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2011-07-29 08:56

Mr. Jim Harrowell, President of ACBC New South Wales Chapter,

Distinguished Guests, Ladies and Gentleman:

Good evening!

It is my great honor to be invited to attend today's function.

With members being the cream of the business community in New South Wales, ACBC New South Wales Chapter has, for a long time, made strong commitment and devotion in promoting business ties and friendly exchanges in across the areas between China and Australia, and the state of New South Wales in particular. You've achieved a great deal with hard work.It has been only four months since I came to Sydney, what struck my most is the growing attention and interests from the Australian political, business, academic and press communities in China.

I am very happy today to share with you about the current economic situation and the prospects of China-Australia business cooperation.

In the past five years, China withstood a series of challenges that were never seen before, the global financial crisis and the Wenchuan earthquake and the list goes on. But we did manage to achieve an annual growth rate of 11.2% in the country's GDP, with income of both urban and rural households substantially raised, and the restructuring of the nation's economy furthered. By doing all these, China has made important contribution to the recovery of the world economy.

Meanwhile, we are also aware of the problems we are facing in our economic development, such as the irrationality of the economic structure, the inefficient and extensive pattern of economic growth. Therefore, in China's "12th Five Year Plan" of the National Economic and Social Development that was approved by the National People's Congress early this year, scientific development and the expedited transformation of the economic development mode were highlighted as two leading priorities in designing the blueprint of China's economic development in the next five years.

China will endeavor to maintain steady and relatively fast economic development. An average annual GDP growth rate of 7% is set for the next five years, which represents an important shift in China's orientation in its social-economic development, that is, from the sheer pursuit of the rapid growth in the size of the economy toward placing more emphasis on the growth of the income of average households.

Statistics show that while China's GDP only accounts for less than 10% of the world's total, it consumes one third of, if not more, the steel, cement, coal, non-ferrous metal and other resources in the world, which also resulted in great pressure on the environment. Therefore, we believe if we moderately slow down the pace and improve the quality and standard of our development, it will better serve the long-term sustainability of the social-economic development in China.China is now the second largest economy in the world, and 7% is not at all a low rate of growth. The point now, is the quality and efficiency of the growth.

Recently, there have been some ongoing worries about China missing the good opportunity to curb its inflation and the nation's economy might have a hard-landing. I believe these concerns are not well-founded. As we all know, the rapid growing prices of bulk stocks, food and oil in particular, are not only affecting China, but countries around the world. Traditionally low inflation countries like those in Europe and North America, are also experiencing 2% to 3% inflation this year.

China's CPI rose by 6.4% on a year-on-year basis in June. However, the pressure of price hikes has been brought under control. If we look at China's industry growth rate, especially three major index, that is, energy consumption, freight volumes and fiscal revenue, we can see that for the first six months of this year, these figures have been on stable increase, which demonstrates a good momentum of growth of China's economy.

Apart from that, China's foreign trade is still growing, notwithstanding gradual easing in the growth rates of the nation's exports and imports. It is the result of the proactive macro-management measures that we took in expanding domestic demand and reducing our reliance on overseas markets.

Ladies and Gentlemen,

China is the largest developing country with a population of 1.3 billion. The per capital consumption level in China is still low, with large gaps of development among the urban and rural areas and different geographic areas. But for a long time to come, China will continue to undergo fast industrialization and urbanization. And this will definitely expand our domestic demand and support the long-term steady and relatively fast development of the nation's economy.

In 2009, China's urbanization rate is 46.6%. According to the "12th Five Year Plan", China's urbanization rate will reach 51.5% by 2015, which represents an annual growth of 0.8%. Compared with the urbanization rate of most developed countries, which is around 80%, China's figure is still quite low, but this means great potential as well.

Meanwhile, in the next Five Years, we will also modify the distribution structure of national income, and improve the public services system. By taking these measures, we are aiming at removing more institutional and systematic barriers in the way of domestic demand expansion. In the 12th Five Year Plan, the service sector was given strategic importance in the upgrading and optimization of China's industrial structure.

Today, the growth of service industry has profound influence in the economic development of all countries and has become an important factor in measuring a country's international competitiveness. Statistics show that in developed countries, the added value created by the service industries accounts for 70% of the GDP of the country on average. In most developing countries, the figure is around 50%. While China's service sector only takes up to 43.3% at the end of the 11th Five Year Plan, which quite lagged behind.

When a country's per capita national income reaches the level of a medium developed country, there will be dramatic increase in its people's spending in purchasing services. And China will soon enter this new stage, where the consumption structure will undergo changes and upgrades. Therefore, the need to advance the service industries such as telecommunication, tourism, medical and health services, culture and entertainment is just pressing. In the long run, the service sector will also be the key in China's effort to narrow down rural-urban gaps, transfer surplus rural labor force and improve people's livelihood.

The 12th Five Year Plan states that China will expedite the development of producer services and consumer services at the same time. To this end, we will further open up services sectors like finance, insurance, telecommunication, tourism and etc. to foreign investors and service providers, and accelerate the pace of developing modern service industries. We will "welcome and encourage all sorts of capital to invest in service sector, and the development of service enterprises under different types of ownership." China's service import will also maintain balanced growth. In the next five years, the total value will be over 1.25 trillion US dollars.

