Minister of Commerce Chen Deming delivered on November 28a keynote speech at the CAIJING Magazine Annual Conference 2013 with the topic of Forecast and Strategy. full text is as follows:

A Keynote Speech by Chen Deming at CAIJING Magazine Annual Conference (Full Text)
　　
(November 28, 2012, Beijing)

Ladies and gentlemen, friends:
Good afternoon!

2012 is drawing to close, all circles of society are beginning to analyze achievements of 2012 and making plans for the coming year. By the opportunity of the CAIJING Magazine Annual Conference, I would like to take advantage of the conference to discuss world economy and China's economy in 2012, and comment on the situation in 2013.

1. The Chinese economy, especially foreign trade and economic cooperation, has achieved stable development amid the difficulties

As it was predicted in the beginning of the year, the world economy has been showing signs of depress in 2012. The unemployment rate in the developed economies remains high, with weak economic growth; the emerging economies are facing great pressures of inflation, with slow economic growth; European sovereign debt crisis is getting worse, triggering volatility in global financial market, causing tremendous uncertainty of world economic recovery. Multiple factors resulted in greater downward pressures for world economy, and it is predicted that the annual growth in 2012 is only 3.3%, 0.6 percentage points lower than that of 2011. Global trade volume rose by only 2.5%, 2.5 percentage points lower than that of 2011, far less than the average annual growth rate of 6% over the past 15 years. Transnational direct investment was about US$ 1.6 trillion, 25% lower than that of US$ 2.1 trillion in 2007, the highest on record.

The Chinese government has strengthened and improved macro-control amid the complex and tough international economic situations, focusing on stabilizing growth, adjusting structures, promoting the reform and benefiting people’s livelihood, and positive achievements have been made. China's GDP rose by 7.7% year-on-year in the first three quarters, and the goal of annual growth rate of 7.5% could be achieved without a doubt. And the Chinese government introduced a series of policies and measures in accordance with the WTO rules to stabilize foreign trade growth as weak external demand persists, and foreign trade enterprises have increased efforts in adjusting structures and exploring the market, maintaining a steady growth of foreign trade. Import and export in the first 10 months reached US$ 3.2 trillion, up by 6.3% year-on-year, and the annual growth rate might be lower than expected, it is still expected to remain stable or even increased in global market share; foreign trade structure was continuously optimized, with the proportion of exports of machinery and electronic products, exports from Central and Western China and exports to emerging markets further increased. We have made efforts to improve investment environment, promoting the diversification of foreign investment utilization, and optimizing the industrial structure and regional distribution for foreign investment, and the utilized foreign investment in the first 10 months reached US$ 91.74 billion, although down by 3.5%, it has surpassed the United States to rank the first in the world in the first half of 2012;Utilized foreign investment in the service sector has achieved a positive year-on-year growth regardless of real estate factor, and utilized foreign investment in Central and Western China has maintained a relatively fast growth. We have improved policies and regulations to strengthen planning and guidance, public services and protection of rights and interests, and encouraged all enterprises to "go global", and non-financial direct investment overseas reached US$ 58.17 billion in the first 10 months, with an increase of 25.8%.

2. Technological innovation, trade and investment are major engines that could take the world economy out of crisis

The recovery of world economy is full of ups and downs, which shows that the deep impact of the international financial crisis has not been removed. At the outbreak of the crisis, both entrepreneurs and scholars believe the crisis was unusual. The tortuous development process of world economy in the past four years corroborated the above opinion. From subprime mortgage crisis of the US in 2007 to the international financial crisis in 2008, and to the sovereign debt crisis, residents, enterprises and governments of the developed economies are in the tough de-leveraging process, most of which are in a dilemma between tight fiscal policy and economic growth, and have almost reached the limit of utilization of fiscal and monetary policies. In view of the economic cycle, world economy is currently at the bottom of the long-term economic cycle, and will keep the low growth for a relatively long period. It may be a long way to go before it steps out of the crisis and get on the fast growth track.

The economics theory tells us that economic development needs a breakthrough in technology and market. The great breakthrough in science and technology can increase production efficiency, create new supply capacity and social demand, and stimulate a new round of economic prosperity; the rapid development of trade and investment can give full play to the competitive advantages among different countries and regions, integrate and utilize global resources, realize economies of scale, form a broader world market and speed up economic development. Since this century, the Internet technology has been getting mature and been applied extensively, and transportation conditions has been improved and its costs decreased. It promoted the fast development of information industry, and drove the development of traditional manufacturing industry. It also significantly decreased cost of international trade and transnational investment, promoted the development of worldwide industrial vertical division of work, brought along the vitality of transnational investment and flourishing of international trade, and advanced the process of economic globalization. We can say that without breakthrough in Internet technology and the rapid development of international trade and investment, the prosperity of world economy in the beginning of this century would have been hard to be realized.

