Your Excellency Chairman Yuchengco,
Your Excellencies,
I would like to begin by sincerely thanking the Philippine Ambassadors Foundation for the kind invitation. The Foundation is home to many resourceful and remarkable diplomats who have been points of connection and communication between citizens of different regions of the world and the Philippine people. Since it was founded 31 years ago, the Foundation attracted best minds and able hands on diplomatic arena, both retired and active, to constantly enrich this national pool of wisdom. It is indeed my great pleasure and honor today to stand on your rostrum and have this face-to-face exchange with you.
Your Excellencies, we are all ambassadors. I know the stakes are always high when someone tries to make a speech in front of his or her colleagues, particularly the veteran ones. After all, a diplomat is always a student in the first place. With a humble mind, I am here to learn, and to learn from you. The great country of the Philippines is another university where I am receiving further education. It is truly the University of the Philippines.
Your Excellencies, today I am going to talk about 3 topics.
I. Global Financial Crisis
Before coming here, I happened to surf on the web. The Google search engine showed 44 million results about the phrase "financial crisis". It has really become a world topic today.
Since last September, the world economy has run into the most serious challenges ever since the Great Depression in 1933 and has plunged into a serious recession. It's likely that 2009 will be the year of a negative global economic growth, the first time that the world has seen since World War II.
Countries around the world have taken steps to cope with the severe impact of the global financial crisis. Policies have been adopted to stabilize the financial sector and stimulate economic growth. Preliminary work has begun in reforming the international financial system. The crisis, however, is still spreading and deepening, and its impact on the global real economy is becoming more and more evident. The world economic and financial situation remains complex and grave. Quite a number of countries have slid into economic recession and are confronted with severe challenges in maintaining social stability. And to make things worse, the global financial crisis could become "a human and development calamity" for many poor countries, as the World Bank pointed out.
The financial crisis has brought unprecedented difficulties and challenges to China as well. We are experiencing great downward pressure on economic growth. Imports and exports have been on a decline. China's export has been growing by 15-20% over the past decade. However, the first quarter of 2009 saw about 20% fall in export. The economic growth rate came down from 9% to just about 6.1% in the first quarter of this year. Industrial production has notably slowed down. Some enterprises are having a hard time in their production and business operation, and employment is becoming more challenging for the government. This crisis also coincides with a crucial juncture in China's efforts to transform the growth pattern and adjust the economic structure. New challenges coupled with existing problems have made our task all the more an uphill one.
In the Chinese language, the word crisis is composed of two characters: Wei and Ji, respectively meaning danger and opportunity. The question is always how to turn the crisis into opportunities. Financial Summits both in Washington and London are the efforts of global leaders to find the handle to turn the crisis into opportunities of cooperation and opportunities to get on better path to growth. China has made hard efforts home and abroad and, in an active and responsible manner, joined the international battle against financial crisis.
What has China done and what will China continue to do?
We have substantially increased government spending, introduced a two-year investment plan totaling more than US$580 billion, and carried out structural tax cuts. We have repeatedly lowered interest rates and increased liquidity in the banking system. We have implemented industrial restructuring on a large scale and promoted scientific innovation and technological upgrading. We have worked hard to conserve energy, reduce pollution and protect the eco-environment. We have made further efforts to adjust the distribution of national income and worked energetically to expand domestic markets, especially rural markets. And above all, we have making unremitting effort to raise the level of social security, health care, housing and education for both the urban and rural families. These measures are producing positive initial results. The 6.1% growth in the first 3 months of this year is reasonably an encouraging one, which brings in good hope for our 8% GDP growth target. The array of measures adopted by China will have a positive impact not only on its own economy but also on the economy of the region and the world at large.
