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Keynote Speech at CCBC Toronto Branch by Ambassador Lu Shaye

Mr. John Tory, Mayor of Toronto,

Ms. Sarah Kutulakos, Executive Director of CCBC

Ladies and gentlemen,

Dear friends,

It is my great pleasure to attend the Canada China Business Council (CCBC) luncheon and meet with friends from industrial and commercial community in Toronto today. Toronto is the largest metropolis in Canada, and Ontario is the biggest economy in Canada. Moreover, Ontario and my hometown, Jiangsu Province, are also sister provinces.

Since I arrived in Ottawa, many people have asked me about my first impression of Canada. I said my first impression was the fresh air and clean environment. People may know that in recent years, pollution problems such as smog have seriously haunted China, especially North China. The Chinese government is sparing no efforts to handle this problem. Smog is a price that China pays for its development.

Certainly, China is currently facing other problems and challenges as well. For example, China’s economy faces downward pressure, overcapacity of production, unbalanced development between regions as well as between urban and rural areas. The Communist Party of China (CPC) and the Chinese government are aware that these problems coincide with development, which must be resolved by reform and development.

To this end, since the 18th CPC National Congress in 2012, the CPC has put forward strategies and decisions such as comprehensively building China into a society of moderate prosperity, comprehensively deepening reforms, comprehensively governing the nation according to law, and comprehensively managing the Party by strict disciplines, which are called the “Four-Pronged Comprehensive Strategy”. It is the general strategy proposed by the Chinese Community Patry to respond to the demands of China’s development under the new conditions.

Meanwhile, in the 13th Five-Year Plan, which is the development plan for 2016 to 2020, the Chinese government explicitly raised the Five Concepts of Development featuring innovation, co-ordination, green development, open development and shared development, aiming to resolve the problems or issues related to growth driving forces, imbalances and disparities in development, harmony between human beings and nature, connectivity between China and the rest of the world, and social fairness and justice, so as to realize coordinated development in economy, politics, society, culture, ecological civilization and other fields.

In recent years, under the leadership of the CPC, the Chinese government and Chinese people have vigorously implemented the “Four-Pronged Comprehensive Strategy” and the “Five Concepts of Development”, gaining great achievements. Here I would like to emphasis China’s current economic situation. Against the backdrop of sluggish global economy and the international situation with intensifying regional turmoils, China’s economy has registered a slower but stable performance with strong momentum for growth.

First, China’s economy maintains a medium-high speed of growth. Last year, China’s gross domestic product grew by 6.7%, outpacing most of other economies. China contributed more than 30 percent of global growth. In fact, the volume represented by the 6.7% growth in 2016 is much bigger than what represented by the 7.8% growth in 2012. Although the pace of increase has slowed down, the momentum of economic expansion remains powerful. China’s targeted economic growth in 2017 is about 6.5%, which can be guaranteed. I just got a fresh figure yesterday, the GDP for the first quarter of 2017 reached 6.9%.

Second, employment is better than expected, and people’s living standards continue to improve. Last year, China's newly added urban employment outstriped 13 million, for the fourth consecutive year. Last year’s unemployment rate was around 4%, the lowest level in years. As a developing country with a population of more than 1.3 billion people, it is very difficult to achieve such a relatively full employment. Last year, the per capita disposable income of the residents in China increased by 6.3%. The number of people in poverty in rural areas was reduced by 12.4 million.

Third is the continuous upgrade of economic structure. Currently, consumption is playing a major role in China's economic growth. Last year, the contribution of consumption to economic growth was 64.6%, up by 4.9 percentage points year-on-year. The service industry accounted for 51.6% of GDP, up by 1.4 percentage points over the previous year. High-tech industries and equipment manufacturing industry grew rapidly.

Fourth is the rapid strengthening of new driving forces of economic development. New industries, new formats, and new models are booming, while many traditional industries gain fresh vitality through transformation and upgrade. A large number of new market players emerged. Last year, an average of 15,000 new businesses were established every day, and the annual registration of new enterprises increased by 24.5% over the previous year.

Next, we will focus our efforts of boosting economic development on the following aspects:

First, we will vigorously promote supply-side structural reform and strive to enhance the quality and efficiency of economic growth.

Second, we will rely on innovation to stimulate growth momentum and market vitality.

Third, we will drive China toward both deeper and higher level of opening up. China is deepening the reform of foreign investment management system to speed up the implementation of the negative list, and now more than 95% newly-established foreign-funded enterprises no longer need to be reviewed and approved, but only a simple filing process. In the meanwhile, China will further ease the access for foreign capital to service, manufacturing, and mining industry. For all enterprises registered in China, whatever domestic or foreign, will be treated equally by the Chinese government when it comes to license applications, standards-setting, and government procurement, and will enjoy the same preferential policies under the Made in China 2025 initiative and other aspects..

Fourth, we will unswervingly push forward global economic cooperation to bolster common development. China advocates the main channel status of the multilateral trading system and actively participates in multilateral trade negotiations. China actively pursues the Asia-Pacific Free Trade Area construction and Regional Comprehensive Economic Partnership agreement negotiations, to build a global free trade zone network.

Dear friends,

As Chinese Ambassador to Canada, my important mission is to promote China-Canada friendship to gain greater development based on the existing foundation. I have been deeply learning about this country and thinking about the future of China-Canada relations every day since I am here. China and Canada are both important countries in the Asia-Pacific, and we both staunchly support economic globalization and oppose trade protectionism.

