At Luncheon Hosted by the Swiss Economic and Financial Community
Zurich, 24 May 2013
Your Excellency Federal Councilor Schneider-Ammann,
Your Excellency President Jordan,
Ladies and Gentlemen,
Dear Friends,
I am delighted to meet you, friends of the Swiss economic and financial community, in the city of Zurich. Switzerland is a shining pearl on the European continent and one of the world’s strongest financial powers. It is home to a large number of multinational companies and international organizations. This is my first overseas trip after becoming the premier of China. I have chosen Switzerland as my first stop in Europe, because we have very close and friendly relations with Switzerland.
Switzerland’s modern industries and agricultural sectors have provided the foundation for the development of advanced financial and service industries. Swiss-made precision instruments, industrial goods and agricultural products will soon enjoy very low tariff rate when exporting to China, and the same preferential treatment will be provided for Chinese products entering Switzerland. That is because China and Switzerland have reached a deal on the FTA agreement.
The FTA agreement has not come easily. My previous visit to Switzerland took place in the beginning of 2010, when the global economy was still in the grip of the international financial crisis. From Zurich to Bern and to Davos, I was all the way thinking about what China and Switzerland could do to deepen cooperation and meet the challenges together. It was during that visit that the leaders of Switzerland and I agreed to launch the FTA negotiations. Over the past three years and more, the two sides have made dedicated efforts to expand common ground while reserving differences, and completed nine rounds of consultations. This afternoon, President Maurer and I will jointly witness the signing of the MOU on the conclusion of FTA negotiations. I am confident this blueprint will be turned into a reality.
China-Switzerland FTA is a fruitful agreement with high quality and rich content. It not only covers trade in goods and services, but also includes new trade issues such as environmental protection, labor and employment, intellectual property and market competition. The two sides have agreed to provide low- or even zero-tariff treatment to the vast majority of each other’s products, and advance liberalization and facilitation of trade in services, including the financial sector. This will help reduce the cost of transactions, promote the development of companies through competition, better leverage the fundamental role of the market in resources allocation, and generate momentum for economic globalization.
The significance of the building of a China-Switzerland FTA goes beyond the two countries. It is China’s first FTA with a country from the European continent and with one of the world’s top 20 economies. It is a milestone achievement. First, it is good news for China-Switzerland business cooperation. It will make our rules and policies more transparent, and help “made in China” and “made in Switzerland” products, each competitive in their own ways, gain access to the other side’s market more easily, and bring benefits to the companies and consumers of both countries. Second, it is good news for China-Europe relations. Switzerland is closely linked with the EU member states and the euro zone economies, and it is an important bond connecting Chinese and European enterprises. Third, it is good news for global trade and investment liberalization and facilitation. China and Switzerland are respectively the world’s second and nineteenth largest economies, and the second largest trading nation in the world and Europe. The FTA agreement reached between China and Switzerland can serve as a model and guide for other countries.
The conclusion of the FTA agreement with Switzerland fully shows that China stands ready to open wider to the outside world and takes the accelerated implementation of the FTA strategy as an important step in its opening-up. Although China is a large economy in aggregate terms, its per capita GDP is still very low, and it still has a long way to go before achieving modernization. We will remain committed to following the path of peaceful development and pursuing the win-win strategy of opening-up. And the building of FTAs is an important strategic focus of our endeavor. Up to date, China has signed 11 FTA agreements with 19 countries and regions, and FTA negotiations with some other countries are also well underway. We will make unremitting efforts to advance these negotiations. China will be more active in opening to the outside world, and work with its FTA partners to reap the “dividends of opening-up” in the new era, unleash more “reform dividends” and share greater “development dividends”. China’s service sector is relatively underdeveloped, and the size of trade in services is only equivalent to about 1/8 of that of trade in goods. This has proven to be a constraint on the transformation and upgrading of the Chinese economy. We need not only high-quality products but also better services. We will promote further opening in such service sectors as logistics, finance, business, medical services and education, and accelerate the development of the service industry.
We have noticed that the United States is pushing forward negotiations on the Trans-Pacific Partnership (TPP) and preparing to launch negotiations with Europe on a Transatlantic Trade and Investment Partnership (TTIP). Given the number of participating countries and the combined size of their economies, these agreements will have a major impact on the pattern of international trade and the process of trade and investment liberalization. In principle, China is open to all cooperation initiatives that are conducive to trade liberalization and regional economic integration. We are happy to see them come to fruition as long as they are consistent with multilateral trading rules and the principles of openness, inclusiveness and transparency. The United States and Europe are major economies and important players in the multilateral trading system. We hope that the relevant negotiations will contribute not only to their respective trade growth, but also to the progress of Doha Round negotiations so that the benefits of free trade can be better shared by the people of developing countries. China is taking active steps to get the wheel of multilateral trading system and the wheel of regional trade arrangements moving at the same time, and we are opposed to trade and investment protectionism in all forms.
