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China's Development and the Future of China-US Relationship

The Chinese ambassador's address to the Peoria (IL) Rotary Club.

by Ambassador Zhou Wenzhong (April 11, 2008)

Ladies and Gentlemen,

Thank you, Tim, for your kind introduction. It is a pleasure to meet all of you, and thank you for your interest in China and the China-US relations.

Thirty years ago, China began its reforms and opening up. Since then, there has made remarkable progress. The economy has sustained rapid growth. From 147.3 billion US dollars in 1978 to 2.65 trillion US dollars in 2006, China's GDP has registered an average annual growth rate of 9.7% for nearly 30 years. In 2007, China's GDP totaled 3.3 trillion US dollars, ranking third in the world. People's living standard keeps improving. The per capita GDP has grown from 226 US dollars to 2,100 US dollars over the past 30 years, and 228 million rural residents have been lifted out of poverty.

Nevertheless, China is still a developing country. We are the most populous nation in the world. Our economic foundation is weak. Our development is unbalanced. There are still 23 million Chinese living in absolute poverty and 100 million living on less than a US dollar a day.

Therefore, it is always the central task for China to push for economic and social development and improve the living standard. Achieving modernization and moderate development in China will require over a dozen generations of Chinese to work really hard.

China pursues peaceful development. According to this strategy, China will seek development through its own efforts and through reform and innovation while staying open to the world; China will strive for a peaceful international environment for its development while promoting world peace through its development; China will engage the world in equal and mutually-beneficial exchanges and cooperation for win-win results and common development.

China's total trade volume was 2.17 trillion US dollars in 2007, with import total reaching over 955 billion. As China continues to strengthen macro-regulation, deepen reform and opening-up and expand domestic demand, our economy is expected to sustain steady growth. Our import total is expected to break through the one-trillion line this year and exceed 1.2 trillion US dollars in 2010. This will create enormous opportunities for mutually-beneficial cooperation between China and the whole world, the United States included.

China's future is increasingly associated with that of the world. China cannot develop in isolation from the rest of the world, and the world needs China if it is to attain prosperity and stability. By following the path of peaceful development, China will build better lives for its own people and contribute to the common development of the world. This serves not only the fundamental interests of the Chinese people, but also the shared interests of people of the whole world.

Ladies and Gentlemen, This year is the 30th anniversary of the signing of the Sino-US Communiqu� on the Establishment of Diplomatic Relationship. Despite twists and turns over the past three decades, China-US relationship on the whole has moved forward. Cooperation is the dominating feature of our bilateral relationship.

The Chinese Government attaches great importance to China-US relationship. We are committed to developing long-term, friendly and cooperative relations with the United States on the basis of the principles of the three Sino-US Joint Communiqu�s. Thanks to the concerted efforts of both our countries, our relationship has been developing steadily in recent years and become one of the most important bilateral relationships in the world.

First, the definition of the bilateral relationship is clear-cut. In April 2006, President Hu Jintao paid a successful visit to the United States and reached a new and important common understanding with President Bush on advancing the constructive and cooperative China-US relationship in the 21 century in an all round way. They agreed that China and the United States share broad and important strategic interests and are constructive partners as well as stakeholders. This clearly defines China-US relationship.

Second, this relationship has an increasingly strategic dimension and global significance. Recent years have seen greater and increasingly frequent interactions between China and the United States on global issues. We have converging interests and broad areas for cooperation on many issues affecting our world today, from terrorism, proliferation, regional hot spots, transnational crimes, non-traditional security threats, to energy security, climate change, disease control and prevention, and disaster mitigation and relief. We also work together to safeguard and promote peace, stability and prosperity in Asia-Pacific region and the rest of the world through our close and effective consultation and dialogues on important international and regional issues such as the North Korea nuclear issue, the Iran nuclear program, the Darfur issue of Sudan, Myanmar, Pakistan and the Middle East.

Third, there are fast growing exchanges and cooperation between our two countries in all fields. In 2007, China-US trade hit a new record of 302.08 billion dollars, which was over 120 times as much as the trade total when our countries established diplomatic relationship in 1979. Now, China is America's second largest trading partner and vice versa. China is the third largest and fastest growing market for US exports while the US is China's second largest export market and sixth largest source of import. From 2000 to 2007, US total goods export increased by 44%. Its export to China alone grew by 301% in the same period. By February 2008, US actual investment in China had exceeded 57 billion US dollars, funding a total of 55,130 projects. At the same time, direct investment from China in the United States also continues to increase.

There are 35 pairs of sister provinces/states and 131 pairs of sister cities between us. Last year, over 2.3 million people traveled between China and the US, which means that, on average, over 6,000 people fly across the Pacific every day. There are over 80,000 Chinese students in the United States and over 15,000 American students in China. Nearly 1,000 universities and 200 middle and elementary schools in the US are offering Chinese classes, and over 40 Confucius institutes have been established in the United States.