The two countries advocate innovative and green development and support free trade. We enjoy strong economic complementarity, highly synergized development strategies and great potential in mutually beneficial cooperation. Last year, China’s Premier Li Keqiang and Canada’s Prime Minister Justin Trudeau paid visits to each other, during which up to 50 practical cooperation deliverables were achieved in fields such as politics, economy, trade, cultural and people-to-people exchanges, ushering the China-Canada relationship into a new “Golden Era”.

Going forward, we will continue to maintain high level interactions and multi-tiered exchanges in order to enhance mutual understanding and trust. In 2017, we will hold the second annual dialogue between China’s Premier and Canada’s Prime Minister, the two sides will also launch the Vice-Premier-level Economic and Financial Strategic Dialogue.

We will continue to crystalize the deliverables of the visits by our heads of government and to step up our bilateral cooperation in various areas in a bid to realize the goal of doubling the bilateral trade by the year of 2025 based on 2015 statistics.

We hope to speed up the exploratory discussions process on pushing forward China-Canada FTA, so as to create better conditions and environment for cooperation between our two countries. FTA sees mutual benefit and win-win results, which will not only be helpful for China to enter the Canadian market, but also favorable for Canada to enter the Chinese market, and the latter is much bigger. I hope that people from Canadian industrial and commercial community can actively introduce and explain to Canadian public the benefits that Canada can get from the signing of the FTA with China.

We hope to further enhance investment cooperation between the two countries. According to China’s statistics, 14,000 Canadian enterprises have been set up in China, while only 270 Chinese enterprises are established in Canada. Canadian public opinions worry that the Chinese investments will buy out Canada, which is totally unnecessary indeed. According to Canada’s statistics, China’s direct investment to Canada only accounts for 2.7% of Canada’s total foreign direct investment, which is a very low proportion.

After I came to Canada, through reading newspapers and getting in touch with various people, I find that Canadian public have three major concerns in terms of China-Canada FTA. The first, there is prejudice against China’s state-owned enterprises, appealing to prohibit the latter from entering Canadian market. The second, people are worrying about that Chinese enterprises would buy Canadian oil sands and high-tech enterprises. The third, people propose to involve human rights into the FTA negotiations. I would like to take this occasion to make responses to these three concerns respectively.

Firstly, Canadians should not hold prejudice against China’s state-owned enterprises. China’s state-owned enterprises are a pillar of China’s national economy, shouldering important responsibilities of China’s social and economic development, providing jobs for millions of Chinese people, and offering public services such as water, electricity, gas, transportation, medical care, education to all Chinese people.

Just like other enterprises, as private-owned enterprises and foreign-invested enterprises, the state-owned enterprises are all operating according to market rules. The difference lies in that they not only pay taxes to the country, but also contribute a part of profits to the country to invest in infrastructure and public service. China’s state-owned enterprises are not evil, but a baby-sitter who cares people’s life.

Canada also has state-owned enterprises, but they have a different name. Moreover, Canada was initially built on the foundation of state-owned enterprises. In the 1960s and 1970s, Canada carried out a large-scale nationalization campaign. I do not know whether Canadians also discriminate Canadian state-owned enterprises. If the Chinese government also treats Canadian state-owned enterprises with discriminating policies, what will Canadians think about that?

Secondly, on buying oil sand enterprises and high-tech enterprises. To be honest, Chinese enterprises buying Canadian oil sand enterprises are actually incurring loss. Canadian oil sand is not competitive given the current international oil price. Even if Canadians did not disapprove of China’s investment in oil sand industry, I do not believe that Chinese enterprises would still be interested in this.

As for the cooperation between Chinese and Canadian high-tech enterprises, it is a mutually beneficial and two-way business behavior, which is not necessary to be categorized into national security. China is the victim of foreign cyber-espionage activities, rather than the perpetrator. To be frank, in many high-tech areas, China is not lagging behind but more advanced than Canada.

Thirdly, whether human rights should be involved in our FTA negotiations. I have repeatedly noted that China does not want too much non-trade or non-commercial factors in FTA negotiations. This does not mean that we are afraid of these topics, as China has managed to lift 700 million people from poverty over the last two or three decades, which is the greatest human rights achievement in human history. Why should we be afraid of it? We are not afraid of discussing it even from Canada’s meaning about human rights. We are never against democracy and human rights. What we oppose is to view one’s approach as the only viable one, still less to impose it on others.

All roads lead to Rome, and the roads to democracy and human rights differ from country to country. As an ancient Chinese saying goes, "It is natural that all things are different from one another". If countries are forced to blindly follow a designated pattern and required to copy existing modes, it will not fit, and may even result in a nature’s error. We shall not forget those catastrophic consequences made by imposing western democracy to other countries worldwide. Shouldn't we reflect on this? Therefore, the reason we don't agree to include democracy or human right issues in FTA negotiations is to avoid disputes. Or we can just do it on other occasions.

Spring is a beautiful season in Canada, and also a short season. As a Chinese saying goes, the whole year's work depends on a good start in spring, and one should make the best use of his time as time flies. I hope that we could seize these transient historical opportunities, and cooperate arm-in-arm for seeking our respective interests.

Thank you!

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