Premier puts forward proposals for closer China-U.S. ties
2010/09/23

NEW YORK, Sept. 23 (Xinhua) -- Visiting Chinese Premier Wen Jiabao put forward a package of proposals here Wednesday as part of the efforts to ensure that China-U.S. relations move forward on the right track and toward a better future.

Wen hailed the development of the China-U.S. ties over the last 10 years, which witnessed the steady improvement and continuous deepening of relations. He said that the two sides should boost strategic mutual trust, respect each other's interests, strengthen mutually beneficial cooperation, and expand people-to-people exchanges.

In a speech entitled "To Create A Bright Future for the China-U.S. Relations Jointly in the New Era," while addressing a night banquet held in his honor by some U.S. friendly organizations, Wen confirmed by facts and figures that China is still a developing country, and reiterated that China's basic policy of economic reforms and opening-up remain unchanged and will never chance, and that China will stick unremittingly to the pursuing of peaceful development as it bears on the fate of the nation.

He also touched upon some hot issues concerning China-U.S. relations, including China's trade surplus, the exchange rate of China's yuan, and China's investment environment at the banquet hosted by the National Committee of U.S.-China Relations and the U.S.-China Business Council.

U.S. Secretary of Commerce Gary Locke and former Secretary of State Henry Kissinger were present at the banquet.

CHINA NEVER PURSUES SURPLUS IN TRADE

China has never pursued surplus in trade, and the trade surplus is not to blame for high U.S. jobless rate, Wen said.

The interests of both China and the United States are not limited to commodity trade alone, but cover two-way investment, service trade and other areas of economic cooperation, he said.

China enjoyed consecutive trade surplus only after 1994 and in most of the years, trade surplus accounted no more than 3 percent of China's Gross Domestic Products (GDP), the premier said.

China started to turn to boosting domestic demand and increasing imports to solve the problem very early, and has recently launched an unprecedented stimulus program to bolster domestic demand, he said.

China's trade surplus dropped by 34 percent in 2009 from the 2008 level, and was down 42.5 percent during the first half of 2010 on a year-on-year basis, Wen said, adding that it now accounts for 2.2 percent of the GDP, which is at a reasonable level by world standards.

He noted that China's trade surplus over the past decades came mostly from processing trade and foreign-owned enterprises including U.S.-owned firms, which were the main beneficiary of China's export growth.

The current high unemployment rate in the United States was not caused by China's trade surplus, the premier said, because most Chinese exports to the United States are labor-intensive or low added-value products U.S. manufacturers no longer produce.

To address the Sino-U.S. trade imbalance, the two nations need to work together and place the issue into a global and multilateral context, he said.

China will continue to increase imports from the United States. At the same time, the United States should recognize China's market economy status and ease control over exports to China so as to promote free trade, Wen said.

He noted that there are nearly 60,000 U.S. investment projects in China. In 2008, U.S.-owned enterprises in China reported 146.7 billion

U.S. dollars in total sales, 72.2 billion dollars in exports and nearly 8 billion dollars in total profit. China is now one of the biggest holders of U.S. Treasury bonds and China's investment in the United States has been growing rapidly, Wen said.

DRASTIC CURRENCY APPRECIATION GROUNDLESS

Wen said the exchange rate of the yuan is an economic issue that should not be politicized.

Some people have linked the yuan exchange rate with China's favorable balance of international trade, saying China keeps the level of the Chinese yuan low to gain a competitive edge.

However, Wen said, there is no natural link between the exchange rate and a favorable balance of trade.

For example, the United States had maintained a trade surplus for more than 90 years, from the 1870s to the 1970s, but later trade surplus turned into growing trade deficit since then. Such a change was obviously not caused by exchange rate fluctuations, Wen said.

China had maintained a favorable balance against the United States and the European Union, but had a trade deficit with Japan and South Korea, an indication that trade imbalance between the two countries could not be explained by the level of the yuan exchange rate, Wen said.

He said China had always taken a highly responsible stance on the issue of the yuan exchange rate, which should be viewed in a historical perspective.

