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Working Hand in Hand Towards a Sustained Economic Growth in the Asia-Pacific Region -Speech by President Hu Jintao of China at APEC CEO Summit

2003/10/19

Ladies and Gentlemen,

I am very pleased to attend APEC CEO Summit today inBangkok, known as "the City ofAngels". Please allow me to take this opportunity to convey my cordial greetings to you, my friends and share my observations on Chinese economy and the economic development in the Asia-Pacific region.

In the past year, we have witnessed some heartening signs in global economic landscape. According to statistics by the world's major economic organizations, world economy in 2002 increased by around 3%, better than its 2001 performance. This year, according to some forecasts, it will be slightly higher than last year, showing a growing momentum of recovery. This, of course, is upbeat news. But we must also see that global economic recovery is still in the stage of readjustment and the using is anything but robust. There are still many uncertainties before a steady world economic growth can take hold. Given this background, government and business leaders of all countries must take it as their critical task to improve the environment for economic growth and promote a sustained economic growth through effective policies and measures.

I know you are all interested inChina's current economic situation and future trends of development. Now, let me make a short briefing for you. From 1978 to 2002,Chinaregistered an average annual GDP growth rate of 9.4%. in 2002, when world economy experienced a growth slowdown, Chinese economy grew by 8%. In the first half of this year,China's GDP went up by 8.2% despite the interruption by SARS. At present, china's economy remains in good shape with a strong momentum for expansion. The 7% increase target set for this year is well within reach.

To respond to the changing domestic and international economic environment, we have adopted a series of policies and measures in recent years to enhance our economic vitality and realize a sustained social and economic development. First, we pressed ahead with the market-oriented reform under socialism and gave fuller play to the basic role of the market in the allocation of resources. We adhered to and improved our basic economic system in which the public sector plays the dominant role along with multiple non-public sectors developing together, promoted economic restructuring, political restructuring, cultural restructuring and the various reforms in social field and made them coordinate with one another to provide a powerful driving force for the country's economic and social development. Second, we firmly followed the guideline of expanded domestic demand and pursued a proactive fiscal policy and a prudent monetary policy. We took energetic steps to expand both the investment demand and the consumption demand, whereby to greatly boost our economic and social progress. Third, we vigorously carried out the strategy of revitalizingChinathrough science and education, that of sustainable development and that of develping the Western region. Recently, we set forth the strategy of revitalizingNortheast Chinaand other old industrial bases, bringing about optimization and upgrading of the industrial structure, facilitating coordinated development among regions, fostering new growth points and improving the quality and efficiency of economic development. Fourth, we intensified our dfforts ing public health, education and culture, strengthened the social security system and environmental protection, promoted social justice and progress and strive to bring about coordinated and sustainable development of the economy and society. Fifth, we increased our all-directional openness to the outside world and took part extensively in global and regional economic integration. We facilitated domestic economic restructuring through openness, encouraged Chinese enterprises to learn advanced foreign managerial expertise and get familiar with economic rules and practices in the world, thus enhancing their capacity for economic and technical cooperation and international competition.

We have identified our goal for the first two decades of this century. That is to build a well-off society of a higher standard inChinafor the benefit of well over one billion people. By the time this goal is reached,Chinawill have completed its industrialization by and large and put into place a well-developed socialist market economic system. Its GDP will have quadrupled that of 2000, topping US$ 4 trillion calculated at the current exchange rate with a per capita GDP exceeding US$ 3000. we are fully aware thatChinais the world's largest developing country with a population of nearly 1.3 billion. With underdeveloped economy and education,Chinais, and will long remain in the primary stage of socialism, and it will take us decades of strenuous efforts to turn the country into a modern society. At present, there are some outstanding problems in our economy that need to be tackled without delay, such as inadequate economic structure and industrial structure, mounting pressure on employment and social security and weakness in the protection of eco-system. We are taking some steps to address these problems. Recently, we have put forth an overall program on improving socialist market economic system and establishing a more dynamic and more open economic system. I firmly believe that so long as we follow a right development strategy, coordinate the development between the urban and rural areas, between different regions, between the economy and society, between man and nature and between development at home and opening up, we will gradually translate the goals for China's modernization into reality and make greater contribution to regional and global economic development.

Recently, the exchange rate of RMB has arrested much attention in the international community. Here, I would like to share with you my views.Chinafollows a market-based, single and managed floating exchange rate system, which is consistent with the current state ofChina's economy, its level of financial regulation and the sustainability of its enterprises. On the basis of this system, keeping the exchange rate of RMB stable servesChina's economic performance and conforms to the requirements of the economic development in the Asia-pacific region and the whole world. As you might recall, when the Asian financial crisis struck in 1997, it isChinathat insisted on not depreciating its currency and responsibly maintained its exchange rate stability when many of its neighbors substantially devalued their currencies.Chinamade its contribution to financial and economic stability inAsiaand the world at large. We will follow the same approach of responsibility to the RMB exchange rate issue this time. We will maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, while further improving the rate-forming mechanism amid deeper financial reform.

To achieve economic growth and better living standards is a goal shared by people of all lands. Given current economic slowdown in the world, we should give a full scope to APEC's role in encouraging all its members to bring about sustained economic development.

Though APEC members differ from one another in economic circumstances, they are all faced with a common task of economic restructuring. The prevailing economic situation in the region and the world at large makes the job particularly urgent and crucial. In recent years, some APEC members,Chinaincluded, have readjusted their economic structures and achieved notable results in expanding the home market, reforming the financial system and improving the corporate governance of their enterprises. These measures have enhanced the members' ability to grow the economy at their own initiative and consolidated the foundation for economic recovery in the region. APEC members should do still a better job in exchanges and communication among themselves for the purpose of drawing on the collective advantages in economic development.

Greater economic development in all members requires that they continue to promote trade and investment liberalization, remove trade barriers of one kind or another and create a fair and equitable environment of competition. I would like to emphasize here that an open, rule-based multilateral trading system serves the common interests of all APEC members. Though theDoharound of WTO talks suffered some setbacks, so long as all parties persist in consultation on an equal footing in the spirit of seeking common ground while shelving differences, it will be successful in the end. APEC can play an active role to this end by keeping up its efforts towards the Bogor Goals. In making bilateral or intra-regional free trade arrangements, efforts should be made to ensure their consistency with the WTO rules and APEC principles, so that they can contribute to greater trade and investment in the region, faster economic development and stronger capacity of members to resist economic risks.

Given the vast difference in APEC member's level of development, promoting the development of its developing members should be an important mission of the organization. We should vigorously strengthen APEC economic and technical cooperation, for it contributes to faster economic growth of the developing members, allowing them to turn their potential market into a real one. It also benefits the developed members by securing them greater market access, leading in the end to the achievement of common development and common prosperity of all members.

Realizing sustained economic growth is a complicated project of system engineering. It requires not only our efforts at formulating and implementing policies and measures for economic development but also our endeavors to effect social progress. We should renew our commitment to developing science, technology, education, culture, public health, strengthening ecological protection and environment management, rationally exploiting natural resources and bringing about coordinated economic development and harmonious coexistence between man and nature.

Ladies and gentlemen,

Realizing sustained economic growth also requires vision, courage and skills of business leaders. We should make full use of this APEC mechanism, get along with the trend of economic globalization and regional economic integration and redouble our efforts towards common development and common prosperity in the Asia-Pacific region by enhancing mutual trust, stepping up cooperation and exploring for a network of partnerships of all-round cooperation.

Thank you.

 (from www.mfa.gov.cn)



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