Address at the Opening Ceremony of the Annual Meeting of the New Champions 2019
H.E. Li Keqiang, Premier of the State Council of the People’s Republic of China
Dalian, 2 July 2019
Professor Klaus Schwab,
Your Excellencies Heads of State and Government,
Ladies and Gentlemen,
It is a great pleasure for me to come back and meet with all of you in this beautiful city of Dalian. On behalf of the Chinese government, I would like to offer warm congratulations on the opening of the 13th Annual Meeting of the New Champions. My sincere welcome goes to all distinguished guests and journalists who have come all the way to join this event.
In the current international context, the focus of this year’s Annual Meeting on globalization issues is highly relevant. In his important remarks at the G20 Osaka Summit held last week, President Xi Jinping further elaborated on China’s position and propositions on economic globalization and reaffirmed China’s readiness to work with the international community in steering economic globalization in the right direction.
There has been much discussion on economic globalization in the international arena in recent times. First and foremost, we need to recognize that economic globalization, which is a natural requirement and outcome of social productivity growth and scientific and technological progress, has broadened the markets for producers, offered more choices to consumers, and brought about more efficient allocation of resources and factors of production. It has enabled better international division of labor and more effective leveraging of countries’ comparative strengths, thus bolstering the sustained growth of the world economy for the past few decades. Overall this process has delivered benefits to all countries across the world.
The latest round of industrial revolution, born in the age of economic globalization, has closely knitted together global industrial, innovation and value chains thanks to the ubiquitous, networked platforms. This has not only injected fresh impetus into world economic development, but also lowered the threshold for access, presenting unprecedented opportunities for equal and convenient participation and vigorously enhancing inclusive growth.
We now live in a world of profound economic interdependence. Countries rely on each other’s markets. No country can single-handedly provide all the resources and factors of innovation for producers, or offer all the needed goods and services to consumers. Nor can any country sustain its development in isolation from the global system of division of labor. Having said that, we need to acknowledge the lack of inclusiveness that has arisen in the course of economic globalization, such as inequality in opportunity, uneven benefit distribution and shocks to traditional industries and employment. For these issues, we need to make comprehensive and in-depth analyses to find out the root causes and address them with targeted solutions. A problematic tendency we see right now is to simplistically make a scapegoat of economic globalization, which instead of helping matters in any way, will only undercut the foundation of world economic and trade growth.
It is crucial that countries remain committed to the general direction of economic globalization, and advance trade and investment liberalization and facilitation. At the same time, we need to improve institutional arrangements to promote equal rights, equal opportunities, and fair rules for all, so as to better adapt to and guide economic globalization in the direction of mutually beneficial, balanced and inclusive development. At the national level, countries need to pursue inclusive growth by improving the income distribution system, and deliver the benefits of growth more widely in their societies. The international community needs to increase assistance to the less developed countries, and support their deeper integration into the global industrial, innovation and value chains, so that they can grow their economy, create more jobs, and improve their people’s well-being.
Risks facing the world economy have increased to a certain extent, from a slow-down in international trade and investment, intensified negative impact of protectionism, to greater uncertainties and destabilizing factors. In response, various countries have taken proactive measures, such as cutting interest rates or signaling more accommodative policies. Human society makes progress by drawing on past experience and lessons. Years ago, we jointly tackled the international financial crisis by coordinating our policies and achieved notable results. We should earnestly learn from and carry on this experience. At the same time, the medium- and long-term effects of the quantitative easing and excessive money supply adopted in the wake of the crisis should be evaluated, and the pros and cons of such policies should be weighed carefully.
In the face of the downward trends in the world economy, countries need to renew the spirit of partnership as we are all passengers in the same boat. We need to maintain equal consultations, seek common ground while shelving or managing our differences, and forge synergies. The rules-based, WTO-centered multilateral trading system is the bedrock of economic globalization and free trade, and an important underpinning for steady global growth. Its authority and efficacy should be respected and safeguarded. China supports necessary reforms of the WTO. Nevertheless, its fundamental principles such as free trade should be upheld, and the WTO should not waver in fulfilling its mission of opening markets and promoting development and in moving in the important direction of narrowing the development gap and North-South divide.
