Chief Economist David Mann,
Mr. Parag Khanna,
Ladies and Gentlemen,
It is a real delight to join you at the Standard Chartered Summit.
Today is the seventh day of the Chinese New Year. According to Chinese mythology, this is the birthday of human and is celebrated as the "Human Victory Festival". This festival embodies our best wishes for happiness and peace, and the respect for our own hard efforts.
I was asked by the Summit organizer to talk about China-UK financial cooperation in the context of the Belt and Road Initiative. In my view, there is no better day to talk about this subject because the Belt and Road Initiative reflects exactly people's aspiration for peace, tranquility and a beautiful life. It also embodies the hard efforts of all countries for common development and prosperity.
Cooperation under the framework of the Belt and Road Initiative creates win-win opportunities and offers great potential. China, the UK and all the countries willing to take advantage of this Initiative can engage in extensive consultation, work on projects together and share the benefits. Together, we can make this Initiative a joint endeavour that contributes to building a community with a shared future for mankind.
The Belt and Road Initiative was first proposed by President Xi four years ago in 2013. Since then, we have seen this Initiative gradually translated from a concept into actions, and from aspirations into reality.
It has been a remarkable success.
It is welcomed by an increasing number of countries.
It has been a contribution to world economic growth.
This is because the Belt and Road Initiative provides four major platforms.
First, it is a platform for win-win results.
The Belt and Road Initiative has been written into important resolutions of the UN General Assembly and the UN Security Council. Over 100 countries and international organizations have voiced their support and interest in participating in this Initiative, and over 80 countries and international organizations have signed cooperation agreements with China.
In May last year, the Belt and Road Forum for International Cooperation was successfully held in Beijing. At this Forum, participants from over 130 countries and over 70 international organizations shared their ideas on the Belt and Road development. A total of over 270 cooperation agreements were signed.
Such enthusiasm shows that this Initiative is bringing countries together in a joint endeavour to achieve development through cooperation and deliver inclusive economic globalization.
Second, the Belt and Road Initiative is a platform for open cooperation.
From 2014 to 2017, there has been a trade and investment boom along the Belt and Road.
There has also been a rich variety of financial cooperation between China and participating countries and organizations.
As of the end of 2017, the Asian Infrastructure Investment Bank (AIIB) had approved over $3.7 billion in financing for over 20 projects.
The Silk Road Fund had signed agreements on 17 projects, pledging $7 billion in investment.
These newly-established financial bodies effectively filled the gaps left by traditional financial institutions such as the World Bank. The new and old together can form a financial network that funds different needs at different levels and in different fields of the Belt and Road cooperation.
Third, the Belt and Road Initiative is a platform for mutual learning between different civilizations.
This Initiative carries on the ancient Silk Road spirit. It embodies the Oriental wisdom of inclusiveness and "harmony without uniformity". It is meant to cover an area that includes but is not limited to the ancient Silk Road.
This Initiative calls for cultural and people-to-people cooperation on multiple levels and in a wide range of areas. It encourages exchanges and cooperation in education, science and technology, culture, health, tourism and sports.
As of the end of 2017, there were 734 pairs of sister cities between China and 53 countries along the routes. Moreover, mutual visa exemption or visa-on-arrival arrangements were agreed between China and 20 countries along the routes.
When the Chinese people and people from other countries come together to work on the Belt and Road, the exchanges between them and their mutual understanding will deepen.
Fourth, the Belt and Road Initiative is a platform for joint decision making.
This Initiative has produced fruitful results over the past four years, because it represents the trend of the times and serves the people's interests. Such an Initiative will have broad prospects.
Here I want to emphasize that the Belt and Road Initiative is open, transparent and inclusive. It upholds the principles of extensive consultation, joint contribution and shared benefits. And it follows the market and international rules.
Through the Belt and Road cooperation, China is willing to share our development experience and growth benefits with other countries. But China will never interfere in other countries' internal affairs, or export our social system and development model.
In other words, China never intends to displace or exclude anyone.
What we want is China and the world developing together.
We hope to build a road of peace, prosperity, opening up and innovation, and a road that connects different civilizations.
And we hope to build a community with a shared future for mankind.
Ladies and gentlemen,
Three weeks ago, Prime Minister May paid a successful visit to China. During the visit, the leaders of our two countries agreed to build China-UK "Golden Era" 2.0.
As the "Golden Era" enters a new stage, I want to share with you my thoughts on how our two countries may enhance cooperation on the Belt and Road Initiative.
Over the past four years, the British public gained a better understanding of this Initiative. They are taking greater interest and having deeper participation in it. Our cooperation has produced fruitful results. This is reflected in the following six aspects:
First, our two countries have deepened political consensus.
The important consensus on expanding Belt and Road cooperation was reached during President Xi's state visit to the UK in October 2015.
