructure and nurturing new growth point of economic and trade cooperation. As developing countries, China and Chile still face the heavy task of infrastructure construction. With years of development, China has accumulated rich experiences and built strong merits in the infrastructure construction including transport and telecommunications. Last year alone, China's railway increased by more than 1,200 kilometers, road by 129,000 kilometers, expressway by more than 6,400 kilometers, throughput of 10000-ton berths by nearly 190 million tons and mobile phone subscribers by 86 million. With the rapid growth of the Chinese economy and the sustained development of the Chilean economy, the demands for infrastructure in the two countries are on the rise and the two countries enjoy increasing mutual interest, which presents unprecedented prospects for bilateral cooperation and will become a new growth point of China-Chile economic and trade relations. Both sides should seize this valuable opportunity to reinforce mutual understanding, tap cooperation potentials, innovate the cooperative model, encourage mutual investment and raise the level of bilateral cooperation in the field of infrastructure.
Fourth, pushing forward business cooperation and make businesses the major players of economic and trade cooperation. Businesses are the major forces of market and investment and the main players of bilateral economic and trade cooperation. Only with their participation can the bilateral economic and trade cooperation grow big and strong. At present, the economic and trade cooperation model between China and Chile is rather simple, trade in primary products and goods with low technological content holds a large proportion in bilateral trade cooperation, mutual investment and business cooperation are rather weak and there lacks the support of large projects. To raise the quality and level of bilateral economic and trade cooperation, the key is to allow businesses to play a major role in the cooperation and promote the cooperation of businesses of the two countries, especially the cooperation on a number of large projects. Both sides should seize the new opportunities created by the rapid economic growth of the two countries, take strengthening business cooperation as the priority of bilateral economic and trade cooperation, expand direct two-way investment and extend the bilateral economic and trade from trade in goods to investment, industrial and technological cooperation. The Chinese government encourages the competitive and reputable big companies to do business in Chile and also welcomes the Chilean companies to invest in China.
Ladies and gentlemen, friends:
The all-round partnership between China and Chile has entered a new period of rapid development. China-Chile economic and trade cooperation enjoys unprecedented opportunities and promising prospects. Let's work together to raise the bilateral economic and trade cooperation to a new level and write a new chapter in China-Chile relations.
In conclusion, I wish the forum a complete success!
Thank you.