Dear Mr. Peter Restler,

Distinguished CAI members and associates,

Distinguished Guests,

Ladies and Gentlemen:

It is a great pleasure for me to join you today at this dinner put up by CAI, a prestigious business group. To make acquaintances with and speak to such a distinguished audience of business leaders is indeed a privilege. So please allow me to begin by expressing my heartfelt thanks to Mr. Peter Restler for the gracious invitation and kind words.

I understand CAI consists of members from both Canada and the States. Since I speak in the capacity of China's Ambassador to Canada, I will focus on China-Canada relations. But I believe the contents of my talk will also be helpful to our American friends.

Only two weeks ago the Chinese President HU Jintao paid a state visit to Canada. It was the first such visit made by a Chinese head of state to this country in 8 years. The visit was a great success. Few days later, we'll be marking the 56th national day of the People's Republic of China, and in mid October, we are going to celebrate the 35th anniversary of the diplomatic ties between China and Canada. It is only fair to say that the CAI has provided me with a good timing and occasion to speak on China-Canada relations, and I am more than happy and willing to share with you my views.

China-Canada Relations

Let me start with a general review of this relationship. This year marks the 35th anniversary of the diplomatic relations between China and Canada, but the Chinese and Canadians began their exchanges long time ago. The Chinese had already been here in this country a long time. Many of them came to build the Pacific railroad. As the former Governor General of Canada the Right Honorable Adrienne Clarkson pointed out: "Their labor helped to build our national railway, which helped create our nation." During World War II, the Chinese and Canadians fought shoulder to shoulder, over 500 Canadian soldiers laid down their precious lives defending Hong Kong. Dr. Norman Bethune, who went to China to join the Chinese fighting against Japanese aggression and worked hard to save the dying and heal the wounded, is now a household name in China because of his meritorious help to the Chinese people. Canada was among the first western nations to establish diplomatic relations with the People's Republic of China. The Chinese people will not forget what the Canadians did for them.

Since China and Canada established diplomatic relations in 1970, thanks to the joint efforts of the two sides, great headway has been made in China-Canada relations. In recent years, in particular, the leaders of the two countries have maintained frequent exchange of visits and contacts, conducting close consultation and cooperation on major issues concerning world peace and development. The two countries have worked together fruitfully in the economy, trade, science, technology, environment, culture, education and other areas.

What is worth mentioning here is the trade and economic cooperation, which has become part and parcel of China-Canada partnership, serving as an important force driving bilateral ties forward. In the past 35 years, China-Canada economic ties have evolved from small, simple-item commodity trade into all-dimensional cooperation covering trade in commodity and services, capital flows and personnel exchanges. According to Chinese statistics, two-way trade increased over 100 times from US$150 million in the early days of China-Canada diplomatic relations to US$15.5 billion in 2004. Consumer goods and household electrical appliances made in China, good in quality and affordable in prices, meet the needs of Canadian consumers. Canada's capital, technologies and managerial expertise have added fresh vitality to China's growing economy. Canada-made high-speed locomotives and buses equipped with gas-powered Canadian engines are running in China. The third-phase nuclear power plant at Qinshan has become a good example of China-Canada cooperation in peaceful use of nuclear energy. All in all, the rapid development of China-Canada economic partnership has delivered enormous tangible benefits to the two peoples.

Ladies and Gentlemen,

Now China and Canada are each other's important trade partners. However, given the size of the two economies and our respective foreign trade volume, there is still a great potential for bilateral trade and economic cooperation. At present, China-Canada trade accounts for a mere 2% of the respective foreign trade volumes. Canadian investment in China makes up less than 1% of China's FDI, while Chinese investment in Canada is barely starting. Canada, with its highly developed economy, complete industrial sectors and rich natural resources and China, with its rapid growth and huge market, are highly complementary. It is therefore a common task before the governments and business communities of China and Canada to seize the historic opportunities, expand the areas of cooperation and move our trade and economic cooperation to a new high.

Early this year, the Canadian Government introduced the important strategy of building a "Pacific Gateway", mapping out the plan for developing a trade, investment and transportation hub oriented towards the Asia-Pacific region so as to meet the growing needs for economic cooperation and personnel exchanges between Canada and the Asia-Pacific. The Chinese side appreciates this creative idea, which, we believe, will give great impetus to the economic and technological cooperation between Canada and the Asia-Pacific region and create better conditions for expanding the cooperation between China and Canada.

President Hu's visit to Canada

While we are celebrating the 35th anniversary of the diplomatic ties, President Hu Jintao's visit to Canada has expanded and added to the dimensions of the relationship. The fruitful and successful visit has brought new momentum to the further development of this bilateral relationship. During his visit, President HU had in-depth exchanges of views with then Governor General Clarkson, Prime Minister Paul Martin and people of various circles on ways to further advance our bilateral ties and reached broad agreement. The two sides have signed 7 cooperative agreements and MOUs, concerning air transportation, railways, food security, quarantine, nuclear energy and health research, which indicated that the mutual political trust between China and Canada has been further consolidated and that the mutually beneficial cooperation enjoys a bright prospect. They also agreed to bring bilateral trade volume to over US$30 billion by 2010.

