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Remarks at the First Plenary Session of2016 FutureChina Global Forum

By H.E. Ambassador Chen Xiaodong

Singapore, 18 July 2016

Ladies and Gentlemen,

Good morning. It’s a great pleasure to join the 2016 FutureChina Global Forum and to speak at the opening plenary. On behalf of the Chinese Embassy in Singapore, I wish the forum a complete success.

This year, a strong El Niño has hit the world with a string of extreme weather events. And our global economy is also clouded by challenges.

Policies of major economies are diverging. Trade growth remains sluggish. “Black Swan” incidents such as Brexit brought even more shocks to the global financial markets. In this “new mediocre”, countries are all seeking ways to achieve stable and lasting growth.

China’s growth curve is now L-shaped, and China is on an uphill journey for economic upgrading. So we can see, our session’s theme is highly relevant.

As the Chinese economy entered the “new normal”, China has faced with many challenges, such as big downward pressure, diverging economic trends, and rising financial risks. Old drivers of growth are losing steam, but new ones are not yet up-and-coming.

But the fundamentals of the Chinese economy remain sound. It still has strong resilience, huge potential and big leeway. The solid base and favorable conditions for continued growth remain unchanged. Therefore, the L-shaped growth is actually growth at a higher level. The reforms we are carrying out will create new energy, and bring new hope for China’s economy.

Ladies and Gentlemen,

China’s economic data for the first half of 2016 just released several days ago. China’s GDP grew by 6.7%, which is 2.8 times of the world average, contributing 26% to the world growth.

CPI rose a mild 2.1%. Household income increased by 6.5%. Hi-tech and equipment manufacturing industries grew by 10% and 8% respectively.

There are drops in PPI and trade figures, but much narrower. And China’s trade now generates nearly 50% of all Asian export in goods, more than the US and the EU combined.

Employment figures are excellent. In the first 6 months, more than 7 million new jobs were created in the cities, completing 71% of the annual target. These figures show that the economy is stable and making steady progress.

The stable and sound performance of China’s macro economy gives us hope for continued growth of the China. Such a hope is well founded.

First, supply side reform is making China’s economy slimmer and more healthy.

We have made initial progress in cutting over-capacity, reducing inventory, de-leveraging, lowering costs and strengthening weak links.

The first half of 2016 saw a fall in coal and steel production. The ‘inventory of ‘industrial products dropped, the leverage rate and operation costs for businesses were lower, and visible progress was made in shoring up weak links in investment.

At the same time, we are streamlining administration, delegating more powers and transforming government functions. We are also further reducing corporate tax and easing market access for private businesses.

Second, the Chinese economy is improving in quality, efficiency and structure. This is reflected in three aspects, the services sector, consumption and urbanization.

The services sector now outweighs manufacturing in our economy. End consumption contributes more to the economy than investment. And urbanization rate is now over 56% and still rising. All these continued to inject new strength into the economy.

Third, the Chinese economy is cultivating new driving forces while enhancing the old ones.

We mapped out the “Made-in-China 2025 Plan”. The first half of 2016 saw 6% profit increase in China’s major industrial corporations.

We are also promoting the use of new technologies, such as “Internet plus”, big data and cloud computing. We are facilitating the growth of new industries, new forms of business and new products and services, fostering new sources for medium-to-long term growth.

Ladies and Gentlemen,

Many are following very closely on China’s Belt and Road initiative. Since its inception 3 years ago, more than 70 countries and organizations have joined in the initiative. Bilateral trade between China and participating countries has reached more than 1 trillion US dollars, accounting for a quarter of China’s total trade.

China’s direct investment in 49 participating countries amounted to nearly 15 billion US dollars, an 18% increase year-on-year. China has signed production capacity cooperation agreements with 20 participating countries, and jointly set up 46 overseas cooperation zones with 17 participating countries, creating 60,000 local jobs.

The AIIB, the Silk Road Fund and other financing platforms have all started operation. Within this year, the AIIB is expected to have over 90 member states. AIIB’s first batch of loans worth 500 million US dollars is about to be allocated, and its annual financing plan is set at 2 billion US dollars.

The Belt and Road initiative is gaining greater momentum and will bring more opportunities to China and to the countries along the routes.

In this difficult time for the global economy, the world is looking to the G20 Hangzhou Summit this September.

The theme of the Hangzhou Summit is building an innovative, invigorated, integrated and inclusive world economy. It will focus on both macro-economic coordination and practical cooperation, both stable growth in the near future and stronger foundation for long-term growth.

We look forward to working with Singapore and other countries concerned to draw a blueprint for world economic growth and sound global governance.

Ladies and Gentlemen,

China’s reform and opening up over the past three decades and more has never been plain sailing. And we often have to deal with negative publicity and fortune-tellers by some western media. Yet by overcoming difficulties, China has grown all the way to be the second largest economy.

During last year’s FutureChina Global Forum, Prime Minister Lee Hsien Loong expressed confidence in China’s economic prospects, and the forum also offered suggestions on China’s economic upgrading. Your views and insights are what defines this Forum and what makes us believe in the bright future of China’s economy.

Thank you.

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