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Consul General Dr. Huang Qinguo's speech at the Asia-Pacific Business Conference of ECU

Dear Professor John Finlay-Jones, Deputy Vice-Chancellor of ECU,

Distinguished Guests,

Ladies and Gentlemen,

Good Morning,

November is a busy and fruitful month for both China and Australia. Chinese President Xi Jinping just visited Australia last week, and the result is fruitful. The substantial conclusion of the Sino-Australian FTA negotiations marks a major advancement of bilateral trade and economic partnership .The two leaders decided to lift China-Australia relationship to a comprehensive strategic partnership, bringing the bilateral relationship to a new level. I am very pleased to attend the Asia-Pacific business conference organized by ECU in this special occasion and share some of my views on situation of china’s economy and Sino-Australian economic and trade cooperation.

Dr.Huang Qinguo delivers the speech

Today, I want to focus on three aspects: Firstly, the new normal of Chinese economy. Secondly, Sino-Australian Free Trade Agreement negotiations.Thirdly, future prospects of Asia-Pacific cooperation and Sino-Australia cooperation.

First, the new normal of Chinese economy

Currently, the subsequent impact of the international financial crisis has not been completely eliminated. The world economic recovery still faces many uncertainties. China’s economy has entered a new normal of shifting from the high speed to medium- to -high speed growth and structural adjustment, bringing along some new contradictions and problems. China is in particular at present facing some downward pressure, which sparked concerns about China's economic prospects. But in the past three quarters, China's GDP grew 7.4% and maintained a momentum of steady development. The economic structural adjustment also got some positive changes.

At the APEC Leaders’ Meeting held in Beijing two weeks ago , Chinese President Xi Jinping elaborated the new normal in a comprehensive and clear way. There are three features: First, the economy has shifted from previous high speed to medium- to- high speed growth.Second, the economic structure is being constantly improved and upgraded. Third, the economy is increasingly driven by innovation instead of input and investment.

What does a new normal of China’s economy mean to the world economy?

First, Although China's economic growth slowed, the actual increment is still considerable. It should be noted that, after more than 30 years of rapid growth, China grew into the world's second largest economy. The increment in 2013 alone is equivalent to the economic gross volume of 1994, ranking the 17th in the world. According to IMF estimates, in 2014, China contributed to 27.8% of world economic growth and over 50% of Asian economic growth, which means China's economic role in boosting the world economy is still very prominent.

Second, with the economic structure being improved and upgraded, the quality of china's economic growth is more optimistic. In the first three quarters of this year, the rate of added value of the tertiary industry in GDP is 46.75%, surpassing the secondary industry.Final consumption contributed 48.5% of economic growth, demonstrating the pulling-effect of consumption. In addition, with the improvement of the environment for innovation, the role and effect of innovation to economic development will be more obvious. In the same period, China’s high-tech industry grew by 12.3%, significantly higher than the average growth of industry. Energy consumption per unit GDP fell by 4.6 percent. The Chinese government is committed to playing the role of the driving force behind innovation-driven, giving greater support to innovative enterprises, promoting the transformation and upgrading of traditional industries, and paving the way for innovation.

Third, deepening reform in a comprehensive way will inspire and inject hidden vitality into the market. With the construction and improvement of an open economic system, China opens itself wider to the outside world, China's overseas investment is expected to increase significantly in the future. To the end of 2014, China's overseas investment is expected to reach 120 billion US dollars, surpassing FDI for the first time. It is estimated that over the next five years, China’s accumulated imports will amount to more than 10 trillion US dollars, the cumulative foreign investment will be over 500 billion US dollars, and the outbound tourists will be over 500 million people.

In October, at the Fourth Plenary Session of the 18th CPC Central Committee, the major strategic deployment of promoting the rule of law was made. The goal is to build a socialist legal system with Chinese characteristics and build a socialist country ruled by law. Market and the rule of law are the two cornerstones of modern civilization, the essence of market economy is the economy ruled by law. As the Chinese economy is shifting from the high speed to medium-to- high speed growth and structural adjustment, promoting the rule of law comprehensively will be conducive to the formation of a more complete legal system, more efficient implementation system, stricter supervision system, and a stronger legal security system, so that the decisive role of market in allocating resources will be more prominent, the environment of market will continue to be optimized. This will not only release the dividends of reform and inject new impetus for economic upgrading and transformation, but also create a broader space and opportunities for economic cooperation between China and other countries, including Australia.

