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China in an Interdependent World----Speech at CBBC Conference
2008/04/16

Chinaand UK: Partners in Sustainability

Fu Ying

Sir David Brewer, Chairman of the CBBC,

Mr Dong Songgen, Vice Chairman of the China Council for the Promotion of International Trade,

Professor Hai Wen,

Ladies and Gentlemen,

It gives me great pleasure to join this distinguished gathering. I wish to begin by thanking the CBBC for hosting this high-level meeting.

As part of the China Now events, this conference offers a valuable opportunity for us to compare notes on how we each are doing on sustainability and how we can better promote sustainability by working together.

This year marks the 30th anniversary of China's reform and opening up, during which China has made great strides. For us the Chinese people, the most important change in China has been the transformation of the way of life.

The most important political belief in Chinese history is that "Food is the heaven for the people". For the first time in its history Chinese people are no longer worried by hunger. For people my age up to those born in the 70s, a way of daily greeting was "have you had your meal?" For the first time, the Chinese feel we are leading a decent life, and we can think about more than three meals a day.

Moreover, China has leapfrogged into the information age. There are now 360 million fixed line phones and 630 million mobile handsets in China. The number of internet users reached 210 million, second only to the United States.

Among the criticisms on China is what some see as the lack of media freedom. By the end of 2006 there were 573 publishing houses in China, turning out 230,000 books each year. There are 2,000 newspapers and 9,000 periodicals. There are also lots of TV channels.

Last month I met with business executives from major internet portals like Sina and Sohu, who came to Britain for an internet forum. They told me their news section is rolling 10,000 pieces of news each day.

Chinahas become not just a workshop for the world, but also a huge and vibrant market. By 2010 China will import 1 trillion US dollars worth of goods and services from other countries and regions annually.

Given such speed of growth and changes in the society, the party and the government are turning their attention to upgrading social services for the people.

One of the important highlights of the 17th Party Congress was the shift from preoccupation with economic development to putting people and family needs first. Greater attention is given to addressing social issues of immediate concern to the people.

During Prime Minister Brown's visit to China earlier this year, he and Premier Wen together attended a town hall meeting. Most of the questions from the audience were for Premier Wen. One lady asked Prime Minister Brown how Britain was dealing with education and how his vision of a good society was being put into practice. It was good that she knew the Prime Minister ambition for building a good society.

Before this year's National People's Congress session last March, an online column entitled questions to the Premier was created for internet users to post their views and suggestions to Premier Wen.

In less than two weeks, forty million people logged on the website to post more than three million questions and comments for Premier Wen. I don't think Premier Wen could read every one of them. I tried to read a dozen of them every day and found them to be most about the daily life of ordinary Chinese. Some were critical. A rural teacher asked the Premier why teachers in the cities earned more than they did.

Price rises were the number one concern. The Premier dealt with this question at length in his report on the work of the government. He admitted that 2008 may be the most difficult year for China's economy.

Indeed, since the second half of 2007, signs of an overheating economy and rising inflationary pressure have appeared. Many see the latest price rises in China as mainly structural in nature and imported.

Higher food and resource prices are transmitting into wages and price of investment goods, leading to the risk of full-blown inflation. At the same time, labor cost in China is rising. The welfare of the hundred million rural surplus laborers who have migrated to the cities was given more attention. Not long ago the Labor Contract Law was enacted to provide for mandatory insurance and benefits for them.

A noteworthy fact is that the health of China's economy is increasingly being affected and is affecting the health of its main trading partners and the global economy at large.

The macro economic policies of China and the United States and some other trading partners are going in opposite directions. While we are trying all means to cool down the economy, the US is trying to stimulate the economy.

It is interesting to note that deputies to the NPC last month had a long and apparently heated discussion on economic policy and trends in the US. Who would have thought so.

The potential for global economic downturn have added to the risks for the Chinese economy. The actions the US takes, notably the Fed rate cuts and a possible fiscal stimulus package are being closely watched in China.

Managing the opposing trends in the interactions of the two economies is crucial to sound economic development in China.

The macro economic priorities for China in 2008 are two-fold: preventing economic overheating and fending off entrenched inflation. Specific measures included: short term fiscal stimulus for agricultural and food production, cooling down the investment boom by tightening credit, and enlarging the flexibility of the yuan.

Hopefully by the second half of this year macro economic health in China will improve. Given the current financial and monetary environment both in China and in the world, there is growing incentive and opportunities for Chinese companies to go abroad.

I am suggesting at every opportunity that the UK is a good landing place for Chinese companies testing international waters. And there is a whole set of legal and consulting structures in place in the UK that will be helpful for Chinese companies.

However, Chinese companies still face significant constraints in terms of limited knowledge of international markets and the regulatory framework, lack of experience, expertise and qualified professionals. Even Mr Lou Jiwei of CIC does not have a good adviser who is really familiar with the British capital markets.

It's important for the UK to be more proactive in encouraging Chinese companies to operate overseas including locally in the UK.

Today Chancellor Alastair Darling is in Beijing for talks with Chinese leaders for the economic and financial dialogue (EFD). World economic outlook and the respective state of the Chinese and British economies would come up in the discussions. I hope these talks will send an important signal to the economic communities of both countries.

Chinaand the UK have become key partners in international affairs for each other. To have a successful relationship it is important to have a healthy atmosphere among the public in the two countries.

The recent events made me realize there is a huge information gap about China in this country. Bitter and outmoded views could easily dominate public opinion in times of crisis. I wrote an article for the Sunday Telegraph two days ago. And so far there have been 200 pages of comments, like a stone in the pond, sending ripple effect.

I am surprised at the limited knowledge about Tibet and many issues related to China. For example, many people in Britain believe that Tibet was an independent country five decades ago. Little did they know that Britain invaded Tibet twice in history and tried to reduce China's sovereignty over Tibet to a suzerain relationship. I read in a newspaper about terrible things that allegedly happened in Tibet. It was only when I came to the end of the article that I realized it was taken from a book written in the mid-80s.

If we start talking about 20 year old stories, then South Africa was still practicing apartheid. Now Mandela's statue is placed in front of the British parliament. A lot has changed in this world.

The information gap is hurting both sides, e.g. many people still use the term Mount Everest to refer to the highest mountain peak in Tibet. George Everest was head of the survey bureau of British India in mid-19th century. People named the mountain peak after him in the belief that he was the first to have measured it. What people may not know was that the Qing Court in China in the early 18th century twice sent teams to measure the height of the mountain peak more than one hundred years earlier than Everest and the mountain already had a beautiful Tibetan name Qomulangma long before Everest's grandfather was born. After so many years people here still use this colonial term in the name of asking for the rights of Tibetans.

The challenge for China is that while being firm against separation, we also need to learn to inform the world about us. We must get our stories out so that people around the world can know China better. China is not perfect. There are also a lot of complaints from the Chinese people themselves. But some of what the western media talk about is out of touch with the reality in China.

The information gap must be bridged by consistent efforts on our part. Even after what has happened recently, I am not losing confidence in our ability to do so. I believe in people. I believe in sensible judgment of the people. I will continue to try hard to engage the media and engage the wider public to promote knowledge and understanding of my country.

I am confident that by working together, we will deliver win-win results for our two peoples and make our interdependent world a better place for all.

Thank you.

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