Your Excellency Prime Minister Vladimir Putin,

Ladies and Gentlemen,

Dear Friends,

It is a great pleasure for me to attend the Third High-Level China-Russia Economic Forum with my old friend, Prime Minister Vladimir Putin. The theme of the Forum Fresh Progress, Higher Level has a profound meaning and succinctly summarizes the trends and tasks of China-Russia economic cooperation and trade. I sincerely wish the Forum a complete success!

The year 2008 has witnessed continued and in-depth development of China-Russia relations. Leaders of the two countries have reached a high degree of consensus on advancing China-Russia strategic partnership of coordination in an all-round manner and the boundary issues between the two countries have been fully resolved. China received valuable assistance and support from Russia in its rescue and relief efforts in the wake of the Wenchuan earthquake and in hosting the Olympic Games. The Chinese people have keenly realized what is meant by good neighbour, good friend and good partner. The Chinese Government and people will never forget the profound friendship of the Russian Government and people.

Both China and Russia are emerging economies with important influence on the world. To strengthen economic cooperation and trade between the two sides is not only conducive to the all-round development of bilateral relations, but also to the promotion of prosperity and stability of the world economy. In recent years, with the joint efforts of the two governments and people from all walks of life, China-Russia economic cooperation and trade has achieved remarkable success.

-Trade volume has increased and quality improved. The trade volume between China and Russia grew by nearly ten times in the decade from 1998 to 2007, and will top $50 billion this year, making attainable the trade target of $60 billion-80 billion the two sides set for 2010. While the trade volume grows, the trade structure has also improved. The export of electro-mechanical products from Russia to China has been on the rise for two consecutive years, and the two sides will launch a number of new demonstration projects in helicopter, metallurgy, machinery and other areas. With synchronized growth in both quality and quantity, China-Russia economic cooperation and trade has entered a new phase of development.

-Cooperation in energy and resources has picked up speed. The stable huge market of China has provided broad space for Russia to implement its energy export diversification strategy. The establishment of the China-Russia energy negotiation mechanism has put bilateral cooperation in oil and gas, nuclear energy and electric power on a fast track, leading to marked progress in such key projects as China-Russia oil pipelines, upstream-downstream integration and construction of demonstration fast reactor. Cooperation in forestry, mining and intensive processing has also produced positive results.

-High-tech cooperation has deepened. China and Russia have conducted effective cooperation in manned space flight, Mars exploration, information and communication, energy conservation and environmental protection, which has contributed significantly to industrial upgrading and the development of innovation-based economy in both countries. By setting up R&D and industrial demonstration bases, the two sides have carried out all-directional cooperation in basic research, application research, and commercialization and industrialization of research results in the priority areas of nanoscience and nanotechnology, life system and resource utilization.

-Mutually beneficial cooperation between the business communities has yielded more fruitful results. To date, the accumulative mutual investment between China and Russia has exceeded $2 billion. Large cooperation projects such as Tianwan Nuclear Power Plant, Baltic Pearl residential complex and Chinese Trade Center in Moscow are operating smoothly. Businesses' interest in cooperation is growing. More and more Russian consumers are choosing China-made communication equipment and household electric appliances. Russian Aluminium, System Group and Rosneft Oil either have built or plan to invest in large projects in China. The compiling of the Outline of Sino-Russian Investment Cooperation Plan is progressing smoothly.

Ladies and Gentlemen,

Dear Friends,

The current global financial turmoil poses unprecedented challenges to the world economy. As I have stated on many occasions, in face of crisis, confidence and cooperation are more important than gold or currency, for confidence is the source of strength and cooperation an effective means to overcome the crisis. Without confidence and cooperation, we would not have been able to overcome difficulties and move the world economy forward over the past several decades. Now, to stabilize the global financial markets, developed countries should shoulder their due responsibilities and obligations, and implement more effective policies to stabilize their own and the global financial markets. Other countries should adopt appropriate macroeconomic policies to maintain economic and financial stability and the stability of the capital markets. The international community should join hands to promote the development of the world economy and take seriously and strive to minimize severe damage caused by the crisis to developing countries, the least developed countries in particular. To maintain stable and relatively fast economic growth is the biggest contribution that China, a large developing country with a 1.3 billion population, makes to the world. China will continue to play an active role with a responsible attitude and make joint efforts with the rest of the international community to handle global challenges such as the financial crisis.

As the Chinese saying goes, "it is not too late to mend the fold even after some of the sheep have been lost". It is, therefore, necessary for us to draw serious lessons from this crisis, and properly handle the relationship between savings and consumption, between virtual and real economy, and between financial innovation and financial regulation. It is the right time to establish a new international financial order. And this is our most urgent task now. To achieve this goal, we need to do the following: First, improve the system of international financial organizations and bring into full play its role in maintaining international and regional financial stability and strengthening financial regulation. It is important to ensure that emerging and developing countries have greater right to know, to speak and to set rules. Second, reform international financial regulatory system, set up reasonable and effective financial regulatory standards, early warning system and risk prevention system, and particularly tighten supervision over the major reserve currency countries. Third, speed up the building of a diversified international monetary system by making use of multiple currencies, and work together to sustain stability of the international monetary system.