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Speech by H.E. Li Keqiang Premier of the State Council of the People's Republic of China At the 20th ASEAN Plus China, Japan and ROK Summit
2017/11/14

Manila, 14 November 2017

President Duterte,
Colleagues,

It gives me great pleasure to attend the 20th ASEAN Plus China, Japan and ROK (APT) Summit. On behalf of the Chinese government, I wish to express sincere appreciation to the government of the Philippines for its thoughtful preparations and arrangements for the meeting.

APT cooperation, now in its 20th year, was born from the joint efforts of Asian countries to tackle the financial crisis. Over the past 20 years, thanks to the concerted efforts of all parties, the APT cooperation framework has kept improving and incorporated broader areas. It has become one of the most full-fledged and productive cooperation frameworks in Asia, making positive contribution to peace, stability, development and prosperity in East Asia.

The world economy is now seeing an upward momentum, with global trade and investment starting to pick up and the international financial markets maintaining general stability. China-Japan and China-ROK relations are showing a momentum of improvement. All these have created new opportunities for APT cooperation. This said, the uneven global economic recovery, rising anti-globalization and protectionist sentiments and flare-ups of regional hotspots are also posing challenges to APT cooperation. China hopes that our meeting will build up consensus and send a positive message of our firm commitment to regional integration and to the building of the East Asia Economic Community (EAEC), which serves the interests of our countries and peoples and adds positive energy to fostering an open world economy.

Colleagues,

Our summit today is a commemorative event for the 20th anniversary of APT cooperation. As such, it has special significance for the future of this cooperation framework. Thanks to our commitment to common development in the past two decades, East Asia has stood the test of two financial crises and become one of the most dynamic and promising regions in the world. Together, we contributed 44% to world economic growth last year. Our efforts to advance regional integration through vigorous trade and investment liberalization and facilitation have delivered good results: the ASEAN Community has been established; the China-ASEAN Free Trade Area (FTA) has been upgraded; a high-standard China-ROK FTA has been set up; and RCEP negotiations have made solid progress. Practical cooperation has been the driving force for the APT process. Cooperation in 24 areas has yielded positive outcomes and produced a large number of flagship projects, such as the CMIM, APTERR, AMRO and East Asia Forum. We have worked on institution building to sustain APT cooperation. A framework with the leaders' summit at the center, supported by ministerial, senior officials' and ambassadorial meetings has been established. These hard-won achievements and valuable experience deserve to be cherished and carried forward.

Building the EAEC has been one of the strategic objectives of APT cooperation and serves the long-term and fundamental interests of the people in the region. We now enjoy a rare opportunity, advantageous conditions and extensive support for advancing this worthy cause. And we should do so expeditiously. In China's view, EAEC building needs to serve one purpose, follow two principles, and be advanced in three spheres. The "one purpose" is to promote regional economic integration to deliver integrated development and common progress. The "two principles" are the centrality of ASEAN and the ASEAN Way featuring consensus-building, openness and inclusiveness, and accommodating each other's comfort level. It needs to be advanced at the "three spheres" with APT cooperation serving as the main channel, the three 10+1 as the basis, and sub-regional mechanisms such as China-Japan-ROK, Lancang-Mekong and BIMP-EAGA as useful supplement. All this will help put EAEC on a track of sound, steady and sustainable development.

At the 15th East Asia Forum hosted by China in Changsha last June, representatives from governments, businesses and academia discussed EAEC development and drafted a concept paper entitled "East Asia Economic Community Blueprint". We may draw on the experience of the ASEAN Community in formulating the blueprint, goals, quantitative indicators, roadmap and timetable for EAEC. Our cooperation may start from areas with the most extensive consensus and most solid foundation to be gradually expanded to more areas and upgraded to higher levels. We need to make sure that all countries will benefit from the process to generate greater confidence and incentive for EAEC building. In this connection, let me propose the following.

First, we need to vigorously promote trade liberalization and facilitation to move toward a single market step by step. Last year, the combined trade volume of APT countries exceeded 8 trillion US dollars, accounting for one quarter of the world's total; yet only 40% of it was intra-regional trade, which means there is great potential to expand trade among ourselves. All parties need to further open their markets, reduce tariff and non-tariff barriers, enhance liberalization in services trade and investment facilitation, and foster interdependent regional trade chains. All this will help further open up our region and unleash greater dynamism and potential for our development. China will work with Japan and the ROK to expedite trilateral FTA negotiations and will take a more proactive approach in advancing RCEP negotiations to pave the way for the long-term goal of the FTAAP. It is also necessary to establish a pan-East Asia customs clearance cooperation mechanism to step up cooperation in information exchange, mutual regulatory recognition and mutual law-enforcement assistance in customs procedures. The practice of single window system for international trade should be adopted more extensively. Innovative forms of trade need to be encouraged to create enabling conditions for cross-border e-commerce.

