|Premier Li Keqiang Gives a Written Interview with European Media|
Before traveling to Brussels to attend the 17th China-EU Summit and visit Belgium, and to France for an official visit and a visit to the Headquarters of the Organization of Economic Cooperation and Development (OECD), Chinese Premier Li Keqiang gives an interview with Le Soir of Belgium, La Dépêche du Midi of France, Financial Times of UK, Handelsblatt of Germany, YLE of Finland, La Agencia EFE of Spain, Rzeczpospolita of Poland and Jutarnji List of Croatia. Following is the full text of the interview.
Question 1: Europe is still under the impact of debt and financial crisis. What risks might a weakening Europe bring to world economic development and China-EU relations?
Premier Li: Europe has a strong economy and leads the world in technologies. The debt and financial crisis has not changed its position as a major force in the world. I am pleased to see that since the beginning of this year, economic recovery in Europe has picked up speed. Macro-economic figures are improving. Inflationary pressure has eased. Consumer and investor confidence has bounced back. All this shows that the reform measures taken by the EU and its member states are effective. More importantly, the European economy is largely resilient, and is expected to achieve a self-recovery. These better situations are good for Europe and conducive to recovery of the world economy.
China has all along supported the European integration process. China stood with Europe when Europe faced hard times. Europe has China’s firm support in its bid to deal with challenges of the international financial crisis and now the Greek debt problem. I have emphasized more than once that China is happy to see a prosperous Europe, a united European Union and a strong Euro, because this serves China’s interests.
This year marks the 40th anniversary of China-EU diplomatic relations. China-EU cooperation has achieved remarkable results over the past four decades. Political mutual trust has strengthened. The EU is now China’s biggest trading partner. Last year, two-way trade exceeded 600 billion US dollars. New progress is being made in cooperation across the board, including in mutual investment, infrastructure, finance as well as innovation in science and technology. China and the EU have close communication on major international and regional affairs. Relations between China and member states of the EU are also moving forward.
Today, China-EU relations face an important opportunity of further growth. The China-EU 2020 Strategic Agenda for Cooperation covers up to 100 fields, and is forward looking. Both China and the EU are making structural reforms and both have taken major and strategic steps to push forward their development agenda. I will go to Brussels and join the new EU leadership in the 17th China-EU summit. One thing important we will do is to discuss new ways to broaden China-EU cooperation in the new era. I hope we could find new points of breakthroughs and new areas of growth for China-EU relations over the coming five years and beyond, so as to bring forward our comprehensive strategic partnership.
Question 2: For your visit to France, you will be accompanied by a delegation of representatives from the banking, environment, medical and agricultural sectors. How do you see the development of economic relations between China and France and do you have priority areas?
Premier Li: China and France have long started their results-oriented cooperation, including in business and trade. Such cooperation covers a wide range of areas and is quickly moving forward to higher levels of development. It has served as a driver behind the growth of China-France relations, facilitating reform, opening up and economic development in China, and bringing benefits to businesses and the public in France. During my visit to France, I and Prime Minister Manuel Valls will attend the China-EU business summit, and will meet with representatives of the Chinese and French business communities who have directly taken part in and contributed to the development of China-France business cooperation and trade.
China-France cooperation in nuclear energy, aviation and automobiles has been effective, and French goods are highly popular in China. From the Chinese side, more and more companies have come to France and set up their presence. They are even moving from here to other parts of Europe and the world. In fact, Chinese investment in France is increasing year after year. I have noticed, though, that in China-France trade, more progress needs to be made and more potential could be unleashed so that it could catch up with other areas of bilateral cooperation and meet the growing expectation of people in both countries. We need to be creative in opening up more cooperation areas. While increasing cooperation in traditional fields of strength, we need to extend the industrial chains to create more added-value in our cooperation. Besides, more attention may be given to cooperation in finance, energy conservation and environment protection, the medical and health sector, IT application, new energies and other emerging fields, which could become new highlights of practical cooperation. During my visit, new measures will be initiated for China-France cooperation in opening third party markets. China’s strengthen in production and equipment manufacturing could be married with France’s leading-edge technologies and managerial expertise, and such cooperation could well lead to win-win results. I look forward to outcomes to be achieved during my visit concerning China-France economic cooperation that will satisfy both sides.
