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China & Sweden: Questions & Answers

China & Sweden: Questions & Answers

-- Speech at the China Summit for Dagens Industri

by H.E. Mr. Chen Yuming, the Ambassador of China to Sweden

October 20th,2015

Respected Chair,

Dear Friends,

I am very glad to congratulate the opening of the new China Summit of Dagens Industri. At the last Summit, the discussions and conversations among attendees improved mutual understanding, and managed to uncover a number of potential areas to cooperate to make great contributions to the new space of the collaboration of China-Sweden business and trade. I believe that this year’s conference will turn out to be even more successful.

Looking around the globe, people keep asking, what is it with the world today? A colleague from the Middle-East has told me in a heavy tone that his homeland region is in a mess right now. It seems that peace and development are still the two most significant topics that receive the world’s attention. Regarding the topic of the world, what I would like to say is that temporary solutions are not adequate to solve the various global challenges, including the European refugee crisis at the moment. In order to find the solutions to the essence of issues, we ought to extinguish the root cause of conflicts and to seek peace and to achieve development. To achieve this does not depend on putting out “beautiful” political models and ideologies. Instead, common people from every country should be allowed ‘to choose the shoes that best fit their own feet.

The world’s development lies in answering questions raised, and that is the value of DI China Summit. The speech I am going to deliver today uses the format of Questions & Answers. People who care about China are also asking, How is it with China today? Their unprecedented look of concern puts a great deal of pressure upon me. What I would like to say is that while the global economy is adjusting and is confronted with continuous challenges, Chinese economy still maintains stability. An ancient Chinese poem can be quoted to describe the situation – With the voices of apes echoing between the two banks, the boat is drifting past the endless mountains.

The press wonder whether China is “exporting its crisis”. I would like to say that the operation of the Chinese economy is scientific and reasonable. Thanks to the efficient adjustment and controls that China implements, the economic development goes in a good direction and the quality of development has been raised to a new level. In the first half of the year, the Chinese economy increased by 7%, firmly at the top of international rankings. It is definitely not easy to keep this growth rate with an economic aggregate of 10 trillion USD. The structure of the Chinese economy is in the middle of a transition, and is being optimized and updated, with the service industry occupying half of the whole GDP, whilst the contribution of consumption has reached 60%, and the growth rate of high technology industries is significantly higher than that of the average industrial base. Consumption demands on information, culture, health and tourism are flourishing, and the developments of energy-savings and the green economy are just beginning, whilst the new growth point of economy is formed at a quick rate. My Asian and European colleagues have told me that Chinese tourists are their Gods of Money. I believe, Chinese products are not bad, and that Chinese tourists must spend their money at home.

Investors ask, is China closing its gate on reform? The answer is that China’s determination to reform is not going to change. Our goal is to propel the governance system of the country as well as the modernization of capacity, and to develop our own market economy, democratic politics, advanced cultures, a harmonious society as well as eco-civilization. By 2014, 80 pre-set key reform tasks were basically completed. In the first half period of this year, we already put forward over 70 key reforming protocols. We have gnawed upon stiff bones and stepped into the danger zone, while adhering firmly to the reforming direction of the market economy. We are going to continue to focus on practical and powerful reforms in the fields of market, finance & taxation, banking, investments, prices, opening-up to the world and for people’s livelihoods.

Shareholders ask, Will China experience a financial crisis? It is true that some while ago, fluctuations occurred on the Chinese stock market. However, efficient measures were taken so that the market was stabilized, systematic risk was avoided and the mechanism of Renminbi exchange rate was optimised. Developing and improving capital markets is the direction of China’s financial reform, which is not going to change. I think that there exist issues of mechanism and experience, yet what plays an even more important part is confidence. I have confidence in the economic development of China, and in the Swedish and European economy, too.

Entrepreneurs ask, Is China suppressing foreign investment? I would like to say that opening-up to the world is China’s essential national policy, and that the policy of making use of foreign capital and the direction of providing better services for foreign enterprises from all countries that invest and set up companies in China will not be changed. China respects non-discriminatory international business customs, obeys the principles of WTO and treats all the market actors including foreign-venture enterprises with fairness and justice. They, just like Chinese enterprises, have access to the national treatment and must abide by the laws of China. We are going to address the concern of foreign investors in time, to protect their legal interests, especially intellectual property rights and to create a legal policy environment with openness and transparency, an administrative environment with high efficiency and a market environment with equal competitiveness.

Dear friends,

During the past few years, practical collaborations between China and Sweden have been developing at a stable pace in a variety of fields and the situation looks promising. However, many people have been wondering whether the bottleneck of the bilateral annual trading value of 14 billion USD can be broken-through, so that bilateral trade and investment can go to a new level. My thoughts are as follows:

First of all, industrial capacity cooperation should be pushed. There are demands for the constructions of basic facilities and industrial investments from every country in the world, and the policy of Belt and Road has offered new opportunities. China owns the complete industrial system and a powerful capacity for the integration of equipment manufacturing. Enterprises ought to unearth the potential of industrial capacity and technology collaborations whilst the government ought to support and protect the capacity for collaborative development. The Chinese high-speed railway industry has a very dense network, as well as up-to-date technologies and rich experiences, which can lead to excellent economic and social profits if the China and Sweden can collaborate. We should carry out exploration bravely, seeking solutions carefully so that the high-speed railway can become a new shining point of the collaboration between these two countries.

