Address at Welcome Luncheon by National Committee on US-China Relations and US-China Business Council

Tang Jiaxuan State Councilor of the People's Republic of China
Washington DC, 27 July 2005

Ambassador Hills,
President Orlins,
Chairman Eskew,
President Frisbie,
Friends,
Distinguished Ladies and Gentlemen,

It gives me great pleasure to attend this luncheon, meeting all the friends, old and new. Let me thank the National Committee on US-China Relations and the US-China Business Council for their kind invitation and gracious hospitality.

I would also like to take this opportunity to thank the National Committee on US-China Relations and the US-China Business Council, as well as others present here, for their dedicated efforts over the years to increase the understanding and friendship between the two peoples and promote the relations between the two countries.

I come to America this time at the invitation of the US Government mainly to implement the important agreement reached by President Hu Jintao and President Bush, and, through working together with the US side, to move forward the constructive and cooperative relations between the two countries.

Ladies and Gentlemen,

During the visit, I have been deeply impressed by the keen interest of our American friends in China's development. So let me take this opportunity to give you a briefing on it first.

Twenty-six years have gone by since China began its reform and opening up. Earth-shaking changes have taken place in China.

Thanks to sustained high growth, China's GDP has gone up from less than US$150 billion to US$1.65 trillion, its foreign trade increased from US$20.6 billion to US$1.15 trillion, its share of the world economy risen from some 1% to nearly 4%, and it has been elevated to the third place in global trade.

China's society has taken on a new look, as the living standards of the people keep improving. Over these years, China's per capita GDP grew from US$190 to over US$1,200. The Chinese Government has helped over 200 million rural poor out of poverty, and provided subsistence allowance to over 20 million low-income urban dwellers. Boasting the world's largest mobile phone consumer group and the third largest automobile market, China has the world's largest fixed line telephone network and mobile phone network, and the second largest public internet with the number of users rising over 150 times within eight short years to over 100 million. China's society is a lot more open. With 28.85 million outbound visits and more than 100 million inbound visits in 2004, China has become the fourth largest tourist market in the world.

Development of democracy and rule of law in China continues with people's rights as masters of the house being guaranteed according to law. Direct elections are held for village committees and urban neighborhood committees throughout the country. In March last year, China's National People's Congress met to write "the State respects and safeguards human rights" into the Constitution. China has acceded to 21 international human rights instruments and conducted human rights dialogue with many countries, the US included, on the basis of equality and mutual respect.

China sticks to a path of peaceful development. In essence, it means that China wants to capitalize on world peace to develop itself and better safeguard and promote world peace with its own growth. In China, we will mainly rely on our own strength to address the outstanding problems and achieve the goal of building a moderately prosperous society in an all-round way. In the world arena, we will continue to pursue an independent foreign policy of peace and commit ourselves to world peace, common development and mutually beneficial cooperation. China firmly follows a defense policy of a defensive nature. China's defense spending of 2005 is budgeted at US$29.56 billion, a far cry from the other major countries, both in aggregates and per capita terms.

Facts have proven that China's development not only benefits the 1.3 billion Chinese people, but contributes to economic growth in Asia and the world as a whole. About 20% of the global growth in 2004 was owed to China's contribution. China's development also spurs progress of human civilizations, enriches diversity of the world and promotes peace and stability in regions and around the world. By successfully feeding, clothing and sheltering one fifth of the world's population, China has made an important contribution to the stability and development in the world. China's development is an opportunity instead of a threat to the world. That is becoming the consensus of the international community.

One should not overlook the fact that China's huge population, weak economic foundation, uneven development of its different regions, and the per capita GDP level that ranks well behind 100th place in the world would mean numerous problems, difficulties and challenges in our road to progress. China still has a long way to go before it realizes modernization and delivers a prosperous life to its people. We expect nothing but a long period of persistent hard work.

That is why we guide ourselves with Deng Xiaoping Theory and the important thought of the "Three Represents", stay focused on economic development and concentrate our energy on fulfilling our grand objective of building a moderately prosperous society in an all round way during the first two decades of this century. That is why we talk about following a scientific approach of development, put people first in administration, and promote simultaneously our economic development, political development, cultural development, and the development of a harmonious society. The more China gets developed, the more it can contribute to world peace, stability and prosperity, and the more opportunities it can bring to the rest of the world.

Ladies and Gentlemen,

Also in these 26 years, China-US relations have moved ahead steadily amid twists and turns.

