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Join Hands to Create a Bright Future for China-Germany Business Cooperation

Speech by H.E. Jia Qinglin
Chairman of the National Committee of
The Chinese People's Political Consultative Conference of
The People's Republic of China
At Sino-German Enterprises Cooperation Forum

Berlin, 3 November 2011

Chairman Heraeus,
Ladies and Gentlemen,
Dear Friends,

I am very glad to come to Berlin, a city famous for its history and culture, during my official goodwill visit to Germany, and to meet with friends here at the Sino-German Enterprises Cooperation Forum. The theme of the Forum, "Join Hands for Common Development," is well-chosen. Over the years, a large number of visionary people from business community have worked in this spirit to bring about fruitful business and technological cooperation between our two countries. I wish to take this opportunity to extend sincere thanks and best wishes to you.

The German people are a great people noted for precision and analytical thinking. Known as "a country of poets and philosophers" with a time-honored history and splendid culture, Germany has cultivated many great thinkers, musicians and scientists and made major contribution to the progress of human civilization. When I last visited Germany in 1987, I was deeply impressed by your strong economy, advanced technology and hard-working people. Back here again after all these years, I see huge changes that have taken place after German reunification.

Germany has long been a major economy with increasing influence in the world. I once worked in the field of machinery manufacturing, imports and exports for more than 20 years. I was directly involved in many projects on technological cooperation and imports and exports with German companies and was deeply impressed by Germany's manufacturing industry. It is world-renowned and stands at the top of the global industrial chain. Not only leading the world in the traditional manufacturing sector, Germany also enjoys a big advantage in the emerging manufacturing sector. In my view, Germany's long-term leading role in the manufacturing sector stems from the conscientious work, dedication and diligence of the German people, as well as the remarkable scientific and technological innovation capacity and a complete strict training system for technical work in Germany. More importantly, Germany has consistently concentrated on developing its real economy, with particular focus on the manufacturing sector, which was one of the main reasons why the German economy withstood the test of the 2008 global financial crisis and took the lead among the developed countries to recover from the crisis. We applaud Germany's achievements in economic and social development and sincerely wish it stronger economic growth!

Since the establishment of diplomatic relations in 1972, high-level exchanges between our two countries have been frequent; our mutual understanding has deepened; business relations have grown rapidly; and cooperation has been productive in the fields of science, technology, education and culture. In 2010, we decided to promote strategic partnership across the board. Last June, we successfully held the first round of inter-governmental consultation which built a very good new platform for all-round practical cooperation. Next year will be the 40th anniversary of the establishment of our diplomatic relations. China will hold the "Year of Chinese Culture" in Germany, join Hannover Messe 2012 as the official Partner Country, and launch a series of activities to commemorate the 40th anniversary. I am confident that as long as we bear in mind the strategic and long-term significance of our relationship, respect each other, treat each other as equals, and accommodate each other's core interests, our strategic partnership will keep moving forward along the right path.

Business cooperation is the engine and stabilizer of China-Germany relations. At present, China and Germany are each other's important trade and investment partner. Our business cooperation is at the forefront of China-Europe business cooperation both in terms of its breadth and depth. In the early days after the establishment of diplomatic ties, our trade volume was only US$275 million. In 2010, it reached US$142.4 billion, an increase of more than 500 times and accounting for nearly 30% of the total China-EU trade. By last August, there had been over 7,000 German businesses in China, with over US$18 billion of investment in over 7,500 projects. Germany had transferred 16,000 technologies to China with a contractual value of more than US$50 billion, making up about 38% of the total value of EU's technology transfer contracts with China. At present, China is one of the favorite overseas investment destinations for German companies, and one of the most important export markets for Germany's pillar industries such as machinery, automobile and chemical industries. Facts have shown that the sound development of China-Germany business cooperation has brought about tangible benefits for the two peoples.

Ladies and Gentlemen,

Thanks to over three decades of reform and opening-up, China has registered remarkable achievements. In 2010, China's GDP totaled US$5.88 trillion, the second largest in the world. The US$2.97 trillion of foreign trade made China the world's biggest exporter and second biggest importer of goods. Our more than 500 million tons of grain production has enabled us to provide sufficient food for 1.3 billion Chinese people. Despite these great achievements, we are keenly aware of the challenges and arduous tasks lying ahead. China remains a developing country. Its per capita GDP is ranked at about the 100th place in the world. The overall level of productivity is not high. There is considerable gap between urban and rural areas and between different regions. And we still face the acute problem of lacking balance, coordination and sustainability in our development. It remains a long and arduous task for China to fully realize modernization.

