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Wu Yi opens the Third China-US Strategic Economic Dialogue, 2007

Wu Yi is Special Representative of President Hu Jintao and Vice Premier of the State Council
December 12, 2007

Dec. 12, 2007

Dear Secretary Henry Paulson,

Dear colleagues,

I am delighted to welcome you to the Grand Epoch City, a garden city of classical Chinese architecture to attend the Third China-US Strategic Economic Dialogue.

This time last year, following the agreement reached between President Hu Jiantao and President Bush, we held the First China-US Strategic Economic Dialogue in Beijing. Since then, thanks to the personal attention paid and guidance given by the two presidents, the SED mechanism has grown in strength. Attracting widespread public attention in both countries and the international community, it has played an increasingly important role in ensuring the stability and growth of not only China-US business ties, but also our overall relations.

The First China-US Strategic Economic Dialogue focused on the Development Road and Economic Development Strategy of China and the United States. During the second Dialogue, we discussed key issues concerning China-US business relations. And we are meeting for this round of the Dialogue to review the current state of these relations in the broader context of economic globalization and look ahead at their future growth. The theme for the Dialogue, namely, Seizing the Opportunities of Economic Globalization and Dealing with the Challenges of Economic Globalization, is of both strategic and practical significance. It echoes the trend of the current global economic development, addresses key issues of concern to both China and the United States, and demonstrates our shared desire to resolve difficulties and problems that have occurred in the course of the rapid growth of bilateral business ties and deepen China-US cooperation. Under this theme, we will discuss such topics as policy steps to meet challenges posed by economic globalization, integrity of trade, cooperation on product quality and food safety, balanced economic development, cooperation on energy and environmental protection, and improving investment environment. I am confident that our discussions on both the general theme and specific topics of the Dialogue will help boost both China-US business ties and the growth of China-US constructive and cooperative relations.

I wish to take this opportunity to discuss the future growth of our business relations and the priority areas we need to focus on.

First, China and the United States are both stakeholders and constructive partners. We need to fully appreciate the important weight this relationship carries and the fact that business ties are both the foundation and a key area of the overall China-US relations.

In 1972, when late President Nixon made his first visit to China, our trade was almost non-existent. By contrast, it is expected to exceed US$ 300 billion. China and the United States are each other's second largest trading partners, and China has been the fastest growing export market for the United States for five consecutive years. We owe such progress to the joint efforts of both countries, and we salute all the people in both countries who have worked so hard to build strong business ties between the two countries. The dynamic growth of China-US business ties has benefited our two peoples, making life better for them. Our business relations are win-win in nature. They are closely linked to our relations in the political, cultural, scientific, technological and other fields, and these ties are mutually reinforcing. The strong growth of our business ties has boosted our cooperation in other fields, thus becoming a solid foundation for the growth of overall China-US relations. In the course of the rapid growth of China-US business relations, some difficulties and problems have occurred. This is normal, and these difficulties and problems can only be resolved through dialogue and consultation. The history of China-US business relations has repeatedly shown us that it is dialogue and consultation, not confrontation and finger pointing, that have enabled the relations to grow. We should address issues in our business relations in a constructive way. We should make joint efforts and adopt comprehensive measures to ease trade imbalance and resolve disputes so as to further boost our business relations. And this will lay a more solid economic foundation for growing the relations between China and the Unites States who are both stakeholders and constructive partners.

Second, we should strengthen strategic mutual trust, enhance mutual understanding and accommodate each other's concerns through deepened dialogue and consultation.

Thanks to accelerated economic globalization, the growing China-US business relations featuring interdependence, mutual benefit and win-win progress have brought our two peoples increasingly closer to each other. We all hope that both our economies will enjoy sustained growth so as to create more opportunities to expand cooperation in the interest of our respective development. This is why we must not allow some interest groups to harm our win-win business relations in pursuit of their selfish interests. We must oppose attempt to politicize trade issues. Politicizing trade issues will harm the interests of not just one side, but both sides. I am particularly concerned about the 50 or so protectionist China-related bills introduced in the US Congress. Secretary Paulson and other American colleagues, I need to be quite candid about this: If these bills are adopted, they will severely undermine US business ties with China. I have noticed that the American business community and public figures with vision have seen the grave consequences of protectionism. In this connection, I welcome the joint letter sent by Secretary Paulson, Secretary Gutierrez, and Ambassador Schwab to the Congress on July 30th, concerning the bills respectively sponsored by the Senate Committee on Finance and the Senate Committee on Banking, Housing and Urban Affairs. Secretary Paulson, you and your colleagues rightly pointed out in the letter that these moves can only be "counter-productive", and stated your explicit opposition to them. I also wish to draw your attention to a joint letter sent by 160 US multinational corporations and industry associations to the Congress on 26 September. The American corporations which signed the letter include high-tech companies such as Intel, Microsoft, IBM and HP, mega retail store chains such as Wal-Mart and Best Buy, Citibank, Morgan Stanley, New York Life and other major financial institutions and leading American companies like Coco-cola, Procter & Gamble, Chevron and General Electric. It is emphasized in the letter that US trade sanctions against China would only cause negative impact rather than a positive one. Obviously, to resort to trade protectionism and blame another country for the structural problems in the US economy is the wrong approach which would only harm the interest of United States itself. I hope that the US administration, the Congress and the media will heed the voice of the business community. I hope they will not lose sight of the larger interests of the United States, follow the historical trend of economic globalization, appreciate the importance of its overall relations with China and the mutually beneficial nature of our business ties, and pursue the right trade policy so as to enable our two peoples to gain more from the continuous growth of China-US business relations.