Prime Minister May again fully recognized the global significance of this Initiative during her visit to China. She believed that the Initiative would create more opportunities for China-UK cooperation.
The leaders of the two countries shared the willingness to expand, elevate and deepen cooperation on this Initiative, with a view to promoting global and regional economic growth.
This political consensus charted the course for the Belt and Road cooperation between our two countries.
Second, China and the UK have deepened policy coordination.
President Xi said, the pursuit of the Belt and Road Initiative is not meant to reinvent the wheel; rather, it aims to complement the development strategies of countries involved by leveraging their comparative strengths.
In China-UK cooperation on the Belt and Road Initiative, China stands ready to match our policies with the development strategies of the UK, such as the Northern Powerhouse. If we can do this, we will achieve the multiplying effect.
At the ninth China-UK Economic and Financial Dialogue held at the end of 2017, the two countries reached 72 cooperation agreements on macro-economic policies and Belt and Road development.
Our two governments will have deeper exchanges and dialogue on the Belt and Road Initiative.
We will complement each other with our comparative strengths.
And we will work together to explore a third market along the routes.
Third, China and the UK have enhanced infrastructure connectivity.
Let me give you a few examples:
In 2017, China Railway Express ran its first freight train between China's Yiwu and London. This offered a new, on-land option for the movement of goods between China and Britain, opened the last mile of the China-Europe Express Railway and extended the "Belt and Road" to the very western end of Europe.
The Hinkley Point C nuclear power plant, which is a flagship project in China-UK cooperation, has entered into construction phase. And Hualong One technology has moved to the second stage of the generic design assessment.
The Royal Albert Dock project, with an investment of £1.7 billion from the ABP, is running smoothly.
The first sub-national cooperation park between the two countries, the China-UK Innovation Industrial Park in Qingdao, has started construction. It is expected to inject new vitality into China-UK cooperation at the sub-national level.
Fourth, China and the UK have increased bilateral trade and investment.
In 2017, bilateral trade reached $79.03 billion, with British export to China up by nearly 20%. This is clearly a good sign for the British goods in the Chinese market.
The UK is now the second largest trading partner of China in the EU, and China is the third largest trading partner of the UK.
As of the end of 2017, non-financial direct investment from China totaled $19.14 billion. Over 500 Chinese companies had set up businesses in the UK. Chinese investments are found mostly in high-end manufacturing, infrastructure, and research and development.
Fifth, China and the UK have expanded financial cooperation on the Belt and Road Initiative.
In this respect, the UK is leading other major Western countries.
It is the first major Western country to apply to join the AIIB, and the second country after China to contribute to an AIIB special fund.
It is also the first to approve and sign the Guiding Principles on Financing the Development of the Belt and Road.
It is the first to appoint a special envoy to the Belt and Road Initiative, and set up the Expert Board.
It has pledged £25 billion in support of Belt and Road projects in Asia.
And it joined China in announcing the establishment of a bilateral investment fund, with an initial capital injection of $1 billion, for projects involving both our two countries and a third market.
Sixth, China and the UK have built closer bond between the people of the two countries.
Closer bond between the people is key to enhancing state-to-state relations.
In recent years, the British culture shows enormous appeal to the Chinese public. And here in the UK, enthusiasm for learning the Chinese language is increasing.
Our two countries have carried out cooperation in a wide range of areas ranging from education to science, from health to cultural and people-to-people exchanges. The latter, in particular, is flourishing.
Currently there are 64 pairs of sister cities between our two countries. Mutual visits topped 1.5 million. This has helped gather public support for the Belt and Road Initiative.
The fruitful results of China-UK Belt and Road cooperation cannot be achieved without the members of the business community who have a strategic vision and a pioneering and innovative spirit. Standard Chartered is one extraordinary example.
During Prime Minister May's visit to China, Standard Chartered and the China Development Bank (CDB) signed an MOU, witnessed by Premier Li and Prime Minister May. This MOU will provide 10 billion RMB yuan to facilitate Belt and Road projects.
As we know, Standard Chartered has operations in 45 markets along the Belt and Road. In 2017 alone, Standard Chartered China was involved in over 50 deals relating to Belt and Road projects. The total value was over $10 billion.
By the end of 2020, Standard Chartered is expected to provide at least $20 billion in financial support for Belt and Road projects.
Here I would like to take this opportunity to express my appreciation to Standard Chartered for these contributions.
Ladies and gentlemen,
Looking ahead, China-UK cooperation on the Belt and Road hinges upon our financial cooperation and relies on the efforts of the business community.
Financial cooperation has been a priority, a highlight and a strong growth point between our two countries.
In recent years, Chinese banks have accelerated their exploration of the global market. In this process, many have chosen to secure a foothold in London. By now, seven Chinese banks have set up branches in Britain.
