Distinguished guests,

Ladies and gentlemen, friends,

It is a great pleasure to attend the International Investment Forum 2008 in Xiamen. First of all, on behalf of the Chinese government, I would like to warmly welcome all the guests coming from afar.  As the global economy and the financial sector face various challenges against the backdrop of deepened globalization, an in-depth discussion centering on the theme of “Strengthening International Investment Cooperation and Promoting Global Economic Development” becomes both relevant and forward-looking.

This year marks the 30th anniversary of China’s reform and opening up. During these 30 years, China has successfully accomplished the great historic transformation from a planned economy into a socialist market economy, and from being a closed or semi-closed country to a country open in every dimension.

Remarkable achievements have been made in social and economic spheres. The country has leaped to be the world’s 4th largest economy and 3rd largest trading power.  Its people are living a moderately prosperous life overall.  Since its accession to the WTO, in particular, China has entered a new stage of all-round opening up. Opening-up, either in terms its breadth, depth or quality, has been driven at a pace never seen before. China is so much integrated into the global economy that it has become an inalienable part of it. Reform and opening-up have not only promoted China’s economic development, institutional innovation and social progress, but also contributed to world’s economic prosperity and stability.

Nevertheless, we are acutely aware that China is still in the early stage of socialism and will remain so for a long time to come. There is still a long way to go before we achieve modernization. With the accelerated industrialization and urbanization, expedited systematic and institutional transformation and deepened reform and opening-up, China is not only facing development opportunities, but also many difficulties and challenges.  We will follow the roadmap laid down in the 17th National Congress of CPC, stick to the path of socialism with Chinese characteristics, apply the scientific outlook on development, transform the mode of economic growth from extensive to intensive, and balance growth speed with economic structure, quality and efficiency, so as to achieve a sound and rapid development of the national economy.

Since the beginning of this year, the Chinese economy has weathered severe challenges and tests. Domestically, there were catastrophic natural disasters such as the rarely-seen snow and ice storms and the massive Wenchuan earthquake. Externally, there are negative factors such as the global economic slowdown, mounting global inflationary pressure and world-wide financial market turbulences. Against such complicated domestic and foreign backdrops, we have taken a set of timely countermeasures, thanks to which the national economy is still on track to achieve the macroeconomic targets, while the overall economy remains healthy. In the first half of this year, China’s GDP was up by 10.4% year on year, while consumption, investment and export growth moved towards a more balanced direction. We are both confident and capable of overcoming the present difficulties and challenges, keeping the steady and rapid development of the national economy, and realizing the goal of reining in price surges.

Ladies and gentlemen, friends,

With the deepening of reform and opening up, foreign investment has picked up pace and gained size flowing into China, bringing along a great deal of capital, advanced technology and managerial expertise. FDI has become an important drive for the Chinese economy. The scale and quality of FDI have constantly improved. China has attracted the largest amount of FDI among developing countries in the past 16 years in a row. Many multinational companies consider China as their first choice when it comes to making investment decisions. Foreign investment is also seen in more and more fields, covering almost all sectors, ranging from agriculture, manufacturing to services.  The ways of using foreign investment has shifted from such direct investment as greenfield investment to more complex forms like equity participation, M&A and securities issuance. Meanwhile, Chinese enterprises have accelerated their pace of “going global”.

China will continue to follow unswervingly the state policy of opening up, constantly improve its policy measures on FDI inflow and outbound investment, and create broader space for the development of foreign businesses in China.

First, paying greater attention to improving the investment environment. We will accelerate the building of a service-oriented government, exercise administration according to law and through services, and improve administrative efficiency and service quality. The modern market system will be further perfected, with a strengthened legal framework and IPR protection regime so as to create a fair market environment, an open and transparent legal environment and a stable and predictable policy environment for investors. In recent years, the measures adopted by the Chinese government include a uniform corporate income tax system for both domestic and foreign enterprises, intensified environmental protection, promulgation and implementation of the Labor Contract Law and Anti-Monopoly Law.  All these are conducive to promoting fair competition among enterprises and enhancing their competitiveness for sustainable development.

Second, endeavoring to improve the quality of FDI utilization. The role of FDI in promoting independent innovation, industrial upgrading and coordinated regional development will be given full play, and the industrial structure and regional distribution of FDI utilization will be optimized. FDI will be encouraged to flow into high-tech industry, modern agriculture, energy-saving and environmental-friendly industry, modern services and service outsourcing businesses. High-end manufacturing and R&D will be encouraged in China. FDI will be guided to contribute to the revitalization of old industrial bases in areas like Northeast China, and to the development of central and western regions. Meanwhile, industries with high energy consumption and high pollution will be tightly restricted from shifting into China.

Third, constantly innovating in the ways of FDI utilization. On the basis of improving FDI policy and regulatory regime, foreign investors will be encouraged to take part in the reorganization and transformation of state-owned enterprises (SOEs) in various forms. We will encourage foreign investors to establish venture investment enterprises and perfect the venture investment exit mechanism. Multinational corporations will be encouraged to accelerate localization, establish regional headquarters, R&D centers, sourcing centers, logistic centers and operational centers in China, and cooperate more closely with Chinese supporting enterprises on personnel training, process management and market exploration.

Fourth, strengthening corporate social responsibility. Through intensified guidance and regulation, we will draw the attention of all enterprises, including foreign-funded ones, on improving working conditions, ensuring workers’ rights, adopting advanced energy-saving and environmental-friendly technologies, saving energy and resources and protecting the ecological environment on a voluntary basis. Meanwhile, we encourage their involvement in social welfare undertakings like disaster relief and social assistance programs so as to promote the harmonious and stable development of the society.

Fifth, actively supporting competent domestic enterprises to go global. Thanks to years of efforts, some Chinese enterprises have been equipped with the capability and conditions to invest in certain sectors in other countries. We encourage competent enterprises to make direct investment overseas, engage in cross-border operation, and direct enterprises to develop processing trade, support them to conduct international operations in R&D, manufacturing and marketing, and foster multinational companies and well-known brands with Chinese origin. We welcome enterprises from all the other countries to cooperate with their Chinese counterparts and jointly explore the international market.

Ladies and Gentlemen, Friends,

The Chinese government has always been committed to trade and investment liberalization and facilitation, and opposes any form of protectionism. We are ready to join hands with other countries to follow the trend of globalization, remove trade and investment barriers, address difficulties and challenges, thus contributing to world economic prosperity and stability.

Many guests present at the Forum are old friends of China, who, as witnesses of China’s history of reform and opening up, have been devoted to the exchanges and cooperation between China and other countries over the years. I hope every one can make full use of this platform, strengthen communication and understanding, reach more consensus and yield more results so as to make more contribution to international investment cooperation and world economic prosperity.

I wish the International Investment Forum 2008 a complete success!

Thank you.