The Belt and Road Initiative proposed by China aims to promote inclusive development by encouraging the integration of more countries and regions into economic globalization. It has created new opportunities for countries and businesses around the world. We welcome the active participation of all parties in order to achieve interconnected and win-win development through mutually beneficial cooperation.
Ladies and Gentlemen,
In the past 40-plus years of reform and opening-up, China has shared opportunities and benefits with other countries through opening-up and actively integrated itself into the international division of labor and the global industrial, innovation and value chains. In this process, we endured huge pressure, paid high prices, and experienced a lot of pain. But we saw economic globalization as an irreversible trend and never lost sight of the general direction of integrating into the world economy. We stood firm in the face of all difficulties and our efforts finally paid off: China has not only achieved its own development, but also brought benefits to the whole world.
The past four decades and more saw China open itself ever wider to the world and fully honor its commitments. China fulfilled all its WTO accession commitments regarding tariff reduction as early as in 2010, lowering its overall tariff level from 15.3 percent before accession to 9.8 percent. On top of that, China’s repeated voluntary moves to cut tariffs in recent years have brought its overall tariff level further down to the current 7.5 percent. According to WTO figures, China’s trade-weighted average tariffs stand at 5.2 percent, lower than most other developing countries and higher than the average level of developed countries by less than 3 percentage points.
We have opened up our markets further by rolling out nationwide the management system of pre-establishment national treatment plus a negative list. China’s manufacturing sector has been basically opened up; restrictions on access to the modern services sector are being reduced; the opening of the financial sector has notably accelerated, leading to a visibly higher level of openness. China is also working to improve its laws to better protect intellectual property rights and step up law enforcement in this area. In 2018, China paid more than US$30 billion in royalties for foreign patents and technologies, a nearly fourfold increase compared with 10 years ago. The amount of paid-in foreign investment in China continued to grow last year, bucking the trend of shrinking FDI worldwide.
Going forward, no matter how the international situation may evolve, China will remain firmly committed to all-round opening-up and building an open economy of a higher standard. We will advance the opening-up of the manufacturing sector by following through on the commitment to ease foreign equity restrictions such as in the auto industry, encouraging foreign investment in high-quality manufacturing, and supporting foreign businesses in investing in advanced manufacturing such as electronics and information technology, equipment manufacturing, pharmaceuticals and new materials and in central and western China. Foreign businesses making such investments will be eligible for preferential treatment in terms of import of self-use equipment, corporate income tax and land use.
The financial and other modern services sectors will also be further opened up. We will move up the lifting of foreign ownership caps in securities, futures and life insurance from 2021 to 2020. Restrictions on foreign investment in value-added telecommunication services and transportation will be reduced, and foreign-funded institutions will receive national treatment in credit investigation, credit rating and payment. Two-way opening of the bond market will be expanded. The reform of the exchange rate mechanism and the convertibility of the RMB under the capital account will be taken forward in a steady manner. The RMB exchange rate will remain generally stable at an adaptive and equilibrium level. China will not engage in competitive devaluation. We will continue to lower overall tariffs voluntarily, remove non-tariff barriers, actively increase the import of goods and services, and enhance import facilitation.
We will further improve laws and regulations concerning opening-up and expedite the drafting of supporting rules and regulations for the Foreign Investment Law, which is expected to be finished by the end of this year and enter into force along with the Foreign Investment Law on 1 January 2020. In the meantime, we will move faster to overhaul laws, regulations and normative documents that are incompatible with the Foreign Investment Law, and will eliminate all remaining restrictions outside the negative lists for the access of foreign investment by the end of this year. We will strengthen IPR protection and introduce a punitive compensation mechanism to crack down hard on all kinds of infringements and counterfeiting. Efforts in all the above areas will make China even more open, transparent and predictable for foreign investment and improve the overall investment environment in this country. The world economy stands to benefit from a more open China.