Chairman Constantin Cotzias,
Economic Secretary John Glen,
Ladies and Gentlemen:
It is a real delight to join you again at Bloomberg.
The Bloomberg Forum on "Navigate the New Silk Road" could not have been more timely, as countries of the world explore ways to tackle the rising risks, instabilities and uncertainties in the world economy. In my opinion, what the world economy needs most now is "confidence".
Today, I would like to explain what China is doing to boost confidence and promote common progress by answering the following three questions.
The first question is: In face of rising unilateralism and protectionism, should countries of the world choose openness or isolation?
China's answer is clear: We remain committed to further opening up. This commitment boosts confidence in robust economic growth.
First, China has demonstrated firm resolve to open its door wider to the world.
Opening up is a basic national policy of China. It is not expediency, but a natural choice. It is for the purpose of realising high-quality economic growth, and it is in line with the trend of globalisation.
At the G20 Summit in Osaka last month, President Xi announced five important measures, namely:
· Open up the Chinese market wider.
· Expand imports.
· Improve the business environment.
· Equal treatment for all foreign investment.
· Advance trade talks.
These concrete measures reaffirm China's resolve and courage in opening its door wider to the world. It is met with enthusiastic response from the international community.
Second, China has taken firm steps to open its door wider to the world.
When a certain big Western country insisted on putting itself first and adopted bullying trade policies, the global industrial landscape and trade situation came under severe stress.
China has not succumbed to outside pressures. Nor will it stop the steps of opening up. China will continue to advance the Belt and Road Initiative as the master plan for its opening up. And in this process, China will strive to make sure that more countries and people will benefit from BRI.
At the first Belt and Road Forum for International Cooperation two years ago, 279 outcomes covering five areas were reached and all have been implemented. Last April, the second Forum was successfully held, where 283 outcomes covering six areas were reached, and more than 65 billion dollars of deals on cooperation projects were signed. The second Forum marked the beginning of a new stage for high-quality BRI development.
Third, China has kept up the momentum of opening up wider to the world.
Economic globalisation is an irreversible trend. Greater integration into the world economy is the major direction that cannot be changed. Therefore, no matter how many difficulties or setbacks China encounters, it will not waver in opening its door wider to the world.
As we speak, China's manufacturing sector is basically open. It is gradually lifting restrictions on access to the modern services sector. And it is opening up the financial sector with accelerated pace and at a higher level. Going forward, China will continue to quicken its steps to increase market access for foreign investment. Take for example foreign ownership caps in joint venture firms in sectors such as securities, future and life insurance. China has brought forward the deadline for lifting the caps from 2021 to 2020. At the same time, China has also cut short the 2019 edition of the negative list on foreign investment, reducing the 48 items on the list to 40.
In 2018, China paid more than 30 billion dollars in patent fees and royalties to overseas license holders or rights owners. That's nearly four times more than ten years ago. Going forward, China will take further steps to foster an open, transparent and fair business environment. These steps include
· strengthening IPR protection,
· striving to complete the supporting regulations of the Foreign Investment Law by the end of this year,
· and continuing to improve the legal system for opening up.
In recent years, China has taken the initiative to cut tariffs many times. Its trade-weighted average tariff only stands at 5.2%. This is lower than the majority of the developing countries, and close to the average level of developed countries. Going forward, China will continue to take the initiative to cut overall tariffs and expand imports. Later this year, China will host the second China International Import Expo. This will be an opportunity to share China's market with more countries.
Now let me turn to the second question: Despite deepening economic globalisation, development gaps between different countries still exist. What can China do to continue serving as a growth engine for the world while pursuing development at home?
Again, China's answer to this question is clear: We remain committed to win-win cooperation. This commitment will boost the confidence in the inclusive and balanced economic growth in the world.
Take the international financial cooperation for example.
Driven by big data, blockchain and other new technologies, FinTech, inclusive finance and green finance are developing rapidly. This has brought new opportunities and new challenges to the international financial market.
Against this backdrop, financial cooperation between our two countries, one with newly-acquired financial strength and the other with traditional financial power, will create enormous opportunities for investors from both countries and the world as a whole.
First, there is the opportunity for investment.
On April 1st this year, Chinese bonds were included in the Bloomberg Barclays Global Aggregate Index. I think this is an important success of the ever more open Chinese bond market. It shows China's growing role in the global financial market. It also reflects the confidence of global investors in the Chinese market.
Last month, the tenth China-UK Economic and Financial Dialogue was successfully held in London. Of the 69 outcomes reached at the EFD, the Shanghai-London Stock Connect is a highlight. Its official launch marks the realisation of real connectivity between China and the UK as the world's second and third largest capital market respectively. It also expands the channel for two-way, cross-border investment and financing between China and the UK.
China and the UK will continue to conduct feasibility studies on the arrangement for connectivity between the bond markets, so as to create more opportunities for investors from both our two countries and the world.
