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Premier Li’s speech at New York Economic Club

Updated: Sep 22,2016 3:40 PM     Ministry of Foreign Affairs

On the evening of 20 September local time, Premier Li Keqiang attended a welcoming dinner jointly hosted by the New York Economic Club, the National Committee on US-China Relations and the US-China Business Council at Waldorf Astoria New York, during which he interacted and exchanged views with American friends.

In his speech, Premier Li reviewed how China-US relations and practical cooperation has grown from scratch to the present stage. He said that China, the world’s largest developing country, still has a long way to go before it achieves modernization. The steady growth of the Chinese economy on a high base figure not only generates more jobs for China, but also offers a boost to the US economy. The two economies are highly interdependent. China will stay committed to reform and opening up and continue to follow the path of peaceful development. China stands ready to work with the United States in a spirit of mutual respect and win-win cooperation to expand common interests, jointly uphold the international order established since the victory of the world’s anti-fascist war, and promote strong, sustainable, balanced and inclusive growth of the world economy.

Premier Li Keqiang then answered four questions from American friends who attended the event.

William Berkley, founder of W.R. Berkley Corporation and Board Of Trustees Chair, NYU: Premier, as Chinese companies seek to do business and make investment around the world, it’s important that its market becomes open to investors around the world. How do you see that evolving, and how do you see the market of China becoming more open?

Premier Li: In the early days of China’s opening-up, we put most of the emphasis on “bringing in” foreign investment. But today, in this age of globalization, China needs to work with multinationals, and Chinese companies are making investment overseas. So now, we are paying equal attention to “bringing in” and “going global”. For a developing country like China, it is still important to attract massive foreign investment, which helps boost the Chinese economy. As you may know, total paid-in foreign investment made in China has reached $1.7 trillion. For 24 years in a row, China has been the largest recipient of FDI among developing countries. And going forward, we hope that China will remain an attractive destination for foreign investment. We need foreign investment for economic growth. And more importantly, we need new managerial expertise and advanced technologies that foreign investment brings to China. But let me make one thing clear. We place no preconditions on technological cooperation, and we don’t have a mandatory requirement for technology transfer.

At the same time, I have heard business leaders of foreign invested companies complaining about restrictions in accessing certain sectors of the Chinese market. To them I want to say this. It has not been that long since China launched its reform and opening-up program. Many sectors are still in a maturing process, which is also a process of further opening up. The areas of the Chinese economy open to foreign investment will only increase. China will open its door wider, and this door will never close. For those of you who have the capital and intention to invest in China, you are more than welcome to do so. Specific projects can be discussed later.(Laughter.)

Thomas W. Farley, Chief Operating Officer, NYSE: Premier Li, thank you so much for being here and thank you for having us in your hotel. It truly is an honor and thank you very much. The US and China need each other more than ever, and are the two strongest economies. You’ve spoken in your speech about mutual respect, and there is no doubt about mutual respect. At the same time, we have noticed the problem of mistrust between the two countries. In the US, there are negative articles in the press about currency rate setting or the respect for intellectual property in China. And the Chinese press also finds negative things about the US. My question truly is what can we do about this mistrust and how can we reduce the level of mistrust and increase the level of cooperation?

Premier Li: It’s true that there are misconceptions and differences between our two countries. But I believe the level of mutual understanding between our two countries far outweighs that of misconception and differences. It is natural to have differences on specific matters, and they need to be properly viewed and handled. Just now you said “coming to my hotel”. But I want to make a correction here for the record. That is, as far as I know, a Chinese private company has acquired stakes in the hotel, but the hotel is still under long-standing management of American businessmen. (Applause.) So I’m still staying at a hotel run by Americans. (Laughter and applause.)

Talking about media coverage of each other’s countries, I think we need to take a look at the whole picture. If you read news from a certain media, I will not name it to avoid making advertisement for it, maybe you will find some reports on the other country. Sometimes truthful and objective coverage may not get people’s eyes. But nitpicking does. Certainly if it is a well-intentioned report, even if it is critical, I believe it is welcomed, because it helps both sides to improve what we have been doing.

As for the question of the RMB exchange rate, it will take quite some time to dig into the details. In a word, there is not a basis for continuous devaluation of the Chinese currency, and China has no intention to use the devaluation of the currency to boost export, because that is not good for China’s economic upgrading.

As for how to boost mutual trust and narrow misconceptions, I think the key lies in closer mutual exchanges. As far as I know, last year, Chinese tourists made over 2.6 million visits to the US, and now there are some 600,000 Chinese students in the US. But I also know that many Americans have not been to China yet. So the key to removing misconceptions and increasing mutual trust lies in strengthening people-to-people exchanges and promoting candid discussions among them.