Second, we need to expand industrial capacity and investment cooperation to forge industrial chains for win-win results. APT countries have respective strengths in labor, resources, technology, capital, market and industrial capacity. There is a great potential for further cooperation among us, be it through horizontal or vertical division of labor. While expanding investment cooperation in traditional sectors such as light industry, textiles, home appliances, construction materials and metallurgy, China is ready to advance cooperation in emerging sectors such as the digital economy, smart economy, green economy and sharing economy and in building industrial, value and innovation chains that we can all participate in and benefit from. Apart from bilateral cooperation, we should also look for opportunities to expand third-party cooperation; and while leveraging the leading role of big companies, we should give full play to the supportive roles of SMEs, so that businesses of all sizes can better integrate their operations. China is ready to work with other parties to develop an APT SME Service Alliance that will help more SMEs to benefit from industrial chain cooperation. In this connection, China will host an APT Seminar on Innovation Cooperation for SME Service Institutions in Shenzhen next week. The presence of your SMEs will be most welcome. China also supports the convening of the International Symposium on APT Industrial Capacity Cooperation and the International Forum for China-Japan-ROK Industrial Capacity Cooperation to increase intellectual input in such cooperation.

Third, we need to strengthen infrastructure cooperation to develop connectivity networks. Connectivity as the very basis of economic cooperation should be a priority in building the EAEC. China will work for greater synergy between its Belt and Road Initiative and ASEAN's Connectivity Master Plan and, on that basis, explore with regional countries a master plan for East Asia connectivity that comprises land, sea, air and cyber links. China supports all-dimensional sharing of logistics information by regional countries. We may explore the extension of the Northeast Asia Logistics Information Service Network to the ASEAN region to form an integrated logistics system across East Asia. China supports the creation of an East Asia energy and resources cooperation mechanism to buttress regional energy and resources security. The development of an East Asia maritime cooperation platform should also be encouraged for the purpose of boosting cooperation in marine economy, marine environment protection, disaster management and fishing. China will facilitate the provision of more financing support by the Asian Infrastructure Investment Bank and the Silk Road Fund to connectivity endeavors in our region.

Fourth, we need to deepen financial cooperation to safeguard regional financial stability. Financial cooperation is one of the earliest and most fruitful areas of APT cooperation, and also a priority in building the EAEC. We need to jointly build up a regional financial cooperation system by strengthening cooperation in such areas as currency stability, investment, financing, and credit rating. We should do a good job in the periodic review of the CMIM, make it safer, more effective and more readily available, and add more building blocks to the regional financial safety net. China hails AMRO's permanent observer status in the UN General Assembly and supports effective exercise of its role as a regional economic surveillance platform. China is committed to make contribution to CGIF's capital increase to facilitate the development of the Asian bond market. We also support the positive role of the Asia Financial Cooperation Association in safeguarding the stability of regional and global financial markets.

Fifth, we need to strengthen cooperation in sustainable development to make development in East Asia more balanced, inclusive and beneficial to all. In building the EAEC, we need to make sure that all parties benefit from the process and that the concerns of the less developed countries and the disadvantaged communities are duly accommodated. We need to implement the UN 2030 Agenda for Sustainable Development and intensify cooperation in food, energy and poverty reduction to make the process of development more fulfilling for our people as they participate in and gain from it. In the interest of regional food security, China and Thailand have co-sponsored an APT Leaders' Statement on Food Security Cooperation to be adopted by this meeting. China also supports institution building for the APTERR and will continue to do our best in hosting such programs as the Roundtable Meeting on APT Food Security Cooperation Strategy and the Modern Agriculture Workshop for East Asian Countries. China is earnestly following through on the East Asia Cooperation Initiative on Poverty Reduction and stands ready to strengthen cooperation with regional countries on micro infrastructure and public services. China welcomes more experience sharing with other APT countries to jointly explore effective ways of poverty reduction tailored to the needs of our region.

Sixth, we need to expand cultural and people-to-people exchange to instill a greater sense of community among our peoples. For the EAEC to be successful, it must be built on solid popular support. We need to encourage more interactions between our peoples and more mutual learning in the cultural sphere to forge deeper mutual understanding, greater trust and stronger friendship. We need to step up tourism cooperation, streamline visa and customs procedures, encourage more events such as designating specific weeks or months for tourism promotion purposes or declaring year of tourism, and make traveling easier, safer and more comfortable. China supports more interactions between the East Asia Cultural Cities and ASEAN Cultural Cities as well as the development of the APT Rectors' Conference, and will continue to run the "Understanding China" program, the APT Media Cooperation Forum, the APT Workshop on Cooperation for Cultural Human Resource Development and other similar programs. China was the first to contribute to the replenishment of the APT Cooperation Fund, and will continue to encourage the Fund to channel resources to cultural and people-to-people programs, those for our young people in particular. China supports track II mechanisms such as the East Asia Forum and NEAT in contributing more insightful ideas and recommendations for EAEC building.