Second, there is the opportunity for green development.
In 2018, China issued over 30 billion dollars of green bond, achieving 33% increase year-on-year. Last week, the UK hosted the third Green Finance Summit. At the summit, Economic Secretary Glen announced the Green Finance Strategy.
In fact, China and the UK have been major partners in green finance. In June 2018, the London Branch of the Industrial and Commercial Bank of China issued green bond worth 1.58 billion dollars. This was the largest ever green bond listing on the London Stock Exchange.
China and the UK have also set up the Green Finance Taskforce, launched the Green Finance Centre, and issued the Green Investment Principles for Belt and Road Development.
Our two countries welcome the collaboration between Chinese and UK financial institutions on the issuance of offshore green asset-backed securities in the UK and other markets. Both sides will create investment platforms driven by the private sector to support and invest in UK green technology firms to scale-up in new markets, including China. We will also do more and try to take up the lead in product innovation, standard setting, risk supervision and management in green finance.
Third, there is the opportunity of making the best use of platforms.
The City of London is a leading global financial centre, and an important partner of China in financial services.
First of all, London is the world's largest offshore RMB market. By last February, a total of 113 RMB-denominated bonds had been listed on the London Stock Exchange. The total value is more than 30 billion RMB yuan.
Second, many Chinese banks have made London their home. Last month, I attended the opening ceremony of China CITIC Bank London Branch. It was the eighth Chinese bank to set up a branch in London. This was not only a new milestone in the efforts of Chinese banks to explore the global market, but also a "vote of confidence" for the future of the City of London.
I am confident that going forward, the City of London will continue to serve as an important platform for RMB internationalisation, for sub-national financial cooperation between China and the UK, and for the two countries' cooperation in third markets.
Now let me turn to the third question of my speech. It is about the China-US relations and trade talks, which has caught the world's attention. How can the two countries avoid the "Thucydides trap" and a "trade war" that could do so much harm to the world economy?
Once again, China's answer to this question is clear: We remain committed to dialogue and consultation. This commitment will boost confidence in the ability of the world economy to remain stable.
China has been committed to addressing trade frictions through dialogue and consultation. Not long ago, the Chinese and US Presidents met during the G20 Summit in Osaka. The two sides agreed to restart the trade talks on the basis of equality and mutual respect.
The UK business community has followed the event closely and is eager to know whether the agreement will be delivered. And British media kept sounding me out about the prospect of China-US trade talks.
I do not have a crystal ball, but I think the following four points are very important for the future of China-US relations:
First, China and the US should have a right understanding of each other's goal.
Forty years of China-US diplomatic relationship show that the two countries stand to gain from cooperation, and lose from confrontation. Therefore, it is important the two sides see each other as a partner rather than a rival.
For China, the ultimate goal of development is to meet the aspiration of the Chinese people for a better life. It is not China's goal to challenge or replace anyone. China will not go down the beaten path of Western powers and let its development lead to hegemony. Instead, China will remain committed to the path of peaceful development.
Second, China and the US should view their competition in a sensible manner.
In an age of economic globalisation, both cooperation and competition are part of a normal relationship between countries. With a broad mind and a broad horizon, it would not be hard to see that the world is big enough for all countries to achieve common development and prosperity.
If we over-exaggerate competition, we could run the risk of missing the opportunities. The right thing to do is to renounce the zero-sum mentality of "you lose, I win". Only by doing so can we engage in healthy competition and at the same time deepen cooperation for win-win results.
Third, China and the US should shoulder due responsibilities as big countries.
Big countries have big responsibilities for regional and world peace and development, but not big power to be bossy.
By safeguarding its legitimate interests in trade talks, China has shouldered its responsibility for global economy and trade. We call on other countries, especially big countries, to act in a responsible manner, head towards the same direction and uphold the rule-based multilateral trade system.
Fourth, China and the US should join hands to safeguard the common interests of the world.
A peaceful and stable international environment serves the common interests of China, of the US and of the international community. No one can stay aloof from this "trade war".
Investors are easy victim of unilateralism, protectionism and bullying trade policies. The business community should not be the "silent majority". I hope you will stand up in support of open and free trade, uphold the multilateral trade order, and promote economic and financial cooperation. I hope you will take concrete action to put confidence and positive energy back into the world economic growth.
Ladies and Gentlemen:
As a saying goes,
"If you want to go fast, walk alone;
If you want to go farther, walk together. "
China will develop better in a better world; and the world will be a better place with a better China.
China stands ready to share its development opportunities through further opening up. China will pursue common development through consultation. China will promote win-win results through better cooperation. China will work hard to bring back confidence in the world economy.
I hope the business leaders of our two countries will carry forward the spirit of openness, cooperation, consultation and partnership. In that spirit, I hope and believe you will work together to overcome all difficulties and build a better future for our world!
In conclusion, I wish this Forum success!