Currently, the world economy’s completely stepping out of crisis and realizing stability and recovery still needs the driving of technological innovation and trade and investment. At present, all countries have been expanding investment in technological R&D, and vigorously fostering emerging industries. A new round of technological reform and industrial revolution is toughly bred. The so-called “third industrial revolutionary” is becoming the hot topic of the international community, which is featured by the combination of the Internet and renewable energy, integration of manufacturing and service sector, technologies such as 3D printing which break traditional manufacturing process, and decentralized and individualized production and operation modes. However, technological innovation needs a long incubation period: major technological breakthrough is usually a chance occurrence, and it also needs a period for scientific and technological achievements to finally transfer into production capacity. Against this background, if world economy expects to shake off the crisis, it should pay more attention to trade and investment liberalization and facilitation. Regretfully, since the outbreak of the international financial crisis, some countries have adopted conducts in opposition of free trade, and promulgated many trade protectionist measures of “encouraging export and limiting import”. According to the monitoring of the WTO, since October of 2008 to this October, G20 members have put out 858 new trade restriction measures. Some members can not do as what they have said, and have made huge obstacles to the recovery of world economy. We sincerely hope that all countries can abandon the idea and conduct of “benefiting oneself at the expense of neighbors” and “being concerned only for oneself”, firmly oppose all kinds of protectionism, and insist on expanding openness and joining efforts, so as to promote the strong, sustainable and balanced development of world economy.

III. China will insist on the implementation of a more proactive strategy of opening up and achieve mutually beneficial and win-win with the countries around the world.

Since the international financial crisis, China has strengthened coordination of macroeconomic policies with countries in the world, made efforts to expanding imports while stabilizing external demand, accelerated the pace of foreign investment while effective utilizing foreign capital, which not only achieve the stable development of domestic economy, but also made a positive contribution to the recovery world economy. China's economic contribution to world economic growth rate was 20.4% in 2011. Imports amounted to US$1.7 trillion, accounting for the proportion of the world increased from 6.7% in 2007 to 9.5%. The proportion of trade surplus in GDP decreased from 7.6% to 2.1%, in a reasonable range of internationally recognized. Non-financial direct investment overseas increased from US$ 24.9 billion to US$ 68.6 billion, with an average annual growth of 29%.

Looking forward to the year of 2013, the process of the recovery of world economy still remains difficult and tortuous. Latest forecast of global economic growth rate by IMF next year is only 3.7% and that of by WTO is only 4.5%. The growth rate is higher than that of in 2012, but still lower than the growth rate before financial crisis. Faced with complex and difficult world economic situation, MOFCOM will fully implement the spirit of the 18th NCCPC and more open strategy, comprehensively improve the level of the open economy, continuously improve mutual benefit and win-win, multi-balanced, safe and efficient of the open economy, and accelerating the transformation of foreign economic development mode.

(1) to promote the balanced development of foreign trade; While consolidating and improving the traditional advantages, MOFCOM encourages transformation from exports to technology, brands, quality and service, and promote the change from “made in China” to “create in China”. While maintaining stable export growth, MOFCOM should actively expand the imports of advanced technology, energy resources, key equipment, spare parts imports, as well as moderate expansion of imports of consumer goods. While improving the quality and efficiency of trade in goods, MOFCOM should develop trade in services, and actively undertake international service outsourcing.

(2) to improve the comprehensive advantages of the utilization of foreign trade; MOFCOM should improve the utilization of foreign investment laws and regulations, serious study common practice of the international investment rules, deepen the reform of foreign investment system, expand the fields of opening up, optimize the investment environment and simplify approval procedures, strengthen the protection of intellectual property rights, and provide favorable conditions for foreign business, and promote the combination of introducing capital, technology and professionals.

(3) to accelerate the pace of foreign trade; MOFCOM should improve the strategy of "going out", promote the construction of service assurance and risk control system, enhance the ability to respond to the risk of investment cooperation and emergencies, encourage domestic enterprises to invest and cooperate overseas, support enterprises in research and development, production, sales and other aspects of international operations and guide China’s foreign enterprises to fulfill their social responsibilities actively in the local areas, and provide power for the host country's economic development and employment.

(4) to improve the regional pattern of opening up. MOFCOM should make efforts to innovate open mode, driven the opening up of the regional development, promote open economy in coastal areas to transformation and upgrading first of all, speed up the inland areas, cultivate global manufacturing base, and accelerate the pace of opening up and development of the border regions, create a new pattern of division of labor cooperation, complementary advantages, balanced coordinated regions.

(5) actively support the multilateral trading system; Adhere to the WTO to promote global trade, investment liberalization and main channel status facilitation, encourage all parties to reach a consensus as soon as possible on the early results of the Doha Round, establish a balanced and win-win multilateral trading system; Properly resolve economic and trade differences through consultations, reduce and eliminate barriers of trade and investment.

(6) speed up the implementation of the FTA strategy. China will adapt to the new trend of regional economic cooperation development, adopt the strategy of “exchanging openness with openness”, take initiative in negotiation on high-level free trade agreements with balanced interests, increase the liberalization and facilitation of international trade and investment, and create a more open and fair development environment. At the recent East Asia Summit meetings, China and related countries jointly announced the initiation of China-Japan-ROK FTA negotiation and Regional Comprehensive Economic Partnership (RCEP) Agreement negotiations.

All in All, China will stick to the concept of openness as always, and will strive to make unremitting efforts for the stability and recovery of world economy while ensuring the stable and relatively rapid development of its own economy.

May the CAIJING Magazine Annual Conference succeed!

Thank you.