Susie Gharib, Senior Journalist, Fortune Magazine: Premier Li, thank you very much for your very refreshing speech and your encouraging words. Many American business leaders tell me that they are very worried about the current backlash to globalization and global trade that’s building here in the US. And I am sure you’ve heard that the candidates who are running for president here in the States have very harsh words about the loss of American jobs and unfair global trade agreements. Given that China’s economic growth really depends on global trade and you said that there is a mutual interest between our country and China, how concerned are you about this developing trend? What would you say to the presidential candidates in terms of advice, and also to the American public to reassure them that they shouldn’t worry about this?

Premier Li: I am coming to New York to attend the UN high-level events. Before I came here, some friends said to me that they don’t think I am coming to the city at the right time, since the US presidential election is at a dead heat. This is the United States’ internal affair. So for me, things I can say about this topic are very limited. But I recall that in the 1980s, during my visit to the United States, I visited the headquarters of the two presidential campaigns. At both places, I was asked whether I like the presidential candidates. To both of them I said that no matter who gets elected, I have confidence in the continued growth of China-US relations. (Applause.)

Considering my current capacity, I can only repeat what I said years ago. That is, no matter who gets elected in the US presidential election, I believe that China-US ties will continue to grow in a positive direction. (Laughter and applause.)

Tomorrow I will give a statement at the General Debate of the UN General Assembly. In my statement, I will definitely say something about globalization and trade liberalization and investment facilitation. But don’t misread it as having anything to do with the US presidential election. (Laughter and applause.)

Globalization may have some adverse impact on certain sectors and groups. But I believe that to address these downsides, we must rely on continued globalization, trade liberalization and investment facilitation, just as one must not give up eating for fear of choking on food, as a Chinese saying goes. Following in the heels of the United Kingdom, the United States has been the biggest beneficiary of globalization and trade liberalization, and China is also one of the beneficiaries. So China wants to work with all members of the international community to continue to advance trade liberalization and advance globalization as appropriate. In the meantime, we should also pay high attention to the calls of relevant groups and see to it that their concerns will be properly addressed. But all in all, I believe that the world will continue to move forward.

Robert Hormats, former Under Secretary of State: Premier Li, first, let me thank you for your very thoughtful and comprehensive speech. You’ve honored us by your leadership and your vision. My question is about global trade. As you correctly pointed out in your speech that global trade growth has been sluggish over the last several years. You also pointed out how interdependent our two countries and many others are. One of our concerns is that in many countries throughout the world, we see increased economic nationalism; we see huge domestic pressures for localization of production; we see people who are against globalization rather than improving the global trading system. Those pressures occur in the United States, China, and many other countries. So my question is what can China and the US do together to reverse this deterioration in support for the global trading system, to make sure that it thrives and becomes more open? And in particular, how can the United States and China seize the opportunities brought by the bilateral investment treaty negotiation to take the lead together in strengthening international trading rules and create more opportunities for prosperity and growth?

Premier Li: I believe China and the United States should send a common message to the international community. Both of our two countries are strong supporters of the existing global trading regime. And we both believe that we need to advance trade liberalization and investment facilitation under the WTO framework. So China and the US should work together with all other countries to send out a strong and common message. And I believe this will help prevent the anti-globalization trend from further evolving and help prevent the trade barriers and a beggar-thy-neighbor approach from emerging, so that they will not stand in the way of global economic recovery.

Secondly, I believe our two countries need to further open up to each other in both trade and mutual investment. China is sincere in further opening up its market. We have completed the quarantine procedures for the import of US beef. And we will soon have imports of beef from the United States. China is a large producer of agricultural products and animal husbandry. The US also has very good beef. Why should we deny Chinese customers more choices? (Applause.) I’m sure there would be louder applause if I say this in the US Midwest. (Laughter and applause.) As I’m in New York, I would also like to mention that we have decided to designate a Chinese bank as a RMB clearing bank in New York. We also welcome banks in New York that meet the eligibility requirements to apply for the setting up of RMB clearing banks. I’m sure that will enable smoother cross-border settlement between us. Now China and the United States are engaged in the BIT negotiation. The negotiation in itself has sent out a positive message to the business communities of both countries. China has exerted strong effort in this respect, and in just two years, has put forward revised offers three times. Now, the two countries are engaged in the 29th round of negotiation. We need the US side to meet us halfway. I believe that as long as both sides take a pragmatic and flexible approach, we will be able to arrive at a high-standard and mutually beneficial BIT.