to significant change in the flow of international trade. In looking at China's surplus in its trade with the EU, to just apply the current rule of origin does not give one the complete and real picture of interests and balance in our trade. China's policy is to maintain basic balance between import and export. It does not seek excessive surplus. At present, China's overall trade surplus only accounts for 4.6 percent of its GDP, much lower than that of some European countries, such as Germany, Norway, the Netherlands and Ireland. China will endeavor to increase import from the EU. Meanwhile, we hope the EU will relax its restrictions on the export of

hi-tech and dual use products to China and work with us to bring about balance in China-EU trade.

2. IPR protection. IPR protection is necessary, both for China to fulfill its international obligations and to promote its development and enhance its capacity of independent innovation. China is firmly committed to IPR protection. China has adopted the Copyright Law, the Patent Law, the Trademark Law and other IPR-related laws. It is a party to major international conventions on IPR protection and has signed bilateral agreements and established dialogue mechanisms on IPR protection with EU member states and many other countries. The Chinese Government has set up a task force on IPR protection, opened 50 centers for handling IPR violation complaints across the country and strengthened government IPR protection agencies. We have stepped up law enforcement, lowered the threshold for imposing criminal penalty on IPR violations and intensified efforts to crack down on IPR-related offences. We hope to strengthen cooperation with the EU by giving full play to the role of China-EU Dialogue Mechanism on IPR. On the other hand, we are critical of the practice of maintaining technology monopoly by abusing IPR agreements and rules. Knowledge of mankind should be used to better serve mankind.

3. Energy consumption. The main thrust of China's energy strategy is to rely mainly on domestic supply and lay equal emphasis on conservation and development while giving top priority to conservation. We will promote technological progress and pursue a new path of industrialization to ease shortage in energy supply. China is both a major energy consumer and a major energy producer. Since the 1990s, China has always been able to meet over 90 percent of its total energy needs by itself. China is rich in coal resources. Two thirds of China's hydropower remains untapped, and the use of renewable energy such as nuclear energy, wind energy, solar energy and biogas has just started. We will work even harder to save energy. In the coming five years, China's per unit GDP energy consumption will be cut by 20 percent. This is no easy task, but we are confident to meet the goal. China can certainly blaze a new trail in sustainable development. Meanwhile, we are also actively seeking international cooperation to jointly safeguard global energy security.

4. Trade frictions. Recent years have seen some increase in China-EU trade frictions. However, China-EU trade relations as a whole remain sound. China runs both a big surplus and a big deficit in trade. To maintain a good trading environment serves the common interests of both parties in trade. Trade frictions are natural. The principle of mutual respect and consultation based on equality should be followed in addressing these problems. Each side should accommodate the concern of the other side while pursuing its own interests, and should refrain from politicizing trade issues. Through addressing textile products and other bilateral trade disputes, we have gained much experience for ensuring mutual benefit and win-win outcome. We should bear in mind the overall interests of China-EU cooperation, continue dialogue and consultation, respect and trust each other and seek common ground while shelving differences. By doing so, we can surely guide the ship of China-EU economic cooperation to cleave waves and charge ahead.