Mrs Carnish,

Distinguished Guests,

Ladies and Gentlemen:

First of all, I would like to thank the CCBC for hosting this welcome luncheon in my honor and giving me this opportunity to meet with the Toronto business community.

As important business leaders in Canada, many of you and the companies you represent have been vigorously involved for years in advancing economic cooperation between China and Canada. Let me take this opportunity to express my deep appreciation for your contribution to the development of this important bilateral relationship.

Toronto is no strange, but rather special to me. More than 30 years ago, I pursued studies as a student in the University of Toronto. Returning to this city now, I feel a real affinity to it. And after 30 years, what strike me most are the changes, changes in the city, changes in China, changes in the world, and changes in our bilateral relations.

30 years ago when I was doing my studies here in Toronto, China was still under the cloud of the so-called Cultural Revolution that resulted in a political chaos and a serious economic stagnation in the country. And most of its population lived in poverty. At that time the relationship between China and Canada just started, with a small volume of trade and almost no other business exchanged. There were only fewer than 30 students from PRC studying in this country. 30 years later, changes and progress are simply just as real as they are dramatic.

Who had ever imagined then that in a short span of 27 years since China adopted reform and opening up in 1978, China's economy would have grown by an average 9.4% annually, bringing its GDP from $147.3 billion to $1.6494 trillion, its annual average consumption up 7% and trade 16.7%, changing the total volume of merely $20.6 billion to today's US$1.1548 trillion? Who had ever imagined that China would have the ability to dwindle its colossal 250 million poor to 26 million today in such a short span of mere two decades?

Today, China's foreign exchange reserve has increased from US$167 million to US$609.9 billion. Its highways extended from zero to 33,000 kilometers. Its installed power generation capacity built within one year topping 40, 50 even 65 million kilowatts.

30 years ago, there was not a single dollar invested by a foreign business in China. But now by the end of 2004, China had attracted a total of US$562.1 billion in FDI, approved the establishment in China of more than 500,000 foreign-funded enterprises and created a huge import market of some US$560 billion annually. And over 400 firms out of the Fortune 500 have had their establishment in China.

Indeed, the past 27 years of reform and opening up have brought about earth-shaking changes in China. Now we have basically put in place a socialist market economy system. Our productivity and overall national strength are constantly growing, social undertakings flourishing and the historic leap from subsistence to a moderately prosperous society is realized on the whole.

As a result, China has become one of the world's most dynamic countries, ranking the 5th-largest economy, the 4th largest trading power, and the 3rd largest foreign investment destination. And most important is the texture of its people's livelihood has steadily improved.

Ladies and Gentlemen,

Changes in China have heartened the Chinese people. However, there are also voices that doubt about the direction of China's development and worry that China may pose a threat to other countries and to the world as a whole. I believe these are really unnecessary.

Changes in China are really earth shaking. Nevertheless, there remain many problems and challenges in China on the road ahead posed by a large population, a weak economic foundation and uneven development, and consequently the mounting pressure arising from population, resources and environment. Despite of the considerable size of its GDP, China's per capita GDP still trails behind the 100th in the world. Especially, there are about 26 million rural population living in poverty and 22 million urban residents still depending on the subsistence allowances.

Primer Wen Jiabao made remarks on several occasions that he has a dream, a dream that one day every one of 1.3 billion Chinese people will live a better life; every one of the 26 million poor will be lifted out of poverty; every child in rural families will be able to go to school; every young man and woman will find a job when they come of age; and every citizen, especially those in rural areas, will enjoy medical insurance. This is also the dream of the entire Chinese nation.

To Canadians and all those live in the developed western countries this hardly is a dream at all. But to Chinese, to realize this dream, it still requires efforts of many generations to come. It is a long uphill journey before China achieves it.

The changes in China were self-imposed. They are the result of the summing up of the repeated detours and bitterness and sufferings the Chinese people and nation have experienced in the past 100 and more years. The whole nation realized that the country needed to change and the policies needed to be changed so that the country could adopt itself to the changing world. That's the only way out. So the recent Newsweek article rightly pointed out the reason of China's change. That is the change of policy. This policy is opening and reform. This policy is peaceful development and an independent foreign policy of peace. Deeply seated in China's history is a cultural tradition that honors promises and promotes harmony among all nations. The humiliation and bullying they were subjected to in the past have made the Chinese people cherish all the more dearly their sovereignty, peace and stability. At present, development is of overriding importance. We will stay on the path of peaceful development, devoting all our resources to development. There is neither reason nor possibility for us to threaten anyone. Even if China gets more developed in the future, it will never seek hegemony. This is our solemn pledge that will never change. Facts have shown that China cannot develop in isolation and the world needs China to achieve global prosperity. I am firmly convinced that a stable, open and prosperous China, which adheres to its road of peaceful development, will surely contribute more to world peace and common development.

Ladies and Gentlemen:

This year marks the 35th anniversary of the diplomatic ties between China and Canada. Reviewing the past 35 years, we are so pleased to see continuous development in the bilateral relations between our two countries. Since the establishment of diplomatic relations in 1970, the bond of friendship and cooperation between the two countries has been growing stronger all the time. Particularly along with China's reform and opening up, thanks to the joint efforts of the two sides, the bilateral relations in recent years have flourished, featuring frequent exchange of visits among leaders of both countries, dynamic parliamentary exchanges, increased trade, robust cultural events and close cooperation on the international affairs. Take the area of education for instance, I mentioned the few Chinese students studying from coast to coast in Canada in early 1970s, but now 55,000 of them are doing their studies in universities and colleges across Canada.

Another example is the continuous deepening economic partnership between the two sides. By the end of 2004, the trade between the two countries had set a record high of $15.5 billion, an increase of 50% over the year 2003 and 50 times that of 1970. China now is Canada's 2nd largest trading partner, and Canada ranks the 10th among China's.

Currently, there are 7936 Canadian-funded projects in China with a total paid-in investment over $4.5 billion. Many of these Canadian companies are doing quite well in China. At the same time, more and more Chinese enterprises, attracted by the favorable investment environment in Canada, are looking across the Pacific for opportunities.

Ladies and Gentlemen:

Chinese and Canadian economies are complimentary to each other. The areas and perspectives of cooperation are wide and bright. China has set its goal of development in the first two decades of this century: to quadruple the GDP of 2000 by 2020, reaching $4 trillion with a per-capita GDP of $3000, and to build a moderately prosperous society benefiting the whole population.

To arrive at this goal China will continue to expand and strengthen its cooperation with other countries and regions, Canada included. China's development will continue to create cooperation opportunities with win-win results for all its partners. In the past two months since my arrival in Canada, I see more and more facts testifying that Chinese ties with Canada have never been closer and more cooperative. Yet I also see the potential for further growth and development of those ties is far from exhausted. We live in a challenging time, but it is also a period of great opportunities. By expanding and deepening our cooperation and partnership, including our economic interchange, we will contribute much to our own people's well being and to global prosperity. Inspired by all these, I feel indeed a great honor and privilege to serve as Ambassador of China to Canada at this exciting time of booming relations between our two countries. I look forward to doing all what I can to further our relations and, in doing so, I ask for your friendship and counsel. I will count on you.

Thank you again for having me today.