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Win-win opportunities

By Li Keqiang (China Daily)
Updated: 2011-01-06 07:56

Expansion of trade and investment, and more exchanges will deepen China's strategic partnership with Germany

It is a great pleasure to visit Germany at the start of the new year. Germany is the birthplace of a great many philosophers, scientists and composers. The Chinese people admire the German people for being talented and hard working. "Made in Germany", as a synonym of high quality, state-of-the-art technology and innovation, is popular with Chinese consumers.

The Chinese people have always cherished friendly sentiments toward the German people. During last year's World Expo in Shanghai, the German Pavilion hosted more than 4 million Chinese visitors, and still more toured the pavilion online or on TV. At the conclusion of the Expo, the German Pavilion was given the Golden Award for Theme Development. All these have brought Germany closer to the Chinese people.

I believe it must also be the desire of the German people to know more about China and its people. Over the last 30 years since the beginning of reform and opening-up, China has enjoyed fast economic growth. It is now a major world economy. People's lives in both urban and rural areas have improved significantly. Estimates show that China's economy maintained a high growth in 2010. Of the estimated 10 percent growth last year, over 90 percent was attributable to growth in domestic demand. Despite our achievements, though, we are soberly aware that China's basic national conditions haven't changed. China has a large population, a weak economic foundation and its development is uneven. And it has to face the mounting pressure caused by resource and environmental constraints.

China is still the largest developing country on earth. China's GDP may be one of the world's biggest, but when it is divided by 1.3 billion people, the per capita figure brings China down to somewhere around 100th in the world. Many German friends may have been to the coastal areas and big cities in China. But when they go further, to the vast central and western regions, or simply to villages not far from big cities, they will see places where there is a lack of proper transportation facilities and even drinking water. Out of the 1.3 billion people in China, 700 million are farmers whose per capita income is merely $800-900 a year. And 150 million people in China are still living below the United Nations Millennium Development standard of $1 per day per person.

The task China faces to develop the economy and improve people's lives remains daunting.

Recently, China adopted a blueprint for economic and social development for the coming five years. The guiding principle is to pursue scientific development, to put people first and promote comprehensive, balanced and sustainable development. We need to accelerate the transformation of the economic development pattern to achieve long-term, steady and fast economic growth and extend the benefits of development and reform to all our people.

To meet these goals, we need to boost domestic demand. To do this, we will adjust the structure of income distribution, improve essential public services and build a social safety net. By doing so, we will be able to increase urban and rural income and unleash the potential consumption demand of the more than one billion Chinese people. We need to restructure the economy to encourage technological innovation, green development and the development of human resources as ways to optimize the industrial structure, and promote balanced development between urban and rural areas and among different regions.

As we work to maintain a moderate speed of growth, we will also raise the quality and efficiency of growth. To do this we need to deepen institutional reforms. We will give full play to the fundamental role of the market in resource allocation, and will speed up reforms in corporate, fiscal, taxation, financial, pricing and other key areas.

Our aim is to enhance the internal forces that drive growth, make the Chinese economy more vibrant, and provide an institutional guarantee for China's economic transition and upgrading.

China will continue its efforts to overcome the underlying impact of the international financial crisis amid deepening globalization. At the same time, it will stick to the win-win strategy of opening-up. It will explore new areas of opening-up and raise the level of opening-up. China will only open wider to the world. It will be more conscientious in drawing on the achievements of human civilization and learning from other countries' best practices in development. It will take more concrete steps to enhance international exchanges and cooperation and work with the people of other countries to make our world a harmonious one of lasting peace and common prosperity. China's support of the EU's financial stabilization measures and its help to certain countries in coping with the sovereign debt crisis are conducive to promoting full economic recovery and steady growth.

Throughout the years, China-Germany relations have grown steadily. The two countries have established a strategic partnership. Over the past two years, China and Germany have worked hand-in-hand to tackle the international financial crisis. Both were among the first to achieve an early and strong economic recovery, and both contributed actively to the recovery of the world economy.

China's trade with Germany in 2010 is expected to exceed $140 billion, an equivalent of nearly 30 percent of China's trade with the EU. And for the first time, China has become Germany's largest source of imports and its top trading partner outside the EU. Exchanges and cooperation between the two countries in culture, science and technology, education, health and judicial affairs have been fruitful.

Under the new circumstances, China's sustained, steady and fast economic growth, and its continued reform and opening-up will offer new opportunities for China-Germany cooperation in economic, trade and other areas.

On expanding cooperation in trade.

China's total imports from the rest of the world may well reach $1.5 trillion this year. Germany, a major equipment producer and technology exporter, is China's important partner. The two countries can work jointly to maintain an open market and promote trade and investment liberalization and facilitation, jointly call for the proper settlement of trade frictions through consultation, and jointly oppose all forms of protectionism. We hope that the EU will relax restrictions on high-tech exports to China, promote the improvement of the international trade and financial regime, and develop trade relations that are balanced and sustainable.

On promoting mutual investment.

China welcomes the presence of more foreign investment in China, particularly in such areas as modern agriculture, high and new technology, energy and environmental conservation, new energy and new materials. We also encourage capable and credible Chinese companies to invest abroad. Currently, Germany's investment in China accounts for only 2 percent of its overseas investment, and China's investment in Germany is just a little more than $1 billion. While we consolidate and deepen our productive cooperation in traditional areas such as machinery, automobiles, the chemical industry, electronics, our two countries should continue to tap our potential and explore new areas of cooperation, such as the development of the green economy.

On improving the investment environment.

China will continue to improve foreign business related laws, regulations and policies, and give protection to intellectual property rights in order to provide a level playing field and a stable, orderly, transparent and predictable market environment for all market players. All foreign companies registered in China in accordance with China's laws are entitled to the same treatment as their Chinese counterparts. A total of 4,500 German companies now have investments or are doing business in China. We hope the number will grow even bigger. We also hope that it will be more convenient for Chinese companies to invest and start business in Germany.

On expanding opening-up in the service sector.

More than 100 service sectors in China have been opened up since China joined the WTO. To further develop the service sector and scale up international exchanges and cooperation, China will open still further financial and logistic services, steadily open up the education, health and sports sectors, and bring the services up to international standards. We welcome German companies to invest more in China's modern services.

On deepening cultural and people-to-people exchanges.

Our two countries will jointly hold the "Year of Chinese Culture" in Germany and the "China-Germany Bridge to the Future" forum. These events will deepen the mutual understanding and friendship between our peoples. Moreover, German music, drama, films and other cultural products can enrich the Chinese people's lives. Germany's advanced medical and pharmaceutical equipment and technologies may benefit more Chinese patients. And more and more German coaches, excellent in their ranks, may come and train teams in China. China-Germany cooperation in cultural and people-to-people exchanges enjoys excellent prospects.

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The coming five years will be crucial to China's goal of achieving moderate prosperity in all respects. As the progress in China accelerates in industrialization, IT application development, urbanization, market-oriented development and internationalization, more than 10 million rural residents will move to cities every year, and urban and rural incomes will increase significantly. It will unleash more potential domestic demand, and quickly raise the demand for both consumer goods and investment goods. All this will create new opportunities for China and Germany, two economies that are highly complementary, to deepen practical cooperation in a wide range of areas.

I am confident that as China deepens reform and opens wider to the world, China's cooperation with Germany in business and other fields will achieve even greater progress and bring more tangible benefits to our peoples.

The author is vice-premier of China.