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Consul General Mme. LU Xu's Keynote Speech Bennett Jones Lake Louise World Cup Business Forum
2018/11/28

Consul General Mme. LU Xu's Keynote Speech

Bennett Jones Lake Louise World Cup Business Forum

(November 23, 2018)

Chair Mr. Spitznagel,

Ladies and gentlemen,

Good morning!

First, please allow me to extend my sincere thanks to Bennett Jones for the invitation and the wonderful arrangements of the forum as well as the hospitality we have received since yesterday.

Today I am dressed up in green, just to pay tribute to the heaven on earth. The beauty of Lake Louise and the best sports facilities attract numerous tourists and world-class athletes, including those from China. The other day when I ran a keyword search for "Lake Louise" on Alibaba, I was not surprised to learn that it has become a hot spot for the Chinese to come. This is a perfect example of how the world dynamics are influencing the lives of people. It's hard to imagine that 10 years ago, or even 5, without leaving their homes, people were able to nail their dream destinations or things they want to do.

"Change" is not only a typical trait of today's world, but also employed as a favorable election stunt. The theme of this year's forum is very timely, with an interesting subtitle of 3Ts. However, I decided not to talk about the second T, to avoid creating a mood that may trigger a replay of what has happened during the recent APEC forum,which will properly put our dear host at a tight corner.

What exactly is the world like in transition? There are 4 elements I would like to talk about.

First, emerging markets and developing countries are rising in groups, gradually changing the global power structure and becoming a new world reality. The evidence lies in facts that the combined population of these entities has been 80% of the world population; their economic aggregate is over 50% of the world total; and they are still having great potential to explore. It will work for the long-term interests of those who adapt to such a new scenario as quickly as possible.

Secondly, the intertwining of the world economic downturn and the frequent technology updates further enlarge the gap between the rich and the poor, and eventually make it harder to realize a more comprehensive, sustainable development with high quality. Talking about factors blocking the recovery and prosperity of the world economy, there are 2 that need us to pay attention to: protectionism, as well as the financial fragility. In the meantime, the world is entering a new era of the Fourth Industrial Revolution, featuring artificial intelligence, robots, big data, the blockchain, which is only half a century away from its previous phase. Those hopping onto the trend will benefit from its momentum, while those lagging behind will be knocked out.

Thirdly, big powers are progressively in transit from a reciprocal state to a competitive mentality. As various disputes are on the rise, the status quo can be summarized as "allies are no longer friends and foes are worth deeper hatred". The underlying reason for this is that something has gone wrong regarding people’s outlook on the world and diplomatic orientation.

Fourthly, the spirit of the UN charter is now being challenged and the WTO clauses are being discarded. The rule-based international order on which nations once relied is being disrupted. The consensus of multilateralism and win-win collaboration is on the edge of displacement by unilateralism and extremism. If the international community chooses to let it go, it may drag human history into the tragedy again.

Ladies and gentlemen,

There is no end to the road of reform and transformation. In the face of the world in transition, what is China's coping strategy?

On one hand, China is going to stick to the reform and opening-up policy, and try to take the opportunities of the Fourth Industrial Revolution. On the other hand, it will focus on building a new model of international partnership with mutual respect and and win-win cooperation as a core, devote itself to form a community of shared future, continue to be a contributor to the world economy and an upholder of the world order and the economic globalization. Simultaneously, it will properly handle the frictions and contradictions with other countries.

In terms of reform and opening-up, China will focus on the financial, telecommunications, medical, education, and pension sectors, further relax or even eliminate restrictions on the share ratio of foreign capital in banking, securities, funds, and futures, and further advance trade liberalization. This year, China slashed tariffs on products like automobiles, pharmaceuticals, and textiles, down to 7.5% from 9.8% last year. It has granted 97% tariff exemption to least developed countries, and in turn, became the largest market of exports for these countries.

On the front of innovation, China's digital economy was nearly $4 trillion in 2017, equal to one-third of the GDP. China will put more weight on it. Two months ago, the Chinese government announced it would fund the digital economy with $15 billion.

As for intellectual property protection, China has received the world's largest patent application in number. Not long ago, China set up specialized intellectual property courts to protect the rights and interests of companies. Mandatory technology transfer has never been allowed, neither has foreign investment been approved on the premise of technology transfer.

On how China is integrating with the world, I have here examples in "ABC" .

A means AIIB, Asian Infrastructure Investment Bank. Since its establishment in 2016, AIIB has reached the capital volume of $100 billion with 87 members.

B indicates the Belt & Road Initiative. In the five years since the "B & R Initiative" was proposed, trade in goods between China and relevant countries has exceeded $5 trillion. Direct Chinese investment in B & R countries was over $60 billion, which strongly propelled the growth of international FDI.

C is for CIIE, the China International Import Expo. Two weeks ago, the first CIIE was successfully unveiled in Shanghai, attracting over 3600 enterprises from more than 150 countries. The turnover intention reached $57.8 billion. About 56 Canadian businesses promoted themselves at the Expo among which 13 were from Alberta. In the next 15 years, China will import $40 trillion of goods and services, and will hold the CIIE annually from now on. As a big fan of Albertan beef, I do hope to see more of it being served on the table of the Chinese families.

Ladies and gentlemen,

This year marks the 40th anniversary of China's reform and opening-up. With a 230 times increase in GDP, an 800 times rise in imports and exports volume, China has become the biggest trade partner for over 130 countries. More than 400 million Chinese are now in the middle class. China has contributed more than 30% to the world economic growth for many years.

What makes China so successful? I think the following elements are playing crucial roles in this regard.

First, the model of socialist collaboration is more effective than the model of work division and market transactions. It enables the government to regulate or redirect through policies with long-term versions, and to win the cooperation and support from all parties involved. As a result, major projects can be done efficiently by joined forces.

Second, the hard-working Chinese workers create miracles of China's economy. Mr. Steven Jobs once had a interesting description in this regard. He said, if overtime is necessary for a project, Chinese workers can be assembled in place within 24 hours, whereas their US peers will need 9 months. A photo of Chinese workers was once featured on a cover of the Time Magazine as the People of the Year, with a footnote saying they led the world out of the 2008 economic crisis.

Third, the comprehensive domestic industrial system and independent foreign policies enable China not to rely on others, being secure against pressure at all times and allowing the Country to proceed without interruptions.

Fourth, the Chinese have the courage to learn from the best without being judgmental on ideology disparities. While many countries were still boxing themselves in the Cold War thinking, China has put aside the ideological argument, and embraced the world with its open arms.

The ongoing trade dispute is sure to have negative impacts on China's economic development, but the impact is manageable. China's GDP was $10 trillion in the first three quarters of this year, which means 6.7% year-on-year growth. China's exports in the first three quarters of this year reached $2 trillion, which translates into 6.5% year-on-year growth. Recently, many people think that the Chinese economy is going downhill as its PMI has been falling to a new low of more than two years and believe the trade war started to bring significant consequences. Apparently, it is due to the failure to understand China's economic working mechanism.

Ladies and gentlemen,

History tells us that when standing at the intersection of times, human beings can achieve progress and prosperity only by holding and supporting each other, properly dealing with disagreements. If one chooses to achieve his own goal at the expense of poverty and insecurity of others, he will, in turn, jeopardize his own future. In the face of the profound transition of the world, countries should go with the trend, be responsible, actively conduct self-reform instead of scapegoating others, take challenges as opportunities, and build the bright and prosperous future of the world together.

Thank you very much for your attention and enjoy the rest of the presentations.

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