Third, we should properly address new issues emerging in the course of the growth of China-US business relations, turn difficulties and challenges into opportunities for cooperation and develop China-US business ties in both depth and width.

China-US business relationship is the most complex one in today's world owing to its huge scale, broad scope and the extensive interests of various parties involved. This requires us to view this relationship from a strategic height, demonstrate greater vision and courage, and adopt more effective policy measures to handle in a creative way issues that have occurred as our business ties expand. We should endeavor to turn difficulties and challenges into opportunities for cooperation, and add new momentum to the growth of our business relations. A case in point is the issue of product quality and food safety. As economic globalization gathers momentum, product quality and food safety have become a global issue. This means that the countries concerned must increase cooperation, assume their due responsibilities and strengthen related mechanisms to ensure the quality and safety of people's life. The Chinese Government takes this issue very seriously. For instance, the Leading Group for Product Quality and Food Safety under the State Council has been set up, and I am head of the Group. The Chinese Government has launched a four-month long nationwide campaign to improve product quality and food safety. At the same time, I need to point out frankly that the United States should also assume its due share of responsibility for improving product quality and food safety. I have noticed that the US side has intensified efforts to address this issue. I am glad that China and the United States have had in-depth and frank discussions on this issue within the SED framework. Acting in a spirit of enhancing mutual trust and cooperation, we have made substantive progress in the consultations. Before this round of the Dialogue, the two sides signed the Memorandum of Agreement on Food and Feed Safety and the Agreement on the Safety of Drugs and Medical Devices, which fully demonstrate our resolve to solve the issue through dialogue and cooperation and the progress made. I also wish to stress that there is enormous potential for further bilateral cooperation in the fields of environment and energy. We need to expand areas of cooperation and make new progress in them. As to China-US trade imbalance, I have repeatedly stated that China has no intention to seek large trade surplus with the United States. Our policy is to maintain a basic balance in international payments. To address China-US trade imbalance requires the concerted efforts of both sides. Here, I once again call on the United States to relax export control over export of high-tech products for civilian use to China. This is in your own interest. China has been the fastest growing export market for the United States for five years, and there is great potential for increasing US export to China. China's policy toward the US import is very clear, and its door is wide open to American products. The key is what policy the United States should pursue. Whether the United States can increase its export to China hinges on what policy it will follow. I hope the US side will change the outdated mindset and see the new horizon. My point is clear: Expand export of civilian-use high-tech products to China, and you can enlarge your market share in China. This is where your interest lies. At the recently-concluded 17th National Congress of the Communist Party of China, General Secretary Hu Jintao outlined the policy measures we will adopt to build a moderately prosperous society in all respects in China by 2020. We will promote coordinated development to ensure both sound and fast economic growth. We aim to quadruple China's per capita GDP of 2000 by 2020. We will promote a conservation culture. This means we will basically achieve the goal of making China's economic structure, model of growth and mode of consumption energy-efficient and environment-friendly. These policy steps have sent a very important message to the world: China will greatly expand its domestic consumption. This, in turn, will greatly increase the size of China's domestic market and sustain the balanced development in China. China's demand for products and particularly environment-friendly products will grow more rapidly. It is my hope that the United States will seize the opportunity and work in partnership with us to achieve eventual balance in trade.

Secretary Paulson,

The Third round of Strategic Economic Dialogue carries special significance as it is being held at an important stage in our business relations. I hope that through this Dialogue, we will gain a better understanding of the impact of economic globalization on our respective economies, and make major progress on specific issues on the agenda of the Dialogue. This will help us narrow differences and mitigate problems in our business relations, fully implement the agreement between the two presidents on the SED and grow our business relations to the benefit of our two peoples. In conclusion, I wish the Third China-US Strategic Economic Dialogue every success!