I want to point out that the Chinese side is highly concerned about the anti-dumping and countervailing duty investigation recently launched by the EU against Chinese PV products and wireless telecommunication equipments. Anti-dumping and countervailing duty investigation against these two types of products will not only seriously hurt the relevant industries, companies and jobs in China, but also undermine the vital interests of European users and consumers. It serves no one’s interests, but only fuels the rise of protectionism. That is why we are firmly opposed to it. In the current economic environment, countries should work together to uphold a stable and open international trade environment and exercise caution with the use of trade remedy measures. China has consistently called for settling trade frictions through dialogue and consultation. We hope the EU will properly deal with the cases of PV products and wireless telecommunication equipments, uphold the larger interests of China-EU economic relations and the principle of trade liberalization.
Ladies and Gentlemen,
Switzerland is an important international financial center with a well-established and dynamic financial sector. It is home to numerous renowned financial firms and known as the country with the highest density of banks. The city that hosts today’s event, Zurich, is an international financial center. During my visit this time, I will announce with the Swiss leaders the establishment of a financial dialogue mechanism to enhance cooperation on bilateral and international financial issues. Now, I wish to share with you some of my observations on economic and financial issues.
First, we are committed to deepening reform and opening-up of China’s financial sector. Since the beginning of reform and opening-up, China’s financial sector has enjoyed rapid growth together with the modernization of the country. However, to sustain this momentum of growth remains a long and arduous task. Currently, China’s financial sector has a total asset of over RMB 150 trillion and a foreign exchange reserve of US$3.4 trillion. There is a huge potential for making full use of China’s financial assets and reinvigorating the financial market. Going forward, we will unswervingly advance market reform of the financial sector, build a sound modern financial system, accelerate the development of a multi-tiered capital market, and steadily advance the liberalization of interest rate and exchange rate. In the meantime, we will deepen cooperation between Chinese banks and their foreign strategic investors, open the stock, bond and insurance markets in an orderly way, promote the cross-border use of the RMB and, over time, achieve the RMB’s convertibility under the capital account and expand the breadth and depth of opening-up in the financial sector. We will promote reform, development, economic transformation and innovation in the course of opening-up to achieve the sustainable and healthy growth of the Chinese economy. This will also create opportunities for the economic growth and development of the financial industry of the world.
Second, we believe countries should ensure the stability of their financial and economic policies. In the new situation, members of the international community should continue to commit to the common goal of ensuring strong, sustainable and balanced growth of the world economy, pursue macroeconomic policies that help stabilize growth and generate jobs, advance fiscal and financial reforms, guard against the risk of global inflation, and maintain the stability of international financial markets. When introducing the monetary policy of quantitative easing, major economies should also take into account its negative spillover effects on other countries, and at the same time, properly resolve the issue of government debt, repair their financial sector as quickly as possible, and create conditions for achieving global financial stability, market recovery and economic growth.
Third, we hope the international financial system will be reformed and improved. China is committed to upholding and building the international political and economic order, and stands ready to fulfill its due obligations as a developing country and an emerging economy. China believes that we need to give priority to and actively advance the reform of the International Monetary Fund (IMF) and the World Bank, and make fuller use of the role of the IMF in resolving the European debt issue. We believe that the existing sound and effective international economic system and rules must be upheld. In the meantime, efforts should be made to push forward reform, strengthen international financial supervision and regulation, encourage regional financial cooperation, and enhance the voice and representation of developing countries. We will continue to work with the international community to pool our wisdom and build consensus, and jointly reform and strengthen the international financial system.
Ladies and Gentlemen,
Switzerland is a front-runner among European countries in growing relations with China, and has set many records in this regard. In the beginning of 1950, soon after the People’s Republic was founded, Switzerland became one of the first countries in the West to recognize China. In 1980, when China had just opened its door to the outside world and when many foreign companies were still unsure about China, a Swiss company launched the first industrial joint venture in China. Entering the new century, when trade protectionism was resurfacing in some countries, Switzerland became the first European country to recognize China’s full market economy status. And this time, Switzerland is again the first country on continental Europe to sign an FTA agreement with China. I am confident that with the joint efforts of the two countries, there will be many more “firsts” in our future relations.
Although China and Switzerland are situated respectively in Asia and Europe, the vast Eurasian continent has brought us together. The Himalayas and the Alps, where the highest peaks of Asia and Europe are, inspire us to meet difficulties head on and scale new height of global economic cooperation. China and Switzerland both have the courage and determination to always be the first in the world, and that is exactly why our bilateral relations have grown from one generation to another and become a model of friendly exchanges between countries with different social systems and culture. We should preserve and promote this enterprising spirit, and ensure China-Switzerland relations will always stay ahead of history, ahead of the times and at the forefront of the world and continue to strive for excellence.
Thank you.