Second, Sino-Australian Free Trade Agreement negotiations

On November 17, Chinese President Xi Jinping and Australian Prime Minister Tony Abbott announced the substantial conclusion of 10 year long Sino-Australia Free Trade Agreement negotiations. This will have great and far-reaching significance for the consolidating and strengthening the comprehensive strategic partnership between China and Australia, for deepening bilateral economic and trade cooperation, and for the benefits of the two peoples.

This agreement will bring about 18 billion US Dollars benefits to Australia . 93% of Australian goods will be duty-free into the Chinese market in 4 years, and about ten years later this figure will reach 95%. Meanwhile, China's exports to Australia will be eventually all duty-free. Australian consumers can buy cheaper Chinese clothing, electronic products and so on. In the area of investment, both sides agreed to offer the MFN (Most favored nation) status to each other. Australia significantly reduced the FIRB (Foreign Investment Review Board) threshold to Chinese enterprises, which will make the market more accessible and transparent to investors, creating more investment and job opportunities in agriculture, finance, tourism, infrastructure construction and mining areas.In the area of service, the two sides also committed themselves to opening up numerous service sectors to each other with high quality. For examples, China will relax industry access to more than 40 service areas including medical and heath care, law and senior care.

From the market reaction, the conclusion of the agreement will bring great opportunities for bilateral agricultural cooperation. Some farmers thought the deal would put Australian dairy farmers on the same level playing field with competitors in New Zealand; WA mutton and beef manufacturers thought the agreement would bring $11 billion investment in the next 15 years;Local grain growers, horticulturists and wineries are other big winners from an agreement. The Australian National Farmers Federation said agriculture exports to China could triple within a decade;WA fishing industry council said that the lobsters which used to be transported via Vietnam will be able to reach China directly. According to other media reports, Mining magnate Gina Rinehart announced she would spend $500 million buying farms and producing infant formula for Chinese markets. Meanwhile, China's largest real estate company Greenland Group also announced that it would enter the Australian food and agricultural industries.

Generally speaking, the successful conclusion of Sino-Australian Free Trade Agreement is conducive to the complementarity and win-win result of the two country’s economy , enhancing bilateral economic and trade ties to a new high.

Third, the future prospects of Asia-Pacific cooperation and Sino-Australia cooperation

As we all know, Asia-Pacific is the region in the globe with the fastest growth, the most active growth and and an important engine of world economic recovery and development. At the APEC meeting in Beijing, China has actively promoted the FTAAP (Free Trade Area of the Asia-Pacific) process and put forward a series of major international cooperation conception such as building “One Belt and One Road”, creating the Asian Infrastructure Investment Bank and so on. China is ready to be more deeply involved in regional cooperation , and make new contribution to the Asia-Pacific Interoperability development and prosperity of the region. China also pledges $40 billion US Dollars for Silk Road Fund, to support APEC mechanism and capacity building, promote Asian infrastructure investment bank into operation as soon as possible, and to speed up the regional economic integration.

Chinese President Xi Jinping stressed at his speech when visiting Australia: “Oceania is a natural extension of the ancient maritime Silk Road, and China welcomes Australia's participation in the 21st century maritime Silk Road." China will wrok with other countries to make good use of the platform of APEC, the East Asia Summit, the ASEAN Regional Forum to push forward regional Comprehensive Economic Partnership Agreement negotiations and accelerate Silk Road Economic Belt and 21st century Maritime Silk Road construction. It is predicted that with the deepening of economic cooperation in the Asia-Pacific region, the economic cooperation between China and Australia is facing an unprecedented historical opportunity, and the prospect is more promising.

Ladies and gentlemen:

The theme of this forum is "Free Trade Agreements and Regional Integration in East Asia", which reflects common wishes to further strengthen cooperation in the region. I believe that China and Australia have been fully prepared to build a comprehensive strategic partnership, to play a more active role in the Asia-Pacific integration process, and work together to promote the development of the Asia-Pacific region.

Thank you!

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