In light of the Outline of the 12th Five-Year Plan promulgated early this year, in the next five years, China will energetically pursue scientific economic and social development, focus on transforming its economic development pattern, accelerate the strategic adjustment of economic structure, promote long-term, stable and fast economic development and social harmony and stability, and lay down the crucial foundation for fully building a moderately prosperous society by 2020.

-China will focus more on expanding domestic demand. The Chinese population, 20% of the world's total, are at an important phase of upgrading consumption structure, and have robust consumer demand in the cultural, sports, tourist, and other sectors. Due to accelerated industrialization, urbanization and agricultural modernization processes in China, over 10 million rural population migrate to cities every year, and the mid-west region of China is developing at a faster pace. All these will unleash great potential of consumer demand. We will build a long-term mechanism to expand consumer demand, fully implement a pro-employment strategy, deepen the reform of income distribution system, and improve social security system. We will boost Chinese people's spending ability, improve consumer expectation, upgrade consumption structure, and gradually expand the overall size of China's domestic market into one of the biggest in the world.

-China will pay more attention to scientific and technological innovation. At present, the contribution of science and technology to China's economic growth is 25-30% less than that in the developed countries. In the next five years, our R&D spending will rise to 2.2% of GDP. We will strengthen IPR protection, basic research and the research of high technologies of strategic importance. We will speed up the upgrading of traditional industries with new technologies, vigorously develop strategic emerging industries, such as energy conservation, environmental protection, new-generation of information technology, biotechnology, sophisticated equipment manufacturing, new energy sources, new materials, and new energy-powered vehicles. We will work hard to keep pace with the latest development in the new round of scientific and technological revolution and industrial revolution.

-China will place more emphasis on the conservation of ecological system. Saving resources and protecting the environment is our basic state policy. We have solemnly pledged to reduce CO2 intensity by 40-45%, raise the share of non-fossil fuels in primary energy consumption to around 15%, increase forest coverage by 40 million hectares, and forest stock by 1.3 billion cubic meters on the basis of the 2005 level by the year 2020. Firmly committed to green and low-carbon development, we will give priority to energy conservation and emissions reduction, increase forest carbon sink, develop circular economy, transform the ways of energy production and utilization, quicken steps to promote resource-conserving and environment-friendly production and consumption, strengthen our capacity for sustainable development, and foster a better conservation culture.

-China will put more emphasis on opening up to the rest of the world. In recent years, China's average import tariff rate has been lowered to 9.8%, and the foreign trade surplus is decreasing. In the coming five years, China's import is likely to exceed US$8 trillion, which will generate more business opportunities for the other countries. China will continue to improve the utilization of foreign capital so that it will play an even better role in promoting sound and fast economic growth in China. We will adopt a more proactive strategy of opening-up, and attach equal importance to imports and exports as well as inward and outward investments. We will open up new sectors, optimize the exports mix, expand our import of advanced technologies, equipment and key components, actively work for trade balance and improve the balance of international payments. Through our opening-up efforts we will advance development, reform and innovation.

As we enter the second decade of the new century this year, the world is experiencing profound and complex changes. Multipolarization and economic globalization are deepening, and countries are more interdependent. Opening-up and cooperation for win-win outcomes are increasingly becoming the consensus of the international community. However, there are more destabilizing factors and uncertainties, and the world is not peaceful. The underlying impact of the international financial crisis has become more palpable, the recovery of the world economy is fragile, and development-related issues are more pronounced. Myriads of traditional and non-traditional security issues are intertwined, posing new challenges to the international community.

Under such new circumstances, it is our historic task to work out ways of working together to overcome difficulties. China has decided to work together with Germany and all other countries for win-win outcomes and common development.

China will pursue a path of peaceful development. This is a strategic choice of the Chinese people after long and difficult exploration and is based on China's traditional culture. This choice fits the trend of the times and China's national conditions, and will take us to success. China will realize the great goal of achieving socialist modernization and fulfill the aspirations of our people for a better life. China will honor its solemn commitments to the international community and work for peace through cooperation. China seeks development by upholding world peace, and China's development will in turn contribute to global peace. In September, the Chinese government released the White Paper on China's Peaceful Development, once again solemnly declaring to the world the determination and will of China to unswervingly pursue the path of peaceful development.