Question 3: This year, growth in China may slip below the 7% target. With this back ground, does China plan to redouble support for the economy in order to forestall a credit crunch and prevent a sharp slow-down in growth? If so, how does it plan to do this? Which is more important – economic rebalancing or maintaining growth at around 7%?
Premier Li: The Chinese economy performed rather stable in the first quarter of this year. The GDP grew by 7%, which, though somewhat moderated, means much more than in the past. Urban employment has increased. People’s income is higher. The environment is getting better. The overall economy is operating within a proper range. We are confident that given the following factors, China’s economy will maintain long-term growth.
First, reform and opening-up in China will unleash more dividends. The government will pursue structural adjustment through structural reform. More steps will be taken to streamline administration, delegate power and strengthen regulation. Better government service will be provided by reducing the number of items requiring administrative review and by removing the barriers that once held back market forces and the pace of development. Parallel progress will be urged on reform in the fiscal, taxation and financial systems. Besides, China will open even wider to the outside. More Chinese equipment and production capacity could enter the international market for cooperation and fair competition.
Second, China still has a bunch of policy tools at its disposal. We will not opt for strong stimulus. Right now, the global economy is in deep adjustment, and China’s development has entered a state of new normal. China will remain committed to targeted macro-regulation. It will make anticipatory adjustment and fine-tuning as proper, and be flexible in applying the host of policy tools. What is most important is to ensure stable growth, create more jobs, and improve economic efficiency.
Third, there remains huge potential demand on China’s domestic market. We will encourage mass entrepreneurship and innovation. We will take measures to increase the supply of public goods and services. We will go with the “Internet Plus” action plan and the “Made in China 2025” strategy, and strengthen information infrastructure and modern services. Consequently, more potential in domestic demand will be released to provide new driving force and sustain the stable growth of the Chinese economy.
It is important to strike a balance between growth and adjustment. Steady growth provides the basis and gives room for structural readjustment. Adjustment, in turn, bolsters steady growth, and offers a constant driving force behind medium-to-high speed of growth. Growth and adjustment are like the two sides of a coin; neither could exist without the other. China will take coordinated steps to promote stable growth and adjust economic structure. Our goal is to seek progress while ensuring that the economy is in stable performance.
In general, China’s development still has huge potential, strong resilience and much room for further progress. China has the confidence and the ability to tackle challenges. China stands ready to offer more market scope as well as more investment and growth opportunities to other countries and regions. Our cooperation could be win-win and serve our development objectives well.
Question 4: About the fight against climate change, how far is China ready to go in this effort?
Premier Li: China is firm in its commitment to tackle climate change. Active response to climate change is China’s responsibility. It will better enable the country to engage in global governance, join other countries in building a community of shared destiny and promote development for all. Tackling climate change also meets the need for scientific development in China. China focuses on green, low-carbon and circular economic development as a way to promote ecological progress. As a major responsible country, China acts in line with the principle of common but differentiated responsibilities, as well as the principles of equity and respective capabilities in tackling climate change. China undertakes international obligations that are consistent with its national conditions, development stage and real capacity.
The steps China has taken to tackle climate change are solid. In 2014, China’s energy consumption and carbon dioxide emission per unit of GDP dropped by 29.9% and 33.8% respectively over 2005, and the tendency has continued this year. The binding targets on energy conservation and emissions reduction set forth in the Twelfth Five-Year Plan are expected to be achieved on schedule. China is now the world’s number one in terms of energy conservation and the use of new and renewable energies, thus making real contribution to the global response to climate change. China is fully involved in international cooperation on climate change. By the end of 2014, China has allocated a total of 270 million yuan to support South-South cooperation on climate change. The Chinese government has decided to set up a South-South Cooperation Fund on Climate Change, and will do what it could to assist other developing countries to tackle climate change.