Fourth, we have established effective bilateral dialogue mechanisms, such as the Strategic Economic Dialogue (SED) and the Strategic Dialogue, and we have had three SED sessions and five rounds of Strategic Dialogue. These mechanisms provide important platforms for strategic and in-depth talks between our two countries in both the economic and political fields. Between China's National People's Congress and the US Senate and House of Representatives, exchange mechanisms are also established and enable continued and in-depth dialogues between our lawmakers. In addition, there are more than 60 other bilateral working mechanisms, covering political, economic, military, law enforcement, science and technology, education, energy, environmental protection and civil aviation.

Ladies and Gentlemen, China and the United States have different historical backgrounds, cultural heritages and social systems. It is only natural that we may sometimes see things differently. The key to addressing our differences lies in mutual respect, equality, seeking common grounds and taking a strategic approach. We should always abide by the principles of the three Sino-US Joint Communiqu�s, respect and accommodate each other's concerns, and prevent single-issue politics from hijacking our bilateral relationship.

I know that people are watching issues such as trade, IPR protection and product safety. The protectionist sentiments and the tendency to politicize trade issues, especially the over 50 China-related protectionist bills in the US Congress, are a cause of grave concern to us. If the trade issues are not handled appropriately, there will be serious damages to the interests of both China and the United States.

One must recognize that mutually beneficial and win-win cooperation is the dominant feature of the economic and trade ties between our two countries. Given the fast development, scale and scope of our trade ties, issues and frictions are hardly avoidable. We should give full play to SED, the Joint Commission on Commerce and Trade, the Joint Economic Commission and the Joint Science and Technology Commission, and seek to address trade issues through dialogues on an equal footing and good-will consultation.

Last week, US Treasury Secretary Paulson visited China as the special representative of President Bush. He and his Chinese counterpart exchanged views on SED and other relevant issues in the bilateral relations. In June, the 4th round of SED will be held in the United States. President Hu Jintao of China will send his special representative, Vice Premier Wang Qishan, to co-chair the meetings with Secretary Paulson.

China takes US trade concerns very seriously. We will continue to adopt vigorous measures to buy more from the United States, strengthen IPR protection, improve the currency exchange rate formulation mechanism, and ensure the quality and safety of Chinese products.

It is hoped that the US side will make corresponding efforts to abandon trade protectionist practice, relax the export control against China, and level the playing field for Chinese enterprises seeking to put their investment here in the United States. We hope the US side will work with us to safeguard our mutually beneficial and win-win economic and trade ties.

The Taiwan question is at the core of China's national interests. It involves the national pride of the 1.3 billion Chinese people, and is always the most important and most sensitive issue at the heart of China-U.S. relations.

The Chinese Government adheres to the basic guideline of "peaceful reunification and one country, two systems", and commits itself to promoting the peaceful development of the relationship between the two sides of the Taiwan Straits and the well-being of the people on both sides. We will make every effort to achieve anything that serves the interests of our Taiwan compatriots, contributes to the maintenance of peace in the Taiwan Straits region, and facilitates peaceful national reunification. But we will never allow the "independence" and secessionist forces to separate Taiwan from the motherland in any name or by any means.

We hope the US side will honor its commitments of adhering to the one China policy, abiding by the three Sino-US Joint Communiqu�s, and opposing "Taiwan independence", handle the Taiwan question appropriately, and take measures to block the road to "Taiwan independence" and safeguard the peace and stability in the Taiwan Straits and the shared interests of China and the United States.

There will be great opportunities for China-US relationship to make further progress in the future. There are also a number of challenges. I believe that as long as our two countries approach our bilateral relations from the strategic height, take real steps to translate into action the important consensus of our leaders, strengthen exchanges at the high level and enhance strategic dialogue and cooperation in all areas, respect and accommodate each other's concerns and properly handle differences, we will surely continue to advance the constructive and cooperative China-US relationship.

Ladies and Gentlemen, The ties between China and the State of Illinois are an indispensable part of China-US relations. I am pleased to note that the State of Illinois has increasingly substantial exchanges and cooperation with China. The State has a sister relationship with Liaoning Province of China, and Peoria and Benxi of Liaoning Province are sister cities. The Government of Illinois has established a trade representative office in Shanghai, China.

Trade between Illinois and China has been growing in recent years. The export from Illinois to China was near 2 billion US dollars in 2007, which was 28.8% more than the previous year. Between 2000 and 2007, the total export of Illinois increased by 51% and its export to China increased by 267%. China is now the 8th largest export market for Illinois.

Half of the Fortune 500 companies located in Illinois have business ties with China. Companies like Motorola, McDonald's and Caterpillar have found their business in China growing fast, bring rewarding profits and helping to create job opportunities back home. More and more Chinese companies are vigorously seeking investment opportunities in Illinois. One of them is Wanxiang American Corporation, which has chosen Illinois to be the home of its American headquarters and contributed to the economic growth here in Illinois. In addition, over 4,000 Chinese students are studying in the universities here in this state. They are, at the same time, envoys for cultural exchange between our two countries.

I am sure that as China's economy continues to grow and the economic and trade ties with the US continue to develop, we will have even closer exchanges and cooperation with Illinois and Peoria. This growing relationship will bring more opportunities to our business communities and more benefits to the peoples of our countries. Thank you.

(Note: To comment on Ambassador Wenzhong's speech, email your thoughts to mike@clnonline.com. To read previous entries in Kate's Collage, click on the titles in the right-hand column.)

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