Honourable Lord Powell,

Ladies and Gentlemen,

It is a great pleasure for me to attend this dinner hosted by the China-Britain Business Council and meet friends from the British business communities.  Over the years, you have contributed to closer economic co-operation and trade between China and the United Kingdom and increased understanding and friendship between the two peoples, for which I would like to express our heartfelt thanks.

As you are all very keen on finding out how China's economy is doing and where it is headed, please allow me to take this opportunity to give you an update.

China has made remarkable progress in the past two decades and more since the beginning of reform and opening-up.  A socialist market economic system has been basically set up and an all-directional opening-up pattern taken initial shape.  Despite a complicated and highly changeable international environment, China's economy has managed to grow fairly rapidly in recent years.  In 2000, our GDP topped $ 1 trillion, ranking the 6th in the world, and our foreign trade reached US$474.3 billion.  We have attracted more foreign investment than any other developing country for eight consecutive years.  Our people's living standards have on the whole reached the comfortable level.  China has entered the new century brimming with vigour and dynamism.

Since the beginning of the year, Chinese economy has been affected by the global economic slowdown.  The rising curve of our exports has been tapering off.  Thanks to our sustained efforts to expand domestic demands, increase exports and attract foreign investment, our economy has been able to maintain the growth momentum.  In the first three quarters, our GDP grew by 7.6% on the year and imports and exports reached US$376.4 billion, up 9% on the year.  Presently, China's foreign exchange reserves stand at US$200 billion.  We remain confident that our economic growth rate for this year will be between 7-7.5%.

Given its large population, weak economic foundation and inadequate development, China remains a developing country.  It will take long and persevered efforts to turn it really into a strong and prosperous nation.  In the early 1960s of the last century, Chairman Mao Zedong said in a conversation with visiting Marshall Montgomery that it would take another 100 years for China to become economically strong and catch up with developed capitalist countries like Britain.  Mr. Deng Xiaoping designed a three-phased development strategy for China.  Having completed the first two phases ahead of schedule, we are currently working on the third one, namely, to basically realise modernisation by the middle of the century and turn China into a strong, prosperous, democratic and culturally-advanced socialist country.  The coming five to ten years forms a critical period for China's economic and social development.  During the tenth Five-Year Plan period, which we began to execute this year, China's expected annual growth rate will average about 7%.  By 2010, our GDP is expected to double and reach US$2 trillion.  As we strive to meet these goals, we are faced with both challenging difficulties and favourable conditions.  We are rich in human resources and our market is very big.  With continued economic and social development, the enormous potential of the Chinese market will be further brought out.  To give an example, in the coming five years, China will import about US$1.4 trillion worth of equipment and technologies, build 10,000 kilometres of highway, increase the power generation capacity by 52,000 megawatt, and increase the recoverable reserve of crude oil by 95 million tons and that of natural gas by 37 billion cubic meters.  The number of telephone subscribers will grow from 280 million to 500 million and that of Internet users to 200 million.  The promising Chinese market will offer even more business opportunities to foreign investors.  Business people of the UK are most welcome to be part of China's modernisation drive.

Ladies and Gentlemen,

Opening the country to the outside world is our basic and long-term state policy.  While taking an active part in economic globalisation, we have worked hard to carry out international economic co-operation in greater scope and depth.  Our 15 year-long negotiation for WTO membership is an important part of such efforts.  It is indeed gratifying that this wish is about to become true.  Over the years, the British government and our friends from the British business communities, including those at present, have actively supported China in its bid to join the WTO.  Let me take this opportunity to express our sincere thanks.  China is a responsible nation. Once entering the WTO, we will earnestly fulfil our rights and obligations and play our due role in promoting economic development and trade around the world.  We take note of your high expectations on China's economic development and market accessibility, particularly opportunities in financial services after China joins the WTO.  I am happy to tell you that China is committed to opening still wider to the outside world in an all-directional and multi-tiered way, with an even more active approach.  Such sectors as finance, insurance, telecommunications, trade, commerce, transportation, construction, tourism and intermediary services will be open gradually to foreign investors.  We will vigorously seek new ways and new channels to attract foreign capital and allow foreign investors to set up equity or contractual joint ventures or solely owned businesses in the above-mentioned sectors in accordance with Chinese law and regulations.  While making more areas gradually available for opening-up, we will adopt open, transparent and equality-based policies on trade and investment, continue to improve the environment for investment and business operation, encourage fair competition, offer national treatment so as to increase investor confidence and predictability in China.  As the 21st century unfolds, people around the world will see an even more open China.

Ladies and Gentlemen,

In recent years, our relationship has gathered a good momentum of growth, as buttressed by steadily increased common interests and deepened mutual understanding and mutual trust.  Top leaders of both countries have placed high importance on developing the relationship.  Bilateral exchanges and co-operation in various fields have kept expanding and producing rich results.  All this serves as a sound basis for even closer co-operation in trade, economy and other endeavours.  Recently, thanks to concerted efforts, two-way trade has grown steadily, approaching US$10 billion last year and totalling US$7.58 billion in the first three quarters of this year.  Of all the EU members, Britain has become the second largest trading partner of China and its largest investor for years running.  Already investing in nearly 3,000 projects, including some large ones in petro-chemical facilities, airport and bridges where good progress has been made, Britain is now working with China to gradually promote co-operation in financial services.  While we are pleased with the continued development of our commercial ties, we must not lose sight of the great untapped potential for co-operation.  In our priority development areas like infrastructure, telecommunications, energy and environmental protection, Britain is strongly competitive and should, therefore, seek to play a bigger role.  We take note of your concern over the current trade imbalance.  We are equally serious about this problem and are ready to take active steps to increase imports from Britain.  Right now, both the mix and level of China's imports and exports, as well as the foreign investment China seeks to attract, have undergone significant changes.  For example, we need more hi-tech products and personnel with managerial and professional expertise.  As international competition for the Chinese market share intensifies, China enjoys greater leverage in choosing its partners consistent with market rules.  Friends from British business communities are welcome to explore new areas while consolidating their traditional advantages, readjust their export mix to China to include more hi-tech products, step up technological transfers and realise a balanced trade by constantly increasing the trade volume.  I have learned with pleasure that China-Britain Business Council and China's MOFTEC have recently jointly launched the UK-China Investment Partnership, which represents a useful effort to further expand our investment co-operation and hopefully bring bilateral economic relations to a new high.

The United Kingdom is among the earliest Western countries to trade with the People's Republic of China.  In the new circumstances, we hope that the British business people known for their pioneering spirit will seize the opportunity and participate in the competition on the Chinese market with longer and wider perspectives.  The Chinese Government will help create more favourable conditions for you, so that you can make money.  I am confident that with concerted efforts, the mutually-beneficial co-operation between China and the UK will have broad prospects and bear even richer fruits.

Thank you.