Speech at the "Europe and China" Strategic Dialogue
by H.E. Ambassador Song Zhe,
Head of the Mission of the People's Republic of China to the European Union
May 19, 2009
Commissoner Waldner, Secretary General Merritt, Ladies and Gentlemen, Friends,
In a few hours, I'll leave for Prague for the 11th China-EU summit. But I am very happy that, before taking part in tomorrow's high-level political dialogue, I am able to join you for this academic strategic dialogue.
I think no discussions nowadays can stay away from the financial crisis. Our economy suffers from its impact, so does our society.
For the first quarter of the year, China's GDP growth was at 6.1%, much lower than the double-digit rate for the past decades. China's foreign trade dropped by nearly 25%. Many export-oriented enterprises are now in great difficulty.
The EU economy, on the other hand, will contract by 4% this year, as estimated by the Commission, while unemployment will rise to 10.9%, amounting to 8.5 million people.
All statesmen, entrepreneurs and scholars are watching closely on the dynamics of the world economy and the rescue actions taken by other economies. We all hope that the economy will hit bottom and turn around quickly. We all fear that a prolonged recession might incur social contention, political strife and even international conflicts.
But the crisis will not fade away if we sit idle. We ought to take decisive actions and effective measures. We ought to have closer coordination and stronger cooperation.
Last December, the EU launched a 200 billion euros stimulus plan, which was followed by many national plans from the member states.
China adopted a series of forceful measures since the second half of last year, which developed into a stimulus package that was aimed at ensuring economic growth, people's welfare and social stability.
To expand demand, the government took the lead to increase investment and cut tax, and the total investment was planned at 586 billion US dollars. To optimize supply, ten major industries are undergoing restructuring and upgrading. To improve production, technological innovation is encouraged by heavy investment in R&D capacity-building. To sustain growth, social security benchmarks have been raised, and employment will be expanded.
This policy package is producing effects. There are already some positive signs of economic rebound. Investment keeps growing. For the first four months, fixed asset investment went up by more than 30%. Consumption keeps growing. In April, retail expanded by nearly 15%. Housing sale is getting up. Moreover, China has become the largest car market in the world. 1.15 million new cars went on China's roads in April alone. Production keeps growing. Industrial growth was at 7.3% in April, a few points higher than the beginning of the year. Confidence keeps growing. The Manufacturing PMI hit 53.5% in April, recording a five-month consecutive growth. In general, the trend of China's economy towards growth and expansion has not changed. The economic fundamentals remain solid.
Meanwhile, China has taken an active part in the global effort to confront the crisis. China is determined to tide over the hard time hand in hand with the international community.
Last October, when China hosted the 7th Asia-Euope Summit, we modified the agenda to slot more time to discussions on financial crisis, which produced extensive and important consensus.
On Washington and London G20 summits, President Hu Jintao expounded China's views and positions on confronting the crisis and reforming the international financial institutions, with an emphasis on strengthening supervision, opposing protectionism and protecting the developing countries.
By presenting both ideas and actions, China contributed to a coordinated global response to the crisis, and helped boost the confidence on an early economic recovery.
In face of this storming crisis, China and Europe hold hands even tighter.
Early this year, the Journey of Confidence by Chinese Premier Wen Jiabao anchored our joint effort to fight the crisis.
It was followed by a trip of China's trade and investment delegation, who signed 13.6 billion US dollar worth contracts with European companies.
Ten days ago, we had a successful Second High-level Economic and Trade Dialogue, where we agreed to oppose protectionism, increase mutual investment, support the development of medium and small size enterprises, promote bilateral cooperation on energy, environment, climate change and sustainable development.