Regional peace and stability is the basis and prerequisite for East Asia cooperation. As a close neighbor of the Korean Peninsula, China is firmly committed to the goal of denuclearization of the Peninsula, to peace and stability there and in this region, and to resolving the issue through dialogue and consultation. This is China's unwavering position. To achieve the above-mentioned goals, China has put forth the "dual track" approach and the "suspension for suspension" initiative, which we hope will receive positive response from all parties. In the meantime, the parties concerned need to avoid any words or actions that may aggravate tensions, and play a constructive role for the peaceful resolution of the Peninsula issue.

Colleagues,

Despite a complex and fast-changing international environment and persistent downward pressure on the Chinese economy in recent years, China neither resorted to massive stimulus nor engaged in competitive devaluation. Instead, we relied on supply-side structural reforms to innovate and improve macro-regulation and foster new drivers of growth. These painstaking efforts have paid off in terms of notably improved economic performance. First, we have kept a medium-high growth rate. In the past four years, China posted an average annual growth rate of 7.2%, and contributed 30% to world economic growth. More than 13 million urban jobs were created every year, and the rise in urban and rural income outpaced economic growth. Second, structural readjustment has picked up speed. From 2013 to 2016, the share of final consumption in overall growth rose from 47% to 64.6%, the proportion of added value of the services sector in total GDP grew from 46.7% to 51.6%, labor productivity surged by 30.2% whereas energy consumption per unit of GDP dropped by 17.9%, all indicating better quality and efficiency of growth in China. Third, new growth drivers are replacing old ones at a faster rate. Emerging sectors such as the digital economy are booming; traditional industries are being transformed and upgraded; and growth in new economic models such as mobile payment has surpassed all expectations. New market entities are emerging en masse. Over the past three years, 14,000 new enterprises were registered on a daily basis. These new growth drivers have been the main pillar for economic growth and job creation, and set the Chinese economy on a new track of innovation-driven development, with steady growth and faster upgrading being achieved at the same time.

In 2017, China's economy has continued its good momentum of steady growth with better-than-expected performance of all major indicators and simultaneous improvement in the speed and efficiency of growth. In the first three quarters, the economy grew by 6.9%; surveyed unemployment rate in 31 major cities stayed at a relatively low level of around 4.9%; import and export increased by 16.6%; fiscal revenue grew by 9.7%; corporate profits of large industrial companies expanded by 22.8%; and reduction of excess capacity in steel and coal sectors exceeded this year's targets. The bond, stock and real estate markets have been generally stable, corporate leverage ratio has come down moderately, and the financial system has shown robust and steady performance with risks effectively brought under control. The RMB exchange rate has remained basically stable, foreign currency reserves have kept increasing and market confidence has been boosted. The Chinese economy now shows stronger dynamism, greater resilience and brighter prospects.

We are in the middle of a transition in the Chinese economy from high-speed growth to high-quality growth. The 19th National Congress of the Communist Party of China convened last month has drawn an ambitious blueprint for China's future development. We will continue to follow the principle of striving for progress while maintaining stability, pursue innovative, coordinated, green, open and shared development and give greater emphasis to quality and efficiency. We will concentrate on supply-side structural reforms, upgrade the quality, efficiency and drivers of growth and raise total factor productivity for the sustained and sound development of the economy. We will stay committed to the basic state policy of opening-up, give priority to the implementation of the Belt and Road Initiative, and pay equal attention to attracting inbound and making outbound investment. We will adopt high-standard policies for trade and investment liberalization and facilitation and develop global networks of trade, investment, financing, production and services to break new ground in China's all-round opening-up. These efforts will help deliver a Chinese economy that is more efficient, equitable, sustainable and of higher quality.

A more open and prosperous China will not only benefit the more than one billion Chinese people, but also offer larger markets and more opportunities for growth, investment and cooperation to countries across East Asia and the world. It is estimated that in the coming five years, China will import 8 trillion US dollars worth of goods, receive 600 billion US dollars of foreign investment, and make 750 billion US dollars of outbound investment. And there will be 700 million visits by Chinese tourists to overseas destinations. We will hold the first China international imports expo in November next year and look forward to the active participation of all regional countries. I heard there is a saying from Southeast Asia, which goes: lotus flowers get lifted as the water rises. Similarly, we Chinese say that those in the waterfront pavilion get the earliest view of the moon. As China develops, its neighbors are the first to benefit and will benefit the most, and China's development will certainly boost the economies of other East Asian countries.

Colleagues,

It has been 20 years since we initiated the APT cooperation. Just like a young man in his prime, APT cooperation is full of vigor and promises a great future. Let us join hands in building the East Asia Economic Community and together usher in another 20 years of even more dynamic APT cooperation.

Thank you.

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