Mr. Alain Papiasse,

Mrs. Anne Verstraeten,

Ladies and Gentlemen:

Good afternoon!

It is a real delight to join you at the Global Markets Conference 2019 held by BNP Paribas. This Conference is highly timely as it focuses on the global financial market and explore opportunities for future development.

I was asked by the Conference to talk about China’s economy. So I would like to share with you my thoughts about China’s economic prospect and how to seize the opportunities that China has to offer.

First, how shall we view China’s economic prospect?

The world is now undergoing profound changes unseen in a century. How we choose between openness and isolation, between cooperation and confrontation, between win-win and zero-sum game will determine the direction of world economic development.

Due to surging protectionism, rising uncertainties and disturbing instabilities in the world economy, the IMF forecast for growth this year is only 3%, the lowest since the international financial crisis in 2008.

Against this backdrop, China’s economy, the world’s second largest, has withstood the test of storms and maintained a steadily growing momentum. In my opinion, there are four highlights in China’s economy.

The first highlight is steady growth.

China’s economy has enjoyed rapid growth at an average rate of 9.4% for 40 years since the beginning of reform and opening up. In the first three quarters of this year,

• China’s GDP reached about 10 trillion dollars, increasing by 6.2% year-on-year. That was one of the fastest among major economies in the world.
• Close to 11 million jobs were created, and average disposable income increased by 6.1% in real terms. Economic growth has brought tangible benefits and given our people a strong sense of achievement.
• Paid-in foreign investment exceeded 100 billion dollars, increasing by 6.5% year-on-year. On average, more than 100 foreign-owned companies are opened in China every day.

The second highlight is high quality.

The quality of China’s economic growth has been improved.

• Domestic demand has become the primary driving force for economic growth. In the first three quarters of this year, final consumption contributed 60.5% of economic growth.
• Economic growth generates more jobs. It is estimated that every one percentage point of GDP growth creates about 2.06 million new jobs. That is twice the figure ten years ago.

China’s economic growth has also been greener. President Xi Jinping said, “Clear waters and green mountains are as valuable as mountains of gold and silver.” China has achieved remarkable success in green development.

• In 2018, China’s Carbon intensity dropped by 45.8% compared with 2005.
• Energy consumption per unit GDP has been brought down by 20.3% in the past five years.
• The use of coal has been cut down to an unprecedented level of less than 60% of overall energy consumption.
• China is now the world’s largest investor in renewable energy.

The third highlight is huge potential.

President Xi Jinping said, “The Chinese economy is not a pond, but an ocean.”

China has

• close to 1.4 billion people,
• 900 million workforce,
• 170 million well-educated and skilled talent pool,
• more than 400 million middle-income earners,
• and more than 100 million market entities.

These mean a huge market, a high-quality talent pool and tremendous vitality.

China ranks second in the world in terms of R&D expenditure. In 2018, scientific and technological progress contributed 58.5% of economic growth. According to the World Bank’s Doing Business 2020 report released last month, China’s “ease of doing business” ranking has risen from 46 to 31.

The fourth highlight is great contribution.

China’s economy has benefited people from both China and beyond.

In the past 70 years since the founding of the People’s Republic of China,

• Chinese people’s living standard has kept improving.
• Per capita GDP has grown by 70 times in real terms.
• Average life expectancy has increased from 35 to 77.
• More than 700 million people have been lifted out of poverty, which accounts for more than 70% of the global poverty reduction.

At the same time,

• China has contributed about 30% of world economic growth, ranking first for 13 years in a row and more than the US, the EU and Japan combined.
• In the past six years since the Belt and Road Initiative was proposed, China has invested more than 100 billion dollars in countries along the routes, added 4.09 billion dollars to the tax revenue of host countries, and created 367 thousand jobs for local communities.
• China has taken the initiative to open its market to the world by way of but not limited to the China International Import Expo (CIIE). At the second CIIE concluded three days ago, 71.13 billion dollars worth of purchasing deals were initialed. That was 23% more than deals signed during the first CIIE a year ago.
• In the next 15 years, China is expected to import more than 30 trillion dollars of goods and more than 10 trillion dollars of services.

Now I would like to talk about the opportunities that China’s growth will create for China-UK and China-EU cooperation.

Two weeks ago, the fourth plenary session of the 19th Central Committee of the Communist Party of China was successfully held. The session adopted the decision on major issues concerning upholding and improving the system of socialism with Chinese characteristics and advancing the modernisation of China’s system and capacity for governance. This decision rolls out a number of important measures for deeper reform and further opening up.

At the opening ceremony of the second CIIE nine days ago, President Xi Jinping delivered an important speech. “Opening up” was mentioned 24 times in his speech, which sent a loud and clear message that China will open its door wider to the world. It also calls on all the countries to work together and build an open world economy through cooperation, with innovation and for mutual benefit.

Going forward, China will remain committed to the path of socialism with Chinese characteristics, and continue to contribute to world peace, development, prosperity and progress. China will also promote reform, development and innovation through a higher level of opening up.

I would say that “opening up” is the key word for China’s economic development in the future. An open China will create three important opportunities for the UK and the EU.

The first opportunity comes from open cooperation.