Ladies and Gentlemen,

Currently, the China-Australia relations are in good shape. Our leaders maintained frequent contacts. Our bilateral trade and investment cooperation is strong. And the cultural exchanges are increasingly vibrant. This April, Mr. Jia Qinglin, Chairman of Standing Committee of Chinese People's Political Consultative Conference paid a successful visit to Australia, and Prime Minister Julia Gillard also visited China. Our mutual understanding and mutual trust are further enhanced, which added fresh impetus to our in-depth cooperation in business and all other areas.

It is especially encouraging to see that developing comprehensive and practical cooperation with China as become a consensus of all walks of life in Australia. And it is especially so in the state of New South Wales.

In 2010, New South Wales' trade with China reached 23 billion Australian dollars, which grew by 13% on the previous year's basis. Now, major commercial banks of China, like the Bank of China, and four major Chinese airline companies have all opened branches or offices in Sydney. New South Wales' mature business environment, and friendly multi-cultural society are attracting more and more competent Chinese companies to start business here. The New South Wales Australian Chinese community and tens of thousands of Chinese students as well as scholars are providing rich social resources and potential to our cooperation in business and many other areas. Just last week, Premier Barry O'Farrell and his business delegation successfully visited Beijing, Shanghai, Guangdong and Hong Kong. The team had in-depth discussions about potentials of mutually beneficial cooperation with related entities in china. It is indeed a fruitful visit.

The differences that exits in the development levels, economic structures and resource endowments of China and Australia, as well as New South Wales, makes our economies highly complimentary to each other. As I said earlier today, China's implementation of the 12th Five Year Plan will release huge demand for investment and consumption.

The Australian Government as well as the New South Wales Government's commitment to developing economy also brings great business opportunities for business communities in our two countries. I believe there are great prospects and potential for our future cooperation. In this respect, I would like to share with you the following observations:

Firstly, we shall move forward with liberalization and facilitation of trade and investment. China and Australia are important trade and investment partners to each other. Yet China's investment accounted for less than two percent (2%) of total foreign investment in Australia, which does not match China's status as Australia's largest trading partner.

As more and more Chinese companies come to Australia to invest, there seems to be some concerns about Chinese investment being too much and growing too fast. I personally believe such worries are not at all necessary. For one thing, we all know the evolution of many countries' business ties with Australia all follow the pattern of trade to investment, then to a closer and comprehensive business partnership.

In case of China, there won't be any difference. For another, Chinese companies investing here in Australia, including those state-owned companies, all abide by Australian laws and regulations, and follow the rules of market economy, and they work hard to profit for their shareholders. So there is no difference in nature between Chinese companies and companies of other countries. The favorable investment environment in New South Wales and its prime location and industrial structure are very attractive to Chinese companies. Premier O'Farrell has explicitly expressed the wish to make New South Wales an ideal place for incoming foreign investments. And I believe that the Chinese companies have no reason to miss the opportunities.

Secondly, we need to promote the cooperation in infrastructure industry as a new growth point. In the coming five years, Chinese companies will speed up "going overseas". The Chinese government encourages and supports those companies with real strengths and good reputation to invest overseas including in Australia, participating in infrastructure building, such as transportation, telecommunication and energy. The Chinese government also encourages these companies to actively fulfill their corporate responsibility and benefit the local communities.

The new round of mining boom in Australia, the building of the National Broadband Network, together with New South Wales' development of a new financial service center and the building of new railways are releasing great demand for the infrastructure industry. In these areas, Chinese companies have rich experience and technologies. There are broad prospects for companies both Chinese and Australian to work together.

At the same time, we also welcome Australian companies to invest in China's infrastructure projects, especially in China's Middle and Western regions.

Thirdly, we should make service sector a new potential ground for our cooperation. Australia has a strong service sector. Education, tourism, finance, urban planning, architecture design industries in New South Wales are also very competitive. In 2010, China for the first time in history became the largest service export market for Australia. Last year, over 545,000 Chinese tourists visited Australia, which increased by 20.61% compared with the previous year. Currently, there are over 130,000 Chinese students studying in Australia. China has become Australia's largest source of international students and fastest growing source of international tourists.

We would also encourage Chinese and Australian companies to further deepen their exchanges and cooperation in areas like medical, public health, food safety, finance, insurance, tourism and many more.

Fourthly, we need to further our cooperation in the traditional sectors. Mineral products serves as an important basis of our bilateral trade. During the process of further industrialization and urbanization, China will continue to maintain a substantial demand for energy and mineral resources. Australia is richly endowed in natural resources. Prime Minister Julia Gillard and other Australian leaders made it very clear on various occasions that Australia is willing to become a long-term and stable supplier of mineral resources for China. At the same time, we have got unlimited potentials in many other areas. The production and export of agricultural products has an important role in New South Wales' economy. China has a large population. With its economic development and the rising of people's living standard, China's demand for meats, diary, wool and other primary products will keep growing.

Ladies and Gentlemen,

President Hu Jintao of China pointed out in one of his recent speeches that China's fast development in the past three decades relies on the policy of reform and opening-up. China's development in the future will also firmly rely on reform and opening-up. China will unswervingly follow the road of peaceful development and uphold a mutually-beneficial and win-win opening-up strategy in strengthening its cooperation with other countries and continue to promote common prosperity of the world.

I believe the business communities in our respective countries are the main players in strengthening our trade and investment bonds and links in many areas, which will be beneficial to our peoples of the two countries. I sincerely hope our entrepreneurs will seize the opportunities as they arise, and by working together further strengthen mutual understanding and expand cooperation. I myself and the Chinese Consulate General in Sydney,are always ready to work with all of you to bring the comprehensive cooperation between China and Australia to a new level.

Thank you for your attention.


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