Secondly, green development should be propelled. During the past decade the Chinese environment-protection industry has been increasing at 20% per annum, and environmental services have been increasing at 28% per annum, whilst resource recycling has been increasing at a 14% average rate. By the end of this year, the industrial production values of the three industries of energy-saving, environmental protection and resources recycling of China will exceed 4.5 trillion USD. Social investment in the field of environment protection has been approximately 1 trillion USD over five years. In recent years, the two sides have been carrying out wide dialogs regarding the system solutions of low-carbon, environment protection, energy-saving as well as the planning and construction of eco-cities, green collaboration has become a new growth node. The advantages of the Chinese market, financing and platforms should be combined with the advantages of Swedish technology and experience, so that an even wider range of mutual benefit and win-win can be realized.

Thirdly, innovation collaborations should be deepened. To encourage people to create business and innovation is a crucial part of the adjustment of China’s structure. We reduce taxes for small companies, establish a leading fund of venture capital, and propel the activity of Internet + and implement several strategies such as China Made 2025. There are over ten thousand new companies registered and established every single day, and the common people’s enthusiasm for starting up business and creating novel things is stimulated and numerous employment opportunities are created. Sweden is a country based on innovation which has been taking a leading position in fields such as information communications, life science and precision-machine equipment. We open our arms and welcome more Swedish high-technology enterprises and researching& development institutes to settle in China, so that more Chinese enterprises and scientific research institutes can enhance their R&D. We anticipate that Sweden would facilitate Chinese enterprises with qualifications and capacities to invest in Sweden.

We cannot say that we are fully satisfied with the current situation of China-Sweden economic collaboration, but are also aware of the potential risks and dangers. Nonetheless, how should the collaboration level be raised? In my opinion, we should stand at a higher point to look into distance, namely, the China-Sweden relationship should be viewed from an even higher point of view where the issues in reality are found and well solved. We need to work harder in the following fields.

Firstly, potential should be unearthed. Though the China-Sweden relation has been developing stably, the scale and the level of collaboration is not in the line with the economic potential of the two countries and their regional business positions. During the past few years, the trade value between China and Sweden has remained at around 14 billion USD, which goes against the tendency of the constant growing China-Europe trading value, and which is not to compare with growth of the China-Germany, China-Britain or China-Finland business. The China-Sweden trade and business collaboration still rests with traditional sectors with a few mega-projects. As the China-Europe relationship generally improves and the quality of collaboration becomes increasingly rich, the China-Sweden collaboration could fall behind if not pushed forward at a higher speed. We should be aware of the potential risk and dangers, and make efforts to expand the collaborative space. The mechanisms including China-Sweden Business Association, Sino-Swedish Green-Coop Platform etc., should be properly used. Collaboration in the fields of innovation, environment protection, new energy and infrastructures should be unearthed. The industrial collaboration in automobiles, high-speed railway and communications should be focused on so that two-sided investments can be propelled. Financial collaboration should be actively developed, and the realization of currency swap should be promoted, and the collaboration of China –Sweden projects at the Asian Infrastructure Investment Bank and collaborations of the enterprises of two sides at the project of Belt and Road should be strengthened.

Secondly, understanding should be promoted. Although communication between our two countries has been increasing greatly, their people still lack a comprehensive understanding of each other. Some Swedish friends have limited knowledge about China, and they have a biased comprehension to the issues of the political system and China’s road of development ahead. Chinese politics, society and ethnic relations are sometimes negatively reported in the media whilst the reality is not like that. Objective understanding is the basis of mutual trust and the prerequisite to good practical collaboration. We should create opportunities for the two peoples to understand each other in a more objective, deeper and comprehensive way through high level visits as well as the visits of multi-level and people to people links, so that a good public opinion can be created for the economic collaboration.

Thirdly, convenience should be propelled. The deepening of China-Sweden collaboration and development of the exchange visits stimulates each other. In the past few years, there have been increasing Chinese tourists and China-venture enterprises that visit Sweden. According to the Swedish statistics, the number of the Chinese tourists visiting Sweden has doubled during the past five years. With this circumstance, the issue of the difficulty of visa application stands out. For Chinese citizens, a visa application to Sweden takes a long time and requires a complicated procedure. That forms difficulty for enterprises that want to invest & start up business, or to travel and consume in Sweden. As China is developing all the time, all countries are trying to grasp the opportunities of China, to attract the Chinese tourists for travelling and investing. It has become the norm now that visa applications of Chinese citizens is being simplified, many European countries and USA have granted Chinese tourists with visas of multiple entries within several years, and the application process usually takes no more than 2-3 days. We hope that driven by the same daring spirit that established diplomatic relations with China many years earlier before other western countries, Sweden could once again take practical measures so as to realize the simplification of visa application of Chinese citizens before more western countries do.

Dear friends,

The China Summit has made positive contributions to promoting the development of China-Sweden diplomatic relationship. I want to thank all of you, my dear friends, who have also made constant efforts in the practical mutual collaboration. Confronted with the challenges that rise and fall, we are sure to leap over the barriers of mountains and seas, and create an even wider road of mutual-benefit and win-win between China and Sweden, as long as we stick with the belief of opening-up and collaboration and solve the issues with wisdom.

I wish every success to the Summit.

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