According to statistics based on the exchange rate index of the Bank for International Settlements, the yuan had appreciated by a massive 55.2 percent since January 1994 as of July this year, he noted.

Meanwhile, major currencies of the world had depreciated, with the U.S. dollar dropping 2.5 percent, the euro 3.8 percent and the Japanese yen 19.5 percent.

Following the latest global financial crisis, the currencies of many countries witnessed drastic depreciation.

During the same period, the yuan had remained basically stable, which contributed greatly to stabilizing the international financial situation and promoting a world economic recovery, Wen said.

The yuan had seen increased flexibility since June 19, when China launched further reforms of the yuan exchange rate mechanism, he said.

Wen said China had made active efforts while still facing great difficulties and a drastic appreciation of the yuan has simply no ground.

Reforms on the exchange rate, which was in accordance with China's long-term and fundamental interests, would continue, he said.

Meanwhile, China would also launch structural reforms in an active and effective way to expand domestic demand, particularly household consumption, and to promote a sustainable balance of payments, Wen said.

CHINA, U.S. NOT RIVALS BUT PARTNERS

Wen said that China and the United States were not competitors or rivals but cooperation partners.

Dialogue had always been the mainstay of ties between China and the United States, although there have been twists and turns, Wen said.

There were more common interests than differences between the two sides and calls for friendship have always overpowered the sometimes discordant shrill.

Relations between China and the United States were far more bilateral and they had global significance, he said.

Under the current circumstances, Wen said, the common interests of China and the United States were increasingly mingled. The two countries have become increasingly interdependent and the friendly exchanges between their peoples are developing in depth, he said.

In the new era, the two countries had the responsibility to ensure that their bilateral relations will always move along the track of positive and all-round cooperation.

FOUR-POINT PROPOSAL TO FURTHER ENHANCE CHINA-U.S. TIES

Firstly, China and the United States should further boost strategic mutual trust since trust is the basis of friendship and cooperation. The deeper the mutual trust, the bigger the space for cooperation between each other, Wen said.

The two sides should always look at each other in a positive light, actively push forward dialogue and cooperation in all fields, and ensure that bilateral ties will continue to develop on the right track, he said.

At present, the two sides should keep the momentum of the high-level exchanges and promote dialogue, exchanges and cooperation in political, economic, military and sci-tech fields in a comprehensive way, Wen said.

Secondly, Wen said China and the United States should respect each other's interests.

He said it is impossible that China and the Untied States see eye to eye on all issues but it is important that the two sides could handle properly when differences arise.

The two sides could get rid of interferences and hurdles and promote the healthy and steady development of their relations as long as both sides stick to the three joint communiques and the principles established by the China-U.S. Joint Statement and genuinely respect each other's core interests and major concerns, Wen said.

He said China staunchly safeguards its sovereignty, security and development interests, and the Chinese people will never compromise on issues that bear on China's sovereignty, territorial integrity and core interests, such as issues related to Taiwan and Tibet.

Thirdly, Wen said the two countries should strengthen mutually beneficial cooperation.

He said China and the United States, in line with the principles of win-win outcome and mutual benefit, should enhance cooperation in the fields of economy and trade, science and technology, education, agriculture, food safety, the fight against terror, non-proliferation and law enforcement, and open up new areas for further cooperation such as infrastructure construction, aviation and aerospace to ensure that the two peoples get real benefits from this cooperation.

And, fourthly, Wen suggested expanding people-to-people exchanges between China and the United States.

He said the two countries should continue to increase exchanges between people from industry and business, culture and education sectors, from think tanks and media of the two countries to promote people-to-people understanding and turn more people into active supporters of the development of China-U.S. relations.

Wen also expected the young people of the two countries to beef up exchanges and lay a solid foundation for the long-term China-U.S. friendship.

Wen arrived in New York Tuesday afternoon to attend a series of United Nations meetings.

Earlier on Wednesday, he attended a U.N. summit on Millennium Development Goals.

 

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