But the most important achievement is that the leaders of the two countries agreed to upgrade the bilateral relations to a level of strategic partnership. They also identified specific targets to advance the comprehensive cooperation between the two countries in various fields. This move is of great significance. China and Canada, as the world's largest developing country and the world's most spacious developed country respectively, are both important Pacific-rim countries. Cultivating all-round cooperation through a strategic partnership contributes to the steady growth of our relationship, which will serve the fundamental interests of our two countries and two peoples. The two sides will work to put in place a long-term and stable cooperation framework, make full use of existing mechanisms such as the bilateral strategic working group, trade and economic joint commission and agricultural joint commission to further tap the cooperation potential and establish, if necessary, new cooperation mechanisms.

One of the premier tasks under the framework of strategic partnership is to upgrade China-Canada economic cooperation so as to reap the benefits of our respective strong points and achieve win-win results. To this end, President Hu pointed out five areas where the two sides should pool their efforts.

First, to step up mutual investment and expand the areas of investment. Right now, China is pushing for the strategy of developing its western region, rejuvenating the old industrial bases in the Northeast, promoting the rise of the central region and encouraging faster development of the eastern region. All this offers a huge market and an excellent opportunity for more Canadian investment in China. Canada is advantageously placed in all these areas. We hope that the Canadian business community will give full scope to its advantages, invest in China's high-tech industry, modern agriculture, modern services, environmental protection and infrastructure.

Second, to enhance cooperation in energy and resources and forge a long-term and stable partnership. Canada is an important producer and exporter of energy and resources, and China has a stable, large and still growing market. The Statement on Energy Cooperation in the 21st Century jointly issued by China and Canada last January has pointed out the direction for our future cooperation. Both China and Canada stand to gain from a long-term and stable partnership in the fields of energy and resources. We can step up cooperation in the research, development and use of clean and replaceable energies and deepen cooperation in the field of traditional energies. The two sides should further tap their potential and conduct strategic cooperation in energy and mineral resources with a view to achieving win-win results.

Third, to promote cooperation in service trade and cultivate new growth points in the mutually beneficial cooperation. We encourage Chinese enterprises to go abroad and engage in trade distribution, banking, insurance, securities, fund management, telecommunications, logistics, shipping and intermediary service. In the meantime, we will further open our own service industry. Some well-known Canadian financial and telecom companies have entered the Chinese market successfully and established long-term cooperative relations with China. More Canadian enterprises are welcome to develop the market and expand their businesses in China.

Fourth, to strengthen trade policy dialogue and improve the cooperation climate. China and Canada have both done a great deal to improve the environment for cooperation. We should do still more in this regard to make it even easier for goods, investment and services to enter the respective markets. The two sides should sign an agreement on protecting mutual investment as soon as possible so as to ensure a sustained and steady growth of two-way trade.

Fifth, to promote exchanges in various fields and prepare a solid foundation for enhanced cooperation. China and Canada should step up personnel exchanges in culture, education, science, technology and talent training, conduct multi-level and multi-channel exchanges and cooperation, and learn from each other through mutual promotion for common development. China has become one of the biggest sources of foreign students in Canada, and more and more young Canadian students have been attracted to China for academic pursuit. Beijing and Vancouver will host the 2008 Summer Olympics and the 2010 Winter Olympics respectively, which provides a good opportunity for the two countries to carry forward the Olympic spirit and promote cultural exchanges.

Peaceful Development to Win-win Result

Ladies and Gentlemen

With China's economy prospering, some worry that the development and emergence of China will pose threats to others. Such a worry, I believe, is totally unnecessary. China, the world's largest developing country, will keep steadfastly to the path of peaceful development. Developing the economy and improving the quality of people's lives remains the central task of China. China requires a peaceful international environment for self-development and wishes to promote world peace through her development. Clearly, to stick to the path of peaceful development is out of China's own needs. And it is also with the trend of the world. This is because that the Chinese people are keenly aware of the value of peace and have learned from their own historical experiences and lessons drawn from the world development that all peoples in the world can only achieve their goals of development by peaceful means. Such development can last and be reliable, and such development not only benefits the people in that particular country but people all over the world.

Furthermore, the philosophy of achieving harmony and being a good neighbor has a deep root in the Chinese culture. Either in the opening of the famous "silk road" more than 2000 years ago in Chinese Han Dynasty or during General Zheng He's seven epic voyages in Ming Dynasty 600 years ago, the messages sent to the countries and peoples concerned were all the same: the sincere hope of the Chinese people to strengthen exchanges, cooperation and friendship with the rest of the world. China has never sought hegemony, and never will in the future. China is forever an important force safeguarding world peace.

China firmly holds high the banner of peace, development and cooperation, continues to pursue an independent foreign policy of peace, follows the road of peaceful development, and adheres to the mutually beneficial and win-win strategy of opening up. China will unswervingly combine its own development with the progress of humanity. China's development, instead of hurting or threatening anyone, can only serve peace, stability and common prosperity of the world.

To conclude, I would like to quote President Hu: "Looking back, we find the achievements in China-Canada relations a source of great satisfaction. Looking ahead, we see a promising prospect in these relations." As Chinese Ambassador, I look forward to working together with all of you with immense confidence for the betterment of both the Chinese and Canadian peoples.

Thank you.