China has kept the RMB yuan exchange rate basically stable. China has taken an active part in the Global Trade Finance Program of the International Finance Corporation and decided to provide US$1.5 billion as the first portion of its financial support to the Program. We support regional development banks in providing financing services, and we will continue to coordinate with international financial institutions and relevant countries to further strengthen multilateral, regional and bilateral cooperation in trade finance. China has made utmost efforts to provide support and assistance to other countries and signed bilateral currency swap agreements worth US$95 billion with relevant countries and regions. We are ready to conclude more such agreements as circumstances may require. China will continue to work with the rest of the international community to enhance macroeconomic policy coordination, advance the reform of the international financial system, maintain the stability of the multilateral trading system and contribute its share to world economic recovery.
During the financial crises, we have one more common enemy which is the trade protectionism. Protectionism will in no way benefit the world economy and could jeopardize the international efforts against the crises. Therefore, it should never be practiced. At the same time we call for comprehensive, balanced, gradual and effective reforms of the international financial institutions, to give the developing countries a bigger voice.
It is inspiring to see stimulus packages, bank recapitalization and other actions taken by governments and central banks around the world to settle the crisis have begun to produce positive results. The clouds are breaking.
II. China-ASEAN Cooperation
The international financial crisis has also taken a heavy toll on the Asian countries. Both China and ASEAN countries are members of the Asian family. Economic globalization and regionalization have linked us more closely together. No country can stay immune from the financial crisis or overcome its impact on one's own. We should support each other to overcome difficulties just like how we coped with the 1997 East-Asia financial crisis.
China and ASEAN countries have different national conditions, but we share the common goal of accelerating economic growth, upholding equity and justice, and improving people's livelihood. We face similar challenges in tackling the international financial crisis, fighting terrorism and transnational crimes and curbing the spread of diseases and environmental degradation. And we have the same commitment to bilateral and multilateral cooperation for mutual benefit and win-win progress. Exchanges and cooperation among us in economy, investment, infrastructure development, science and technology, culture and other fields are deepening and the foundation of our cooperation is getting stronger. To counter the financial crisis, Asian countries should not only each run their own affairs well, but also step up cooperation and pull together like passengers in the same boat to promote win-win development and make Asia a key engine in reigniting world economic growth.
China has taken an approach towards building Asian cooperation. We follow a policy of making friends and partners in these areas and fostering an amicable, stable and prosperous neighborhood. In particular, a China-ASEAN free trade area with a combined population of 1.9 billion and an aggregate GDP of nearly US$6 trillion will be fully established by 2010. China initiated a proposal at the 7th ASEAN plus China, Japan and the ROK Summit in 2003 to advance the Chiang Mai Initiative Multi-lateralization. It's gratifying to see that this is now becoming a priority in regional financial cooperation and substantive steps have been taken in this regard.
Countries in East Asia share a strong aspiration to strengthen cooperation to tide over the difficulties. The East Asia Leaders' Meetings are an important mechanism for regional cooperation. China has long been actively advocating and promoting East Asia cooperation. Although the scheduled Meetings in Pataya did not take place, the Chinese side has put forward and announced important proposals on how to work together with our ASEAN friends to counter the crisis and promote East Asia cooperation. China's policies and measures on promoting China-ASEAN cooperation would remain unchanged in spite of the postponement. Ti napudpudno a gayyémmo, am-ammontó no addáka ití pelígro (A true friend is known in time of need). China would be such a friend.
In fighting the financial crisis, some developing countries have encountered the greatest difficulties and are more likely to be overlooked. Attention and assistance to developing countries, particularly the least developed countries, should be put high on the agenda of the ongoing global recovery efforts including G-20 summits. The Millennium Development Goals should not be compromised. It still happens that developed countries sometimes feel much easier to approve an investment program involving hundreds of billions of dollars than allocate funding to support developing countries in meeting the MDGs. Developed countries should pay more attention to giving financial and policy support to developing countries. Though also being a developing country, China is always ready to give a helping hand to our needy friends. China has decided to provide a total of US$40 million to Cambodia, the Laos and Myanmar to help them overcome temporary difficulties. China has also set aside 300,000 tons of rice as special reserves for the Project on East Asia Emergency Rice Reserve to bolster regional food security. And China is setting up a China-ASEAN Investment Cooperation Fund and will put in US$10 billion. China will provide the ASEAN countries with loans of US$15 billion, concessional loans of US$1.7 billion included.