At the same time, I need to emphasize that for China, the largest developing country, development is always of top priority. China is adjusting economic structure to upgrade development. It hopes to grow the economy while at the same time improving the environment. The target has been set to achieve the peaking of carbon dioxide emission around 2030. China will work hard on it, and may even get to it earlier than scheduled. And China pledges to do more in energy conservation and emissions reduction. China will build up capacity in climate change mitigation and adaptation, and will contribute whatever it can to the global endeavor to open up new ways of green and low-carbon based transformation and development.
To tackle climate change is the task for all countries. China will step up policy dialogue and practical cooperation with other parties, and work with them to ensure that the upcoming Paris Conference, set at the end of the year, produces a new agreement as expected. China stands ready to work with other countries to build a global climate governance regime that is fair, reasonable and more driven by win-win cooperation.
Question 5: Finland considers the trade relations with China very important and sees large markets to our products, not only to Santa Claus but also cleantech. Which fields of the Finnish know how or products are the most interesting from the Chinese point of view in order to further enhance the trade between our countries?
Premier Li: I visited Finland back in 2009 and was very much impressed by SISU, the Finish spirit, and by the Finnish people’s friendship and goodwill towards the Chinese people. In fact, Finland was one of the first western countries to establish diplomatic ties with the People’s Republic of China. In the 65 years since then, bilateral practical cooperation has yielded fruitful results. In China, Finnish products and technologies are highly reputable, and Finnish brands, like Nokia, UPM and KONE that have entered China after reform and opening-up, are very popular with Chinese consumers. In recent years, new Finnish products and companies have kept coming to China. The Pure Finland program has introduced Finnish clean-tech and products to more and more Chinese customers, and Angry Birds has indeed made a big hit among Chinese game players. Finnish products and technologies face no restrictions on the Chinese market. It is our policy to welcome products from foreign countries, including from Finland, that meet market demand and answer the need of Chinese consumers.
China is now in the process of industrialization, IT application, urbanization and agricultural modernization. These are areas where Finland has a comparative advantage to offer. China and Finland may have more policy exchange and projects cooperation in innovation. After the Shanghai Pilot Free Trade Zone, another three zones were opened in Guangdong, Tianjin and Fujian at the end of last year, and more such zones are expected to be set up nationwide. I hope Finnish companies could seize the opportunity to export more of their technologies and products to China and raise the level of two-way trade and mutual investment.
Question 6: Does China consider the ongoing negotiations between the EU and the US for a free trade and investment agreement a threat?
Premier Li: Regional trade arrangements should be open, transparent and inclusive; the TTIP should be no exception. China will be happy to see progress in relevant negotiations. In this regard, there may be more information sharing and communication between China, the EU and other parties concerned.
China is also open to the TPP. In fact, the RCEP, the Asia-Pacific economic integration, the China-ASEAN FTA and the bilateral FTAs China has concluded with countries concerned are all aimed to facilitate free trade and investment. I always believe that bilateral and regional free trade arrangements and the WTO multilateral rules, designed to facilitate economic globalization and trade liberalization, are just like two wheels of a cart. They should really go in parallel and reinforce each other.
China and the EU are busy negotiating an investment treaty. Economic and trade cooperation very much underpins China-EU relations. Now, daily trade between the two sides almost exceeds 1.7 billion US dollars. If a comprehensive, balanced and high standard investment treaty could be reached early, it will bring opportunity for both sides to combine their respective strengths and form a new pattern of cooperation. It will generate more imports and exports of higher quality and pave the way for more practical cooperation.
In recent years, China-EU investment cooperation has flourished. The Geely-Volvo partnership is one example of success. Yet the scale of two-way investment, a mere 20 billion US dollars or less in 2014, is hardly satisfactory given the big size of the Chinese and EU economies and the huge volume of two-way trade. And that is where I see considerable room for improvement. I hope more cooperation projects could be agreed upon in infrastructure, industries, science and technology and other fields. This would require efforts from both sides. If China and the EU could conclude an investment treaty at an early date and start feasibility study for an FTA, it would boost connectivity between Asia and Europe, and help resist trade and investment protectionism and contribute to an open world economy.