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Surfing on China's Reform to Surge up China-Nordic Cooperation
-Speech by Ambassador Chen Yuming on 2014 Nordic China Summit

(March 21, 2014)

Dear Mr. Ragnar Gustavii,

Ladies and Gentlemen,

First of all, let us pray for all the passengers on the missing Malaysian Airline flight MH370. I am very pleased to be here today for 2014 Nordic China Summit. The summit is convened in good time as the mild spring is coming to the Nordic region. As so many Nordic business leaders involving into Chinese business sitting here, I'd like to take this opportunity to share with you the economic prospects, latest reform as well as market environment and investment policies in China.

Today my topic is "Surfing on China's Reform to Surge up China-Nordic Cooperation".

First of all, I'd like to make a brief introduction of China's macroeconomic situation. According to statistics, China witnessed 7.7% GDP growth in 2013, Fixed-asset investment increased by 19.2% and total volume of retail sales grew by 11.5%. Total trade volume registered an increase of 7.6% to 4,160 billion US$. China's overseas non-financial direct investment reached over 90 billion US$ last year. However, compared with double digit's annual growth rate in the past years, the economic slowdown in China attracted worldwide attention. Risk of hard landing of China's economy is deeply concerned. It's true that, due to the European debt crisis, China's export has been hard hit by weak external market demand, domestic consumption potential is not fully released and the growth model being overdependent on investment which resulted in a series of problems such as overcapacity, low-level duplicate construction, environmental pollution and mounting local government debts. The concern is: will China's economy collapse? Of course not. We are fully confident that China's economy enjoys a solid foundation. An annual GDP growth of 7.5% is feasible this year, which will create 2 trillion US$ import annually and make a contribution of 1% growth to global economy. Nevertheless, in order to solve the problems hindering the long-term and sustainable development of the economy, proactive and determined reform is needed.

It is under such circumstances that the Third Plenary Session of the 18th CPC Central Committee was held and opened a prelude for deepening the reform. The Decision of the Session includes five parts: politics, economy, culture, science and technology as well as ecology which are subdivided further into 15 aspects, 60 areas and more than 300 measures. The latest National People's Congress and Political Consultative Conference carried out further research on deepening reform. The implementation plans and measures will be published shortly.

The key of reform will be the economic system. It is emphasized that the market will play a key role in allocation of resources. Government intervention in microeconomic activities will be minimized. We will improve state-owned assets management system and encourage and support the healthy development of non-public sector, through which all kinds of economic ownership will be ensured of equal use of production factors and fair competition. Market access for foreign investment will be gradually liberalized in the fields of finance, education, culture and health care. Potential of private capital will be further released to "go global". An approval-based system will be replaced by a file-based system. It's also decided to accelerate the reform of financial system so that the mechanism for market-based Renminbi exchange rate formation and interest-rate liberalization could be improved.

I noticed that foreign media described the reform as "ambitious", meanwhile worried about whether the reform can be implemented without negative impacts on economic stability. I do believe a more stable, open and fair economy will be formed by reform, which will inject more impetus for global economic growth.

The reform in China also means new opportunities for Nordic countries. It is emphasized in this year's Report on the work of the government that we will open China wider to the outside world in all areas. We will continue to utilize foreign investment actively and efficiently, open up more service sectors to foreign capital, and level the playing field for domestic and foreign enterprises to compete on fair terms so as to ensure that China remains a top choice for foreign investment. We will ensure the successful building of the China (Shanghai) Pilot Free Trade Zone, upgrade exports and promote balanced growth of foreign trade. Total imports and exports are projected to grow at around 7.5% this year. We will implement policies to encourage imports, and import more products in short supply in China. We will encourage the export of complete sets of large equipment including telecommunications equipment, railways equipment, and power stations. We will strive to make progress in negotiations on agreements concerning trade in services, government procurement and information technology, and speed up negotiations on new areas such as environmental protection and e-commerce. We will continue negotiations on investment agreements with the European Union.

China and Nordic are far apart but closely linked by frequent exchanges of our peoples and sound momentum of economic and trade cooperation. According to statistics, in 2013, trade volume between China and Nordic countries totaled 39 billion US$. Nordic countries invested 123 new projects in China with a total volume of 703 million US$, an increase of 120%. While China's investment in Nordic region reached 373 million US$, ten times more than 2012. China signed 253 technology import contracts with Nordic countries, with a total contract value of 5.1 billion US$ and accounting for 38% of the total amount of EU. How could Nordic enterprises benefit from China's reform? I have three suggestions. Firstly, China is aiming to build an environmental friendly and resource conserving society. To achieve this goal, huge investment will be made and big market will be created. Nordic countries have rich experience in terms of advanced environmental protection concept, technical solutions among hundreds of excellent enterprises. We could strengthen our cooperation in these areas. Secondly, we could expand the cooperation in service trade sector. China will gradually ease control over investment access in finance, education, elderly care and other service sectors. We expect more enterprises from Nordic countries to invest in these sectors in China. Thirdly, we could further promote technology transfer based on expanding innovation and R&D cooperation. Take R&D center as an example, less than half of Swedish companies in China have set up R&D center and even fewer R&D centers of Chinese companies in Sweden. Therefore, we could do more to combine the advanced technology, R&D resource and innovation system of the Nordic countries with broad Chinese market.

Finally, 2014 is the year of horse in China's Lunar Calendar. As a Chinese idiom goes, win speedy success upon the arrival of horse. I sincerely wish all of the enterprises big success in China. Once Again thanks to our host Ernst & Young for making this Summit possible.

Thank you!

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