Ladies and Gentlemen,

Friends,

The Chinese Government sees great value in its relations with the European Union and regards the EU as one of its important strategic partners. In the past 34 years since the establishment of diplomatic relations, economic ties and trade between China and the EU have, thanks to the strong commitment and strenuous efforts of both sides, grown and matured steadily. They have become an important part of the China-EU comprehensive strategic partnership. The EU is currently China's largest trading partner, export market and technology supplier as well as the fourth largest source of foreign capital. China is the EU's second largest trading partner and largest source of imports, and has recently become the EU's third largest export market. Since the beginning of this year, despite the serious impact of the international financial crisis, economic cooperation and trade between us have enjoyed steady growth. Trade in the first 10 months stood at US$292.4 billion, taking up 16.7% of China's total foreign trade. The EU's accumulated paid-in FDI in China involved 31,000 projects and reached US$66.5 billion by the end of last September. China has introduced 31,600 technologies from the EU with a total contract value of over US$125 billion. What has happened proves that our business ties serve as an important engine driving the China-EU comprehensive strategic partnership and they help promote balanced and orderly development of the world economy.

This morning, I met with Prime Minister Reinfeldt, President Barroso and other EU leaders and we discussed the future of China-EU relationship. We agreed that if the China-EU Comprehensive Strategic Partnership is to move forward, it should be anchored on a foundation of economic cooperation, be hi-tech driven, and take the green economy as a priority. Our two sides need to work to enhance mutual trust, take a long-term perspective and promote mutual benefit. To this end, I wish to make the following suggestions.

First, we should deepen cooperation in energy conservation and environmental protection to address climate change. Since 2005 when we forged a partnership on climate change, we have conducted seven productive consultations and carried out a number of cooperation projects on energy and environmental protection. We should continue our consultations on institutional guarantee, funding arrangement, technological cooperation and other issues and put in place a mechanism whereby the government gives guidance and enterprises participate and play by market rules. This is what we have to do in order to comprehensively strengthen our capacity to tackle climate change. The EU is at the cutting edge of energy-efficient and environment-friendly technologies and managerial expertise. It has rolled out effective policies to ensure energy efficiency and environmental protection in industry, transport, construction and other areas. We are ready to learn from you. I hope that businesses from both sides will explore and make full use of the trade and investment opportunities that come along in the course of tackling climate change and conduct technological cooperation and exchanges in a wide range of areas.

Second, we should open markets further and oppose all forms of protectionism. The size of our trade in goods cannot reflect the depth and scope of our economic ties. We should look at our current trade and its prospects from a strategic and overall perspective. We should make the most of our complementarity, promote trade and investment liberalization and facilitation, and commit ourselves to not taking new protectionist measures against each other. We should increase coordination and consultation in the WTO Doha Round negotiations, and press for a comprehensive and balanced outcome at an early date. China strictly abides by its commitments upon WTO accession. It has taken active steps to open its market and adopted foreign trade and financial policies consistent with WTO rules. China does not seek a trade surplus that is beyond a reasonable level. To address our trade imbalance, China has sent several missions to European countries to promote trade and investment and will continue to take active measures to increase imports from Europe.

Third, we should promote trade in services and high-tech products. As China accelerates its economic restructuring, high-tech and tertiary industries are strategic priorities. The EU has a great advantage in trade in services and leads the world in many high-tech fields. There are broad prospects for closer China-EU trade cooperation in services and high-tech products. We have already set up a high-tech trade working group. We want to see it up and running at an early date so that we can draw up principles and find ways for developing and promoting bilateral services and high-tech trade, identify priority areas, and bring about substantive progress in our cooperation. I hope that the EU will relax its export control over high-tech products to China, let enterprises on both sides do business in an unfettered way, and fully unleash the industrial advantage of the EU. China is ready to expand IPR cooperation with the EU and will step up IPR protection and law enforcement to safeguard the lawful rights and interests of foreign businesses, EU companies included.

Fourth, we should further expand SME cooperation. SMEs are the backbone of the Chinese economy and the European economy and a major growth area for future China-EU economic and trade cooperation. SMEs from the EU are well-funded. They have diverse sources of financing and engage in a wide array of businesses. They have a competitive edge in capital and technology-intensive industries as well as the services sector. The bulk of Chinese SMEs are labor-intensive manufacturers and processers. They lack technical support for R&D, cultural creativity, industrial design and brand creation. There is great scope for cooperation between Chinese and EU SMEs. We should increase SME policy dialogue and provide SMEs with greater support in terms of financing, access to trade fairs and exhibitions, and investment and trade facilitation. The Chinese Government will provide necessary facilities to promote cooperation between Chinese and EU SMEs.

Ladies and Gentlemen,

Friends,

The EU is the world's largest economy while China is the world's largest developing country. Closer China-EU cooperation serves the fundamental interests of both sides. All of you present today are champions of our business communities. It is for you to tap the huge potential of China-EU business cooperation. I am fully convinced that as long as we seize the opportunities with an open mind and look to the future in a cooperative spirit, we will make steady and further progress in our business cooperation.

Thank you.

(Source: www.fmprc.gov.cn)