China and ASEAN countries share a long history of friendly exchanges. Our relations are solidly based. Making friends is about treating each other with every sincerity. As an old saying goes, "Cooperation driven solely by profit will soon end once there is no more profit to gain." Our relations with ASEAN countries are much more than economic cooperation and trade in mutual benefit. Our relationship is a friendship of shared principles and integrity. Though there are indeed some rainy days in economic terms, I have confidence in an even sunnier future for China-ASEAN cooperation. Some optimists say there is going to be an economic revival by the middle of next year, and I hope Asia will take the lead, and we have a good chance to do that.
III. China-Philippine Relations
I am a man very much fond of sports. One of my favorite one is snooker. To be honest with you, I am a person who wants to win. Potting the balls into pockets really puts me in high spirits. However, this win-or-lose rule seems to ironically go against the times. Exchanges, cooperation and mutual benefit should be the features defining the China-Philippine relationship, especially against the backdrop of the global financial crisis. Gone should be the days when countries competed at the expense of each other's interests under a zero-sum mentality because those who preach such a competition approach and model are bound to be the biggest losers today. A person could afford to lose a set of snooker game while a country definitely should not seek odds with historical inevitability.
As Foreign Secretary His Honorable Romulo said to me, China and the Philippines are natural friends. Our peoples and cultures are intertwined by blood, friendship and history. The Philippines was among the first Southeast Asian countries to establish diplomatic relations with China. The past 34 years witnessed a steady growth of China-Philippine ties. It's fair to say that our bilateral relations have matured into a new phase of all-round development, marking the best period in history.
From 1975 to 1985, there were only 2 high-level visits between China and the Philippines. While since 1990s, frequent exchange of high-level visits has become a shining example of closer relationship between our two countries. In particular, H.E. President Arroyo paid two visits to China in 2008. H.E. Vice president De Castro has just wrapped up his visit to China. The China-Philippine trade relations suffered serious setback for more than 20 years after 1949. The situation improved modestly after 1972. Starting from 1990s our bilateral trade grew by leaps and bounds. From 2002 to 2007, bilateral trade volume maintained a high annual growth rate of more than 30%. In 2007, the bilateral trade volume topped US$ 30.62 billion. Till December 2008, China's investment to the Philippines has reached US$61.22 million and Philippine investment to China has totaled US$2.53 billion. At World Travel Fair (WTF) 2009 recently concluded in Shanghai, the Philippines was named as the "Most Popular Destination in Asia". In 2008, the number of Chinese tourists to the Philippines registered a 60% spike.
It might take another hour to exhaust the fruits of cooperation between our two countries. China sees the relationship with the Philippines from a long term and strategic perspective. I have every reason to believe that the China-Philippine Joint Action Plan to be signed in near future will provide concrete strategic direction to our bilateral relations in all sectors. We also look forward to enriching the China-Philippine Framework Agreement that will guide the conduct of our economic cooperation and trade through the next decade.
Yes, there have been differences between China and the Philippines. No doubt, there will still be some in the future. But the burden of maintaining regional peace and development bind us together. Nothing should lift this burden. Therefore, cooperation is not a choice; it is the one way, the only way, to serve our common interests. True cooperation requires sustained efforts, and more importantly, requires friends who will listen to each other, understand each other and, most of all, trust each other. Cooperation removes confrontation and consensus narrows differences. In such a spirit, the South China Sea could grow into waters of stability and prosperity.
In 2010, we will celebrate the 35th anniversary of the diplomatic ties between China and the Philippines. It would be a time to assess past progress and look ahead. A key reason behind the sound growth of our relations is that we have been able to expand common interests and, with understanding and respect, handle differences in a discreet and non-intrusive manner. As we look beyond the horizon, we see really exciting prospects. I am convinced that we will present a wonderful birthday gift to the friendship between our two countries.
Your Excellencies, again, thank you very much.
