|Speech by Ambassador Liu Xiaoming At TESCO Dinner|
(April 27, 2010, Royal Horseguards Hotel, London)
Chairman David Reid,
Ladies and Gentlemen,
I would like to thank TESCO for its kind invitation this evening.
TESCO is well-known to me even before I came to the UK. It has 6 stores in my hometown Shenyang, capital city of Liaoning Province. The first supermarket I went to since my arrival in London was also a TESCO store.
TESCO's Chinese name "Le Gou" means "Happy To Buy". As you would say, "it does what it says on the tin" by offering a nice shopping environment and products people want to buy.
This dinner is focused on China's development and the role of foreign investment. A big subject for one evening, but I'm sure the discussions will go on long after tonight.
During the past 32 years of reform and opening-up, China has achieved an average annual GDP growth of close to 10% and the country was transformed. Some British scholars called it the "Beijing Consensus", which is rather flattering. But we do believe that China has pursued a way of development that fits with its actual conditions.
China fared relatively well in the latest financial crisis. It achieved 8.7 percent growth last year, contributing over 50% to global economic growth. In the first quarter of this year, China's economy grew by 11.9%.
Having said that, the Chinese economy is still facing a complex and uncertain situation both internationally and domestically. The challenge this year is to maintain fast growth, manage inflationary expectation and accelerate economic restructuring all at the same time.
The long-term outlook for the Chinese economy is still a highly positive one, thanks in part to the following factors.
First, industrialisation and urbanisation will continue to be powerful engines for China's economic development. China's industrialisation is still at the mid-stage. Over the past 30 years, more than 400 million farmers migrated to the cities. There will be over 300 million more doing so in the next 20 years.
Second, consumption will become a new driver of economic growth in China. Even before the financial crisis, China had tried very hard to boost domestic demand.
Just imagine, if every Chinese spends just 1 Yuan more a day, this would raise economic growth by 1.6 percentage points.
Last year, retail sales in China increased nearly 17%. But consumerism is still in its infancy. The Chinese government is working hard to improve the social security system and increase people's income.
This is good news for companies both in China and Britain. Remember, China became the second largest importer last year after only the U.S. Continued openness of the Chinese market will offer enormous opportunities to Britain and other countries.
Thirdly, foreign investment will continue to play a key role in China's economic development. China has been the largest destination for FDI among developing countries for years. By last March, nearly 690,000 foreign invested companies have been set up in China, investing over 1 trillion US dollars. In 2009, foreign-invested companies accounted for 55% of China's total foreign trade.
For quite a long time to come, China will remain a "land of treasure" for foreign investors. I am told that TESCO will reportedly invest 2 billion pounds in China in the next 5 years. I hope TESCO will be rewarded for its vision and commitment to China.
With regard to Chinese policies on foreign investment, let me cite the following three basic principles. First, China will continue to welcome foreign investors, particularly in high-tech industries, low carbon economy sectors, and service sectors that can build on its abundant labour resources. It will no longer support new investment into sectors which are excessively energy consuming or polluting.
Secondly, the Chinese government will continue to expand market access for foreign investors. According to the latest official guideline, eligible foreign companies may apply to list their shares on Chinese stock exchanges and issue corporate bonds and notes in China.
All companies - including foreign companies in China will also be treated equally in the designation of products of independent innovation.
Thirdly, there will be greater efforts to protect intellectual property rights. This month the 2010 Action Plan on IPR Protection in China was adopted by 28 government departments.
The Chinese government is doing its best to create a balanced and fair environment for all companies in China. I hope all of you will be "Happy To Sell" in China.
In just 3 days the World Expo will open in Shanghai. This will provide a rare opportunity for China and the UK to demonstrate there respective assets in trade and investment.
The UK Pavilion has an imaginative design and is affectionately known as "dandelion" by the Chinese. I understand that there will also be a rich programme of business and cultural events during the Expo.
I hope that through the Expo, China and UK will be able to seek new business opportunities, explore new areas of growth and further expand trade and investment cooperation.
At noon on the 30th April, I will host a reception at the embassy to mark the opening of the Expo. Your presence will be more than welcome. If any of you would like to join, do let my colleagues know. Hope to see you there.