Speech by H.E. Wen Jiabao
Premier of the State Council of the People's Republic of China
At the Eighth China-EU Business Summit

Brussels, 20 September 2012

President Herman Van Rompuy,
President Jose Manuel Barroso,
Ladies and Gentlemen,

It gives me great pleasure to meet in Brussels friends old and new from the Chinese and European business communities. This is the eighth time for me to attend the China-EU Business Summit and I value this opportunity to have candid exchanges with Chinese and European entrepreneurs.

China-EU relationship is one of the most important partnerships in the world and a strategic priority in China's foreign relations. I hold the development of this relationship close to my heart. As Chinese Premier, I have attended the China-EU Summit for 10 consecutive times, set foot on the beautiful land of Europe 11 times and visited 18 EU member states. I have forged deep working relations with many European leaders. I remember when I first attended the China-EU Summit in October 2003, EU leaders and I jointly made the decision to establish the comprehensive strategic partnership. After the EU had its biggest eastward enlargement, I used my first European trip as Chinese Premier to show China's strong support for European integration. At the critical juncture of the raging international financial crisis, I took a "journey of confidence" to several European countries to discuss with European leaders ways to tackle the crisis and deepen cooperation. When the European debt issue deepened and spread, I had in-depth exchange of views with European leaders and conveyed China's sincere wish for mutual help and mutual support in the trying times. Those scenes are still vivid in my memory and they are hard to forget.

We are glad to see that with the commitment of people from all sectors of the two sides, the China-EU comprehensive strategic partnership is covering more areas and gaining greater maturity. We have carried out fruitful cooperation in a wide range of fields. Business cooperation has been the most vibrant and productive part of China-EU relations. Our trade topped US$100 billion in 2003 and went on to reach US$567.2 billion in 2011, representing an average annual growth of 20.8%. The EU has been China's largest trading partner for eight consecutive years and China has become the EU's second largest trading partner. Investment by EU businesses in China has grown rapidly and exceeded US$80 billion in total. Chinese business investment in the EU is also burgeoning. It surged from more than US$100 million in 2003 to US$4.3 billion in 2011. The EU is the biggest technology provider for China. The two sides have signed contracts for technology import worth US$150 billion. Personnel exchanges have expanded. In 2011, nearly two million Chinese tourists and students went to Europe, five times the figure in 2003.

As a Chinese saying goes, "One cannot truly appreciate the difficulty unless he has experienced it in person." I know full well that all the aforementioned achievements have not come easily. Reviewing the course of China-EU ties in the past decade, I have the following observations that I would like to share with you.

First, the essence of China-EU relationship lies in its strategic nature. China-EU relationship is strategic because our cooperation is long-term, stable and comprehensive. It is not affected by our differences in ideology and social system. It is not about immediate gains or losses over any particular matter at any particular time. And temporary difficulties and setbacks have never made us lose confidence in our cooperation. Over the past decade, China-EU relations have made great strides, although they have also encountered brief twists and turns. Our relations have stood the test of changing international circumstances and moved forward along the right track. This is possible because we have kept to the strategic direction of our relations.

Second, the growth of China-EU relations can bring real benefits to both sides. Over the past 10 years, China has been the EU's fastest-growing export market. The tens of thousands of EU companies doing business in China have had handsome returns. The fast-growing Chinese import from Europe and China's rising investment in Europe have created a large number of jobs in EU countries. The quality yet inexpensive Chinese products have added varieties to the European markets and saved much spending for European households. European companies, on their part, have brought to China advanced technologies, equipment, managerial expertise and an array of brand products popular among Chinese consumers. The further China-EU relations grow, the more benefits people of both sides will receive.

Third, China-EU relations have gone beyond the bilateral scope and acquired important international influence. Both China and the EU are committed to multilateralism, greater democracy in international relations and world peace and stability. We both follow free and open economic and trade policies, reject trade protectionism and work to advance economic globalization. We both advocate protection of diverse civilizations and inter-civilization dialogue and exchanges. As two important forces in the international landscape of the 21st century, we both take an active part in building the international system and play an important role in countering such global challenges as energy security, food security and climate change.

Fourth, China and the EU can properly handle differences through dialogue and consultation. China and the EU differ in social system, cultural background and development stage. We face different problems and difficulties. It is only natural that we hold different views on some issues. This makes it all the more important for us to have candid communication based on mutual respect and enhance mutual understanding. Since 2003, we have put in place three mechanisms, namely the high-level strategic dialogue, the high-level economic and trade dialogue and the high-level people-to-people dialogue. Our dialogue and consultation mechanisms in various fields have increased from 19 to over 60. Whatever problems may come our way, as long as we stick to equal dialogue and consultation, we will be able to expand consensus, reduce differences and achieve win-win results.

Fifth, a future-oriented China-EU relationship has bright prospects. Between China and the EU, there are neither unresolved issues left from history nor conflict of fundamental interests. We share broad common interests on major international issues. This constitutes a solid political foundation for China-EU relations. Our economies are far more mutually complementary than competitive. The international financial crisis has not changed this complementarity. It has only deepened our economic inter-dependence. Our cooperation, which is based on mutual complementarity and common interests, is most stable and sustainable.