As you all know, relations between China and the US had had a rather unfortunate experience before the establishment of diplomatic ties. Today, the two countries work closely together to promote a constructive and cooperative relationship. Through exchanges of visits, meetings at international gatherings, hotline conversation and correspondence, the leaders of our two countries have stayed in touch with one another on bilateral relations and major international or regional issues of mutual interest.

In the early days of China-US diplomatic relations, there was no intergovernmental cooperation agreement to speak of. Today, the number of such agreements has exceeded 30. Two-way trade in 1978 was only US$990 million and mutual investment zero. Last year, China-US trade reached US$169.62 billion. US investment in China has added up to US$50 billion in paid-in value and some Chinese enterprises are opening US-based businesses.

China and the US, once almost completely cut off from each other, are seeing more than one million of their people traveling every year with over 3,000 people flying over the Pacific every day. Right now, the two countries are served by 54 flights a week and the number is expected to reach 249 by 2010.

Ladies and Gentlemen,

Over these 26 years, the world has undergone profound changes. Mankind has moved out of the dark shadow cast by the Cold War standoff, with peace, development and cooperation emerging as the irresistible trend of history. With their interests intertwining, countries have become increasingly interdependent. In the meantime, many factors of instability and insecurity remain, such as terrorism, proliferation of weapons of mass destruction, drug trafficking, spread of deadly diseases and other outstanding global problems.

Against such a backdrop, China-US common interest has increased rather than decreased; the foundation of their cooperation has solidified rather than weakened; and the importance of the relationship has become more pronounced rather than curtailed.

During their Summit meeting in Santiago, Chile last November, President Hu Jintao and President Bush agreed to further the constructive and cooperative relations between the two countries and step up their dialogue and cooperation in bilateral ties and on important international and regional issues. What they did amounted to charting a direction for China-US relations in the 21st century. This year, the two Presidents will exchange visits. The successful exchange of visits between the two heads of state, I am sure, will inject fresh impetus for further headway in our constructive and cooperative relationship.

The two countries have now carried out fruitful coordination and cooperation in the economy, trade, counter-terrorism, law enforcement, non-proliferation, as well as on the Korean nuclear issue and the UN reform. In a few days, China and the US will hold their first strategic dialogue in Beijing. I firmly believe that stronger China-US coordination and cooperation in regional and international affairs will serve not only the fundamental interests of the two countries, but also world peace and development.

Ladies and Gentlemen,

While enjoying the new opportunities for development, China-US relations are also faced with certain challenges. We should stand high to get a commanding view, recognize the mainstream of the relationship and the trend of the times, keep the overall picture and the future in mind and work to broaden consensus and promote cooperation.

Twenty-six years ago, our leaders, displayed extraordinary courage and brought the normalization process to fruition. Today, we need the same courage to push our constructive and cooperative relations in the new century in the interest of our two peoples and the people the world over.

In my views, China and the US can work together particularly in the following areas:

First, step up coordination and cooperation in the promotion of peace and security in the world.

As the world's largest developing country and largest developed country, China and the US shoulder an important responsibility for peace and security in the world.

The war on terrorism has a direct bearing on the security of the Chinese, American and the people around the world. China and the US have conducted fruitful counter-terrorism cooperation in the past in such fields as diplomacy, law enforcement, intelligence and financing. The Chinese side is ready to continue such cooperation with the US side on the basis of reciprocity and mutual benefit.

Firmly opposed to proliferation of weapons of mass destruction, the Chinese Government has worked continuously to improve its legal regime of export control, beef up law enforcement and participate in international non-proliferation cooperation. We are ready to enhance such cooperation with the US side on the basis of mutual respect and mutual trust.

In this 60th anniversary year of the United Nations, the issue of UN reform has captured much attention. China supports UN reform and believes that such reform should be all-dimensional and wide-ranging, with emphasis on the settlement of the development issue and implementation of the Millennium Development Goals. All reform programs should be discussed democratically by the entire membership with a view to reaching broadly-based consensus. All reform measures must also help strengthen the authority and efficiency of the United Nations. We are ready to step up consultation with the relevant parties, the US side included, to help move UN reform in the right direction.

Both located in the Asia-Pacific, China and the US share a common stake in maintaining peace and common prosperity in the region. The two sides have enjoyed sound cooperation on the Korean nuclear issue and worked productively within such multilateral mechanisms as APEC and ARF. With respect to the Korean nuclear issue, China consistently stands for a nuclear-weapon-free Korean Peninsula, the direction of a peaceful solution through dialogue and maintenance of peace and stability on the Peninsula. We are glad to see that the Six-Party Talks has already been relaunched for the fourth round. China is ready to enhance coordination and cooperation with relevant parties, the US included, to push for positive progress in the Six-Party Talks.

