Ladies and gentlemen,

Dear friends from the Australian business community,

I am glad to have this breakfast meeting with you today. I have visited your great country several times, and I am deeply impressed by Australia's beautiful scenery, rich resources, and particularly its people who are hard-working, sincere and honest. In recent years, Australia has registered robust and sustained economic growth, creating more jobs while keeping inflation under control. This is unusual among developed countries and has won Australia international recognition. Australia is committed to promoting economic cooperation in the Asia-Pacific and building strong ties of investment and trade with China. It is one of the first group of developed countries to recognise China's full market economy status. The past 35 years since the forging of China-Australia diplomatic ties have seen frequent high-level exchange of visits and growing cooperation between us in the political and economic fields and in culture and tourism. Chinese president Hu Jintao will visit Australia later this year, which will be an important event in our friendly relations. This morning, I would like to brief you on current developments in China and offer my views on how we can enhance mutually beneficial cooperation between China and Australia in various areas.

China's economy has maintained steady and robust growth in the past few years. In 2006, China's GDP grew by 10.7 per cent. It was the fourth consecutive year in which China's GDP growth rate reached or exceeded 10 per cent. And inflation was low. More than 11 million urban jobs were created, and income rose significantly for urban and rural residents. Last year, China's trade in goods totalled 1,760 billion US dollars. Its import reached 800 billion US dollars, up 20 per cent over the year before. China's development has not only delivered real gains to the Chinese people; it has also contributed to the economic growth of Australia, the Asia-Pacific and the world at large.

In history, many developed countries encountered, to varying degrees, problems such as resource shortage, environmental degradation and widening income gap in the course of rapid economic growth, industrialisation and urbanisation. China has met similar problems in its fast development. To address these problems and sustain China's socio-economic development, we pursue a scientific thinking on development that is people-centric and aims to promote comprehensive, balanced and sustainable development. We are working to build a harmonious socialist society. To achieve this goal, we are putting more efforts in adjusting the economic structure and changing the growth model, and we are working to make China's development resource-efficient and environment-friendly.

The Chinese Government is taking forceful measures, including adopting and enforcing laws, standardising market entry and economic tools, to promote saving of energy and resources and environmental protection. Our targets are as follows: By 2020, cut energy consumption per unit of GDP of the 2005 level by some 20 per cent and cut the emission of major pollutants such as sulphur dioxide as well as chemical oxygen demand by 10 per cent. We will increase input and enhance policy guidance to accelerate the development of social programmes and improve social security and income distribution so that all the people can benefit from China's reform and development.

Ladies and gentlemen,

China and Australia are both important countries in the Asia-Pacific and we enjoy close business ties. China is now Australia's second largest trade partner and its number one source of import, and Australia is China's ninth largest trade partner. In 2006, the volume of bilateral trade in goods reached 33 billion US dollars, up 21% year-on-year. Australia has launched 8,130 investment projects in China, with total paid-in capital exceeding 5 billion US dollars. China's investment in Australia has also increased. There is a broad prospect for expanding and upgrading the bilateral cooperation.

China and Australia should become strategic partners in energy and resource cooperation. The global distribution of mineral resources is uneven, and different countries have different resource deposits. Closer international cooperation and fair trade will bring about efficient allocation of mineral resources. China is both a major consumer and producer of minerals. We give high priority to resource conservation and rely mainly on domestic supply to meet growing demand for mineral resources. At the same time, the shortage of some mineral products is met through trade. China is ready to enter into a long-term strategic partnership in energy and resource cooperation with Australia based on the principles of drawing on each other's strengths and reciprocity. I hope that the two countries will expand trade of iron, nickel, copper, manganese and alumina and sign more long-term supply contracts. In trade of minerals, suppliers and customers should address the concerns of the other side while pursuing their own interests so as to put in place a fair and equitable trading system and pricing mechanism. China is ready to enter into further cooperation with Australia on the Guangdong LNG and new gas field projects, and we encourage Chinese companies to participate in processing of Australian minerals and construction of railways and other infrastructure in mining areas and ports. This will help stimulate Australia's economic development and employment.

China and Australia should work together to promote sustainable development. To protect global environment and realise sustainable development requires the concerted efforts of all countries. China and Australia should enhance exchanges in environment and speed up the launching of cooperation projects to respond to climate change, develop renewable energy, reduce greenhouse gas emissions, protect the environment in mining areas and strengthen safety and management. We also need to explore ways of conducting cooperation in the efficient development and use of mineral resources and in promoting circular economy and energy conservation. The working group on clean coal technology has held its first meeting and adopted a detailed work plan. It is a good start. We hope to increase dialogue with Australia under such mechanisms as the Asia-Pacific Partnership on Clean Development and Climate and enhance consultation on multilateral environmental issues, to make greater contribution to protecting global environment and promoting global development.

China and Australia should expand cooperation in sectors of respective strengths. Australia has developed agriculture and animal husbandry. Its merino wool is world renowned. High-tech industry is growing fast in Australia, and the services have become a pillar of Australia's economy. China is rich in labour supply and has strong manufacturing capacities and great market potential. We should draw on our respective strengths and extend cooperation to more sectors. China wishes to import Australia's advanced technologies and its competitive products. We also hope that Australia will increase import of machinery, electronics, telecommunications equipment and high value-added and labour-intensive products from China. We should expand trade in services and scale up cooperation in banking, insurance, tourism, logistics, shipping and consultancy. We should also enhance exchanges in agricultural technologies and information and upgrade agricultural trade.

China and Australia should speed up efforts to improve trade and investment cooperation mechanism. China and Australia have similar positions in the agricultural negotiation of Doha round and maintain good communication and cooperation. China is ready to work with Australia and other parties to lower trade barriers and fight protectionism, thus playing a constructive role in working to conclude the negotiation and advancing trade and investment liberalization and facilitation. Last year, Chinese premier and Australian prime minister reached a four-point understanding on establishing a free trade area. On this basis and with our overall interests in mind, we should act in the spirit of mutual understanding and accommodation and resolve difficulties arising in the negotiation in a pragmatic way and reach agreement at an early date. The government agencies of the two countries should enhance dialogue and consultation on energy, environmental protection and protection of intellectual property rights and encourage the forging of partnership between our business communities, particularly small- and medium-sized enterprises through information guidance, policy support and better services.

Dear friends,

China pursues scientific, harmonious and peaceful development. Domestically, we endeavour to build a harmonious society. Internationally, we pursue an opening-up strategy for mutual benefit and win-win progress, and we are committed to building a harmonious world. China will further expand trade, make effective use of foreign investment and encourage well-established Chinese companies to make investment overseas. China will ensure its opening-up strategy is more effectively carried out. Australia is actively involved in Asia-Pacific economic cooperation. To deepen China-Australia economic and technological exchange and cooperation meets our mutual interests. We are ready to work with the Australian business community to consolidate progress in cooperation, upgrade cooperation and strengthen our cooperative partnership for mutual benefit and win-win progress in the twenty-first century.

Thank you!