China-EU relations now stand at a crucial juncture of building on past achievements and opening up new prospects for the future, and face huge opportunities and challenges. We need to take a long-term view while meeting the immediate needs and advance our relationship in keeping with the trend of the times. We should work out a medium and long-term plan for our practical cooperation, map out a cooperation blueprint for the future, tap the cooperation potential and promote all-round, in-depth and balanced growth of China-EU relations.

- We need to scale up trade. We must uphold trade liberalization and facilitation, oppose trade protectionism, abolish those outdated export control policies at an early date and exercise restraint in resorting to trade remedy measures. We should strive for the goal of becoming each other's biggest trading partner by 2015 when we mark the 40th anniversary of the establishment of diplomatic relations.

- We need to boost two-way investment. China is ready to launch negotiations on a China-EU investment agreement as quickly as possible, properly handle all practical issues that are of interest to the business community, including market access, policy transparency and IPR protection, and provide institutional and legal safeguards for investment cooperation to bolster investors' confidence.

- We need to expand cooperation in infrastructure development. Chinese engineering and construction companies enjoy the competitive edge of low cost and reliable quality. They may take part in infrastructure development of EU countries through participating in the European Structure Funds and Project Bond Initiative, holding equity and joint contracting. The Chinese government will provide necessary support.

- We need to deepen cooperation in science, technology and innovation. We should continue to take space technology cooperation as a strategic priority and at the same time, step up cooperation in such high-end fields as bio-tech, nuclear energy, carbon capture and storage, information communications and cyber security. We should encourage our companies to work together in building joint R&D centers, technology transfer centers and joint incubators as platforms for long-term and stable cooperation, and harness both the EU countries' strong R&D capabilities and China's big market potential to pursue common development.

- We need to unlock the cooperation potential in urbanization. We should make good use of the two important platforms, namely, the High-level Conference on China-EU Urbanization Partnership and the China-EU Mayors' Forum and push for more concrete results from our urbanization cooperation. We welcome European companies to explore business opportunities in China in the areas of urban planning, smart transportation, electric vehicles, energy-efficient buildings, waste utilization, and waste and sewage treatment.

- We need to increase people-to-people and cultural exchanges. China will work with the EU to deepen exchanges and cooperation in education, culture, multilingualism and youth affairs, and launch all-round dialogue on mobility and migration as soon as possible. China will provide 30,000 scholarships for student and scholar exchange between the two sides in the next five years and support 1,000 mutual visits between young people every year.

Ladies and Gentlemen,

The underlying impact of the international financial crisis is still unfolding, and global economic recovery remains a hard and tortuous process. In particular, the development of the European sovereign debt issue has added uncertainty to the world economic recovery and brought difficulties to China-EU business cooperation. People in Europe, in China and indeed in the whole world hope to see Europe out of the difficulty at an early date.

Europe is on the right track in tackling its debt issue, and what is crucial now is to fully implement all the policy measures. Relevant countries need to stick to their actions of fiscal consolidation and structural reform, cement and expand the results achieved, and shore up confidence of various sides. EU countries need to stick together in times of difficulty, form synergy and send out a clear message of determination to safeguard the Euro and outcomes of European integration. The international community should give stronger support to the efforts made by Europe. We are confident that Europe, with a solid economic foundation and scientific and technological strength, has the ability and wisdom to properly handle the debt issue and will show fresh vigor and vitality.

China is the EU's trusted friend and cooperation partner. Last February, China put forward its ideas for helping resolve the debt issue and gave Europe timely, firm and strong support. At the G20 Summit last June, China decided to contribute US$43 billion to IMF resources increase so that the Fund may have more resources at disposal for tackling the European debt crisis. Over the past few months, China has continued to invest in the bonds of Eurozone governments and those of the European Financial Stability Facility (EFSF), and actively discussed ways of cooperation with the European Stability Mechanism (ESM). As a responsible long-term investor, China has pursued greater diversity in its investment, and Europe has been one of the major markets for China's foreign exchange reserves investment. China will continue to play its part in helping resolve the European debt issue through appropriate channels.

Macroeconomic indicators show that China's economic development is in good shape. In the first half of this year, China's GDP grew by 7.8% year-on-year. Although growth is slowing, it is still within our target range. The share of current account surplus in GDP was 2.3%. There is greater balance between domestic and external demand. From January to August this year, 9.18 million urban jobs were created, the Consumer Price Index (CPI) rose by 2.9% year on year and CPI growth fell to 2% in August. As a host of policy measures for stabilizing growth and structural adjustment fall into place, we expect the economy to further stabilize. Looking ahead, China's economy has huge dynamism and potential, and the long-term trend of sound development remains unchanged. We are fully confident that we have the ability to achieve development at a higher level and with better quality for a long time to come and we will contribute our share to the world economic recovery.

China needs Europe for its development and Europe also needs China for its development. China has proven and will continue to prove with concrete action that no matter how the international landscape may change, China will work with EU countries to share development opportunities and meet challenges. Let us boost confidence and join hands in making the China-EU comprehensive strategic partnership an example of international cooperation in the 21 st century.

Thank you.