Second, appropriately handle the Taiwan question and jointly oppose and check "Taiwan independence".

The Taiwan question is China's core interest as it bears on the country's sovereignty and territorial integrity. An appropriate handling of the question, therefore, is the key to a stable and growing relationship between China and the US.

"Peaceful reunification" and "one country, two systems" remains our basic policy. Last March, President Hu Jintao made a four-point proposal on the development of cross-Straits relations under the new situation. We are ready to do our utmost with maximum sincerity to secure the prospect of a peaceful reunification. But we will never put up with "Taiwan independence", nor will we allow any one to make Taiwan secede from China by any means.

Recently, we have taken a host of positive steps to improve and develop cross-Straits relations, such as charter flights for Taiwan business people during the 2005 Spring Festival, visits to the mainland by leaders of KMT, PFP and New Party, all recognizing the "1992 Consensus", a pair of giant pandas as a gift to the Taiwan compatriots, and marketing of Taiwan agricultural produce on the mainland. These measures, which boosted exchanges and cooperation between the two sides of the Taiwan Straits, have been well-received by the people on both sides and appreciated by the international community.

We have always stood for dialogue with all Taiwan-based political parties, organizations and personages who recognize the one China principle and the "1992 Consensus", discussing with them ways to better advance cross-Straits relations. So long as one recognizes the one China principle and the "1992 Consensus", we would like to discuss with him about developing cross-Straits relations and promoting peaceful reunification, no matter who he is, what party he represents and what he said or did in the past.

Though we can see some signs of relaxation and emergence of some positive factors in cross-Straits relations, the Taiwan authorities have to date refused to recognize the one China principle, and the "Taiwan independence" forces are still pushing their agenda of "constitutional reengineering", "name rectification" and other "de jure independence" activities. The source of threat to peace and stability in the Taiwan Straits still exists, making it impossible for cross-Straits relations to improve steadily.

Opposing and checking "Taiwan independence" and maintaining peace and stability in the Straits serve the common interests of both China and the United States. We appreciate repeated statements by President Bush and the US Government that US will commit to the one China policy, abide by the three joint communiqués and oppose "Taiwan independence." We hope that the US side will earnestly honor these commitments and join the Chinese side in opposing and checking "Taiwan independence" so as to preserve our common interests of seeing a peaceful and stable Taiwan Straits.

Third, appropriately handle economic and trade frictions and deepen mutually beneficial cooperation for a win-win result.

At the 16th JCCT meeting not long ago in Beijing, our two sides had a comprehensive and in-depth exchange of views on ways to strengthen economic and trade cooperation and properly address some thorny issues. A number of agreements were reached on such matters as intellectual property rights, agricultural produce trade, distribution right, textile trade, and government procurement. We are ready to work with the US side to follow these agreements through and ensure a sound and steady growth of China-US economic and trade cooperation.

With commerce growing rapidly between the two countries, China has become the third largest trading partner and the fastest-growing export market of the United States, while the US China's second largest trading partner and top source of FDI. Mutual interdependence, mutual benefit and win-win results are basic features of such a relationship, which has not only delivered enormous tangible benefits to the two peoples but also boosted economic growth across the world. The import by the US of quality and affordable Chinese merchandize has alleviated the inflation pressure and saved American consumers nearly US$20 billion every year. American capital, technology and managerial expertise, in turn, have instilled vitality into the Chinese economy. Many young Chinese are making calls with Motorola cell phones, working with Dell or Compaq laptops, and hanging out with friends in Starbucks, McDonald's or KFC.

Needless to say, in the course of fast growth, there will be some frictions. When frictions occur, the two sides should stick to the principle of long-term development, work out the problems through equal-footed consultations and strive for a win-win result. To politicize trade issues or to get emotional about them does not help solve problems, therefore we are not in favor of such practice.

The Chinese side attaches importance to American concerns about trade imbalances, IPR protection and others, and has taken, and will continue to take effective steps to address them gradually. China is not after prolonged surplus in trade with the US, and will continue to make good on its WTO accession commitments by opening its market still wider to American products. In coming five years, China will import over US$1 trillion worth of goods and allow even greater access for services. All this will mean boundless opportunities for US businesses. The Chinese Government attaches great importance to IPR protection and will step up its measures in this regard. We have lowered the threshold for criminal penalties against IPR infringement, intensified law enforcement and launched IPR Protection campaigns. These measures will continue.