The People's Bank of China and the Bank of England also have close collaboration. They have co-chaired the G20 Green Finance Study Group and issued the China-UK Strategic Plan for Financial Services.
Cooperation on RMB internationalization is one of the highlights.
The British government issued the first RMB sovereign bond worth RMB 3 billion.
London was chosen by the Ministry of Finance of China to make its first overseas issuance of RMB sovereign bond, also worth RMB 3 billion.
This was followed by the issuance of the first Green Covered Bond in Britain by the Bank of China.
All these have made London one of the most vigorous RMB trading centres and offshore markets. London certainly has a significant role in RMB internationalization.
The year 2018 marks the 40th anniversary of China's reform and opening up. It is also the year to accelerate the China-UK "Golden Era".
In the new year, I hope both China and the UK will work together to take our Belt and Road cooperation and cooperation in the financial sector to a new stage by seizing the following four opportunities.
The first is the historic opportunity of China-UK "Golden Era" 2.0. To seize this opportunity, we need to match our policies.
Over the past years, financial cooperation between China and the UK started from scratch, continued to deepen and became a two-way endeavour. It has proven to be win-win for both sides.
During Prime Minister May's visit to China, the two countries signed business contracts worth £9.89 billion. These include the agreement to build a finance and technology park in Xiong'an, the new district to the south of Beijing. They are expected to create 2,666 jobs for Britain.
It is important that we make full use of inter-governmental dialogues at all levels to match our policies for the Belt and Road and financial cooperation.
We should encourage development and policy institutions to play a positive role in our financial cooperation. We should also encourage financial institutions to explore new areas and make plans for the future of our financial cooperation. We should enhance our cooperation on development financing. Together, we can contribute more "financial fruits" to the China-UK "Golden Era".
The second opportunity is the Belt and Road Initiative. This is a strategic opportunity for our two countries to advance business cooperation.
Belt and Road development creates a huge demand in not only investment and financing, but also services, such as agent banking relationships, syndicated loans, settlement and clearing.
Therefore, to advance the Belt and Road development, China encourages the establishment of financial services platforms in the countries along the routes.
The UK has rich experience in international finance and mature management expertise as well as close financial ties with many countries along the Belt and Road.
This paves the way for our two countries to work together to tap the British expertise in financing, PPP, insurance and green finance in support of infrastructure projects.
The banks of our two countries can seize this opportunity to deepen cross-border cooperation. This will in turn advance Belt and Road development and create new highlights in financial cooperation between our two countries.
The third opportunity is the continued opening up of the Chinese market.
At the 19th Party Congress, China decided to open its doors wider to the world.
As part of the opening-up efforts, China will open its financial sector steadily and actively. British financial corporations are encouraged to come and seize this opportunity and expand their business in China.
Last month, Standard Chartered received a lead underwriting license for overseas non-financial corporate Panda bonds. This is a fresh boost to the financial cooperation between China and the UK.
Our two countries have every reason to enhance exchanges and cooperation in asset management, banking, capital market, insurance and pensions. Building on these efforts, we can go on to lead the world in green finance, financial science and technology, and inclusive finance.
China plans to import $8 trillion of goods and open up a $600 billion market to foreign investment in the next five years starting from 2018. To the world of business, this means bigger market and more opportunities for cooperation.
This November, the first-ever China International Import Expo will be held in Shanghai. Companies from over 100 countries are expected to take part in this event. British companies, including Standard Chartered, are all welcome to this Expo to advertise your high-quality products and services.
The fourth opportunity lies in the internationalization of RMB.
China is determined to deepen financial reform, open its capital market wider to the world, and let the market play a bigger role in deciding the RMB exchange rate. These efforts will help advance RMB internationalization.
As a leading global financial centre, London has played an important role in supporting the RMB internationalization.
As I have just mentioned, China is steadily advancing the reform in RMB exchange rate to make it more responsive to the market. There is an opportunity here for our two countries to expand RMB cross-border business and encourage the use of RMB as a clearing currency in bilateral trade and investment.
It is also important that we further tap the role of the RMB clearing bank in the UK, and develop the offshore RMB market in London. Through these efforts, we will improve the connectivity between the financial markets of our two countries and achieve win-win results.
Ladies and gentlemen,
President Xi said in his Chinese New Year message, the New Year is a new beginning and promises new prospects.
This year is the Year of the Dog. In both China and the UK, dog is a symbol of diligence and loyalty.
I hope in the new year, friends from the financial sector of our two countries will join hands to take China-UK Belt and Road cooperation to a new high and to contribute your wisdom and strength to building the China-UK "Golden Era" 2.0!
In conclusion, I wish everyone present a happy and prosperous Year of the Dog!