China will continue to follow an independent foreign policy of peace, and will neither interfere in other countries' internal affairs, nor impose its will on others. China will further deepen its mutually beneficial cooperation and broaden common interests with all other countries to enlarge the pie of common interest. China will not adopt a beggar-thy-neighbor policy to make gains at the expense of others. China will continue to follow a national defence policy that is defensive in nature and will not engage in arms race or pose any military threat to other countries. China will not seek hegemony or expansion even as it continues to develop.

Ladies and Gentlemen,

The economic and trade cooperation between China and Germany has a solid foundation. We have strong complementarity and face new development opportunities. China's stable economic growth has provided even broader space for the development of our economic and trade relationship. I would like to take this opportunity to make three proposals on deepening China-Germany practical business cooperation.

First, we need to tap into the market potentials and expand bilateral trade. China will continue to adopt trade facilitation measures to expand the import of German scientific and technological products as well as consumer goods while continuing to import its hi-end equipments. Our two governments should actively promote the cooperation between enterprises in the services sector, jointly explore markets in third countries and nurture new growth areas for trade. Our enterprises should make full use of the platforms presented by the China Import and Export Fair (Canton Fair), the China International Industry Fair in Shanghai, the Western China International Fair, the China (Beijing) International Fair for Trade in Services and the Hannover Messe to expand trade channels and strive for the goal set by our two governments to double the bilateral trade in five years. We hope that Germany will take concrete measures to urge the European Union to recognize China's full market economy status as early as possible and relax its restrictions on high-tech exports to China. This will create a better environment for the sound and balanced development of our bilateral trade.

Second, we need to promote two-way investment and step up industrial interaction. There is still much room for our investment cooperation. Chinese and German enterprises should increase their investment and deepen cooperation in such fields as high and new technology, machinery equipment, automobile manufacturing and infrastructure. China will open its services sector, such as the financial and logistics sectors wider to the world while move ahead steadily with the education and health sectors. We hope that German enterprises will invest more in these areas, and that the German government and business community will provide support and assistance to Chinese enterprises in terms of visa, financing and legal consulting so that they can invest and set up businesses in Germany. Small and medium-sized German enterprises are very competitive in the capital and technology intensive industries. Our two governments should give more support and facilitation to SMEs in financing, information and administrative services and build more public demonstration platforms for their cooperation to raise the cooperation between our SMEs to a new level.

Third, we need to expand our cooperation areas and create new highlights. We need to consolidate and deepen our cooperation in such traditional areas as machinery, automobile, chemical engineering, electronics and electrics, transport and communications. In the meantime, we should vigorously expand and strengthen our cooperation in new areas such as new energy, new materials, energy conservation, environmental protection, aeronautics and astronautics as well as green economy and work hard to nurture new growth areas. We are happy to see that our cooperation in electric cars has been intensified, the China-Germany Bioscience Innovation Platform established, and the implementation of Sino-German Eco-park projects accelerated. Enhancing technical cooperation is not only the priority of our cooperation in new areas, but also a must to move our economic and trade cooperation beyond just buying and selling. When it comes to technology transfer, China always follows market rules and the principle of voluntariness and worked for win-win outcomes for enterprises.

Germany is an important country in the EU and a major force for European integration. China attaches high importance to its relations with the EU and has always supported the integration of Europe. We support the EU's efforts to tackle the sovereign debt crisis. The effective way to address excessive national debt is reform and development, which means to cut deficits through reform while making greater efforts to promote economic growth. Europe has a solid economic foundation, strong capacity for scientific and technological innovation, well-established legal systems, a sound market environment and quality human resources. We are confident that the European people have the wisdom and ability to overcome the current difficulties and to maintain economic stability and development. Europe will continue to be one of the main investment markets for China. China hopes that Europe will adopt measures to better facilitate Chinese investments in Europe. By increasing its investment in Europe and importing more European products, China is in effect bringing demand to Europe, which will help the European economy grow. Both China and the EU are important forces to safeguard world peace and promote common development. China is ready to enhance the mutual understanding with Europe and deepen our practical cooperation in all areas.

Ladies and Gentlemen,

The great German writer Friedrich Schiller once said:"The noble and pure friendship will not fade because of distance. Instead, it becomes deeper as two hearts draw closer." China and Germany are far away, but the distance cannot stop our exchanges and cooperation. Let us join hands to forge ahead and usher in an even brighter future for China-Germany relations!

Thank you.

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