Consultation and cooperation are the right way to address frictions and differences over trade. China, the UK and the EU have the same belief and common interests in safeguarding multilateralism and supporting globalisation. It is important that we join hands to uphold the multilateral trade system, oppose protectionism, and promote the building of an open world economy.

China will open its market wider, put more emphasis on import, and foster a market-oriented and law-based business environment that is in line with international practice. The Foreign Investment Law will come into force on 1st January 2020. The opening up of the financial sector will be accelerated.

• China will abolish completely the business scope restrictions on foreign financial institutions in China such as banks, securities firms and fund management companies.
• China will remove the limits on investment and shareholding in foreign banks and insurance institutions.
• And China will allow foreign insurance groups to set up insurance institutions.

All these will create new opportunities and open new space for China-UK and China-EU financial cooperation.

As China continues to open its market wider, China hopes that other countries will, likewise, adopt an open attitude on cooperation, and foster a fair and non-discriminatory environment for Chinese companies, such as Huawei, to do business there. This will contribute to win-win results.

The second opportunity arises from innovation.

The surging waves of a new round of scientific and technological revolution and industrial transformation will have a deep impact on the production models and life style of mankind.

China, the UK and the EU have respective advantages in science, technology and innovation. We should work together to seize the opportunities brought by the wide application of digital technology, internet and smart technology. We should embrace innovation with a more open attitude and explore new driving forces for growth.

New technologies are also bringing deeper changes to the financial sector. China, the UK and the EU are active in FinTech innovation. We all have a huge market and a strong growth momentum in this area. We could enhance cooperation on innovation in block chain, inclusive finance and green finance. This could improve the scope, depth and quality of our financial services, and boost our cooperation on economy and trade.

The third opportunity comes from shared development.

President Xi Jinping said that we should work to ensure a more open, inclusive, balanced and win-win globalisation. To this end, China proposed the Belt and Road Initiative (BRI). It has now become a popular public good for the world and a huge platform for international cooperation. It has also given a new impetus to economic globalisation.

In building BRI, China follows the principles of extensive consultation, joint contribution and shared benefit. It is now pursuing high-quality BRI development. As we speak, China has signed 197 documents on jointly building BRI with 137 countries and 30 international organisations.

China, the UK and the EU could enhance cooperation on BRI in the areas of banking, investment, financing, insurance and asset management. We could also work together to promote cooperation on projects in third markets, so as to promote the economic growth and improve people’s life in host countries. This could enable us to match our comparative strengths, achieve win-win results, and deliver more benefits to the people of all the countries in the world.

A week ago, the Chinese Government issued 4 billion euro-denominated sovereign bond in Paris. I am glad it was listed at the London Stock Exchange yesterday.

This is the first issue of euro-denominated Chinese sovereign bond in 15 years. It is also the largest-ever single issue of foreign-currency-denominated sovereign bond by the Chinese Government.

This reflects the importance China attaches to the European financial market. It sends a clear message to the international market, especially to European investors, that China will open up at a higher level on all fronts. And China will continue to deepen financial cooperation and share development opportunities with the EU.

Ladies and Gentlemen,

The world economy is facing opportunities as well as challenges. Hong Kong, as an international financial centre, is an important base from where many British, French and international financial institutions go on to explore the Chinese market. However, the incessant large-scale illegal violent activities over recent months have pushed Hong Kong into an extremely dangerous situation. In particular, the recent escalation of violence has dealt a severe blow to the public order and rule of law in this city.

The acts of the rioters are absolutely intolerable and deserve the strongest condemnation. Such violence should not be allowed to continue. The Government of the Hong Kong Special Administrative Region, the Hong Kong police and judicial institutions should be given strong and complete support in upholding the rule of law, and taking all necessary, decisive and forceful measures to curb and combat all types of illegal violent and terrorist activities. We firmly support them in ending violence and restoring order as soon as possible so as to bring back stability to Hong Kong and tranquility to the people.

It is our hope that the international community, including the UK, France and the EU, will have a clear understanding of the nature of the current situation in Hong Kong, firmly condemn and oppose violence, and do more things that are conducive to the prosperity and stability in Hong Kong.

I hope that the financial and business community in the UK, France and other European countries will have confidence in Hong Kong. I hope, with your understanding and support, Hong Kong, this oriental pearl, will once again shine brightly.

Ladies and gentlemen,

China always approaches China-UK and China-EU relations from the strategic perspective and attaches great importance to these relations.

China will be more open.

China will continue to grow vigorously.

China is a responsible member of the international community.

China will create more opportunities for all the countries in the world, including the UK, France and other European countries.

An adage in China goes,“A wise man changes as time and event change.” British people often say, “A wise person always seizes the opportunity and turns it into a better future.” I learnt there is a similar saying in France, which goes, “You have to know how to take advantage of the backwind as long as it blows in the sail.” ( Il faut savoir profiter du vent arriere tant qu'il souffle dans la voile.)

The wise men of all our countries have taught us to seize the opportunities. So I hope the business leaders present today will follow this advice, shore up confidence and enhance cooperation. I am sure you will work for more productive China-UK and China-EU relations, and create a better future for the development of the world economy.

Thank you!

Now I would like to take your questions.