It takes the efforts of both China and the US to address their economic and trade frictions. We hope that the US side will recognize China's full market economy status, lift restrictions on commodity and technology exports to China and correct the wrong practices of trade protectionism. Increasing exports to China, instead of restricting imports from China, is the right course of action to solve trade imbalances.

What is more, China and the US should explore new areas of cooperation. As major energy producers and consumers, our two countries should, and are entirely able to strengthen energy cooperation, including cooperation in the research, development and application of clean and alternative energy sources and the construction of nuclear power plants. The two sides may also have more dialogue on macroeconomic policies and coordination and cooperation in multilateral economic organizations.

Fourth, consolidate public support for China-US friendship by expanding people-to-people contacts.

Since the establishment of diplomatic ties, contacts between the two peoples have been on constant increase. Thirty-three pairs of friendship provinces (states) and 123 pairs of sister cities have been twinned. More than 1.31 million Americans visited China in last year alone while 440,000 Chinese went the other way for family reunion, education or business.

More than 180,000 Chinese have studied in the US with over 60,000 still studying in American schools. In contrast, only some 3,000 Americans are now studying in China, ranking the third in foreign students population breakdown. Clearly, there is a huge potential for educational exchanges and cooperation between the two countries.

In China, most colleges, middle schools and primary schools have English on their curriculums, with the total number of students reaching 120 million. In the US, nearly 1,000 colleges and over 200 elementary or high schools offer Chinese courses. The Chinese communities have set up some 600 Chinese language schools. Last November, the first Confucius school was set up inside the University of Maryland. Still, Chinese language learning in the US is a far cry from the needs of bilateral exchanges.

In coming October, China's Ministry of Culture and the John F. Kennedy Center for the Performing Arts in the US will jointly launch in Washington DC a Chinese Art Festival for 2005, where more than 600 Chinese artists will give performance or hold exhibitions. This is yet another big event in Sino-American cultural exchanges.

The Chinese and Americans have cherished warm sentiments towards each other. Mickey Mouse is very popular among Chinese kids while Chinese basketball star Yao Ming a household name in this country. Increased exchanges and cooperation between our two peoples will help deepen mutual understanding and friendship and bolster public support for the constructive and cooperative relations between the two countries, thus better serving the interests of our peoples.

Ladies and Gentlemen,

Since ancient times, China's prevailing philosophy has been one that preaches "peace is most precious" and "harmony without uniformity". We always believe that though the Chinese and American civilizations are different, they can easily get along with each other instead of repelling each other.

As major countries of global influence, China and the US should respect and learn from each other, seek common ground while shelving differences, and complement each with respective strengths. In so doing, we can set a good example for countries and civilizations to live side by side harmoniously and engage in constructive cooperation, making a contribution to the common development of all mankind.

Last August, nine American students from Snowden National School in Boston joined Chinese students in Hebei and Beijing in a 15-day program entitled "American and Chinese City Students View China". The youngsters visited farmers in their Bagualing households, did volunteer work in rural communities and taught each other English and Chinese. They visited the Great Wall, the Forbidden City and other attractions, and conducted discussions on their campus life, going to college or getting a job.

During the program, the students overcame language and cultural barriers, rose above perhaps one-sided views, and forged deep friendship through communication and interaction. The American students learnt to sing the Chinese song "Jasmine" and paint landscape with Chinese brushes. "We like China" – These are words from the bottom of their hearts. The Chinese students learnt quite standard American English pronunciation and the American hip-hop. When it came to the time of parting the students promised to each other that they would study hard, keep fit and meet again in the future.

The youth represents the future of our world. I see in these lovely students the profound friendship between the Chinese and American peoples and the bright prospects of China-US relations. I am confident that future relations between our two countries will be infinitely better.

Though tomorrow belongs to the next generation, the obligation to create a beautiful tomorrow falls on the shoulders of the current generation. Let us take a long view from a strategic plane when looking at and handling China-US relations. Let us earnestly act on the agreement reached by our leaders, keep faith with the principles of the three joint communiqués, focus ourselves on our common interests with strengthened dialogue, exchanges and cooperation, remove misunderstanding and properly address the differences, thus moving forward the constructive and cooperative relations between the two countries.

Thank you.