French President Francois Hollande meets with State Councilor Yang Jiechi at the Elysee Palace in Paris on Wednesday. Ye Pingfan / Xinhua

Speech by State Councilor Yang Jiechi at the French Institute of International Relations on April 14

Mr Thierry de Montbrial, Executive Chairman of the IFRI,

Ladies and Gentlemen,

Dear Friends,

Good afternoon. I am delighted to come back to this magnificent city for this year's China-France strategic dialogue. Yesterday, shortly after I arrived in Paris, I had meetings with President Hollande and Foreign Minister Ayrault. This morning, I had a candid, in-depth and productive discussion with Mr. Jacques Audibert, President Hollande's diplomatic adviser. We reached broad agreement on bilateral ties and major regional and international issues.

The French Institute of International Relations is a leading think tank in France and in Europe as a whole. This institute and all of you present today have made important contribution to the mutual understanding between China and Europe in general and between China and France in particular. Let me salute you and thank you for your worthy efforts.

I last visited the IFRI six years ago, at a time of deepening global financial crisis and worsening debt problem in this part of the world. The world economy was on the brink of a deep recession. Against that backdrop, the Chinese economy was among the first to turn around, and together, China and Europe sent a powerful message of jointly tiding over the difficult times and pledged to strengthen strategic cooperation based on deepening trust, equality and mutual benefit.

Now, six years on, the world economy is yet to emerge from the crisis. It still faces daunting challenges for strong growth. While the Chinese economy is in a new normal of adjustment and reform, the European economy has turned the corner and entered a new phase of steady growth. As China and Europe become increasingly interdependent, we also face a growing number of common challenges.

A friend in need is a friend indeed. It is exactly in the course of jointly confronting the financial crisis and global challenges that good chemistry occurs between China and Europe. Increasing communication has brought us closer to each other. More and more Europeans have developed a keen interest in China. They want to know more about China. And they are ready to listen to China.

At the moment, how the Chinese economy is doing is a topic of great interest, and this is what I have to say to you. There are many around the world who are optimistic about the Chinese economy. They believe that the new normal in the Chinese economy should be viewed in an objective light and that other countries should readily get accustomed to it. But there are others who have misunderstanding and even bias about the Chinese economy, worrying that it might make a hard landing or even drag down the world economy.

What is the real picture then? Let me share with you one latest figure released by China's National Bureau of Statistics early this month. China's PMI in the month of March rose above 50%, the departure point between expansion and contraction. And in recent months, investment in fixed assets has rebounded, the housing market has picked up, and the economy as a whole has regained its momentum of growth.

The Chinese economy, however, still faces a downward pressure. What's more, transformation and upgrading are invariably accompanied by some "growing pains". We will not evade those problems or deny their existence. Rather, we will rise to the challenges with every confidence. People with an objective and comprehensive perspective will see that as an anchor and a source of growth for the world economy, the Chinese economy will continue to inject positive energy to the global economic growth.

Such positive energy comes from China's enormous contribution to the world economy. China's GDP grew by 6.9% last year. The moderated growth rate is actually the intended result of China's structural adjustment. The old growth model would certainly have secured China a higher growth rate. But we now value quality as much as speed, if not more. Even a growth rate of 6.9% still places the Chinese economy at the forefront of major economies and represents the biggest increment in the world, equivalent to the GDP of a middle-income country. According to the IMF, China will be contributing 30% to global economic growth up to 2020. And it is worth noting that China is becoming a major contributor to global consumption and investment. For three years in a row, China leads the world in the number of outbound tourists as well as the amount of money they spend. Last year, the value of wine China imported was up 34% year-on-year, reaching a record high of two billion US dollars. A significant amount of that was produced here in France. In the next five years, China will import goods worth over 10 trillion US dollars and make outbound investment of over 600 billion US dollars. Later this year, China will work with other parties to host a successful G20 Summit in the city of Hangzhou. We hope this Summit will help improve global economic and financial governance. Is China a liability or an asset for a slowly recovering global economy? The answer is all too clear.

Such positive energy also comes from the good progress in China's deepening reform. Guided by a vision of innovative, coordinated, green, open and shared development, China is steadily advancing its own structural reform in a bid to lead by example in the broader structural reform of the world economy. Such reform has proved effective. Consumption has overtaken investment as the key driver of the Chinese economy. The share of the services sector in GDP has exceeded 50%. And a more telling sign is that household income and spending are growing faster than GDP. This is very much in line with China's ultimate goal of development for better livelihood and seen as a new yardstick for China's economic performance. Inspired by the government's call of "mass entrepreneurship and innovation", 12,000 new businesses get registered every day. Many of them are in such "new economy" sectors as Internet Plus, the Internet of Things and e-commerce. In the coming five years, 50 million new jobs will be added, ensuring adequate employment despite a moderated growth rate. The supply-side structural reform that China is pushing forward will further unlock growth potential. I'll just give you an example. In China, a country with near one fifth of the world's population, the number of civilian airports is only one twelfth of the world's total. This illustrates the immense room for growth in China's infrastructure and services sectors. Some China observers have pointed out that the traditional way of economic analysis, with its excess focus on data in the industry sector, can no longer capture the whole picture of a Chinese economy in transition with structural changes. I think they have made a point here.

Such positive energy also comes from China's resolve and seriousness about opening up further. When it comes to opening-up, China will not shut its door again or backtrack. Because we are keenly aware that retrogression or departure from the opening-up policy will lead us nowhere. China is striving for new progress in its all-around opening-up endeavor. It will widen market access and work on institutional improvement. The Chinese government has taken far-reaching measures to streamline administration and delegate power in the past couple of years. The purpose is to let the market play a decisive role in resource allocation. China has started its new round of reform and opening-up with a pilot free trade zone in Shanghai. New measures introduced in this pilot project, most notably the three lists for government administrative approval, i.e. negative list, accountability list and power list, have gone a long way toward trade facilitation. Such new measures will be rolled out to China's central and western regions. We will open wider the services and financial sectors and increase market access in an orderly manner. We are committed to facilitating exchanges and cooperation between foreign companies, institutions and individuals with their Chinese counterparts. We will try to do a better job in all these areas. French companies were among the first to enter the Chinese market following China's launch of its reform and opening-up program. Those French companies have expanded their presence in China in tandem with China's deepening reform and opening-up. Just to name a few of them. French nuclear companies like EDF and AREVA have been running their business in China for over 30 years. They have established themselves in the world's largest market for nuclear power. But more than that, their success has led to the thriving business of a large number of SMEs in France. The Taishan Nuclear Power Plant, which is still under construction, is expected to be completed next year and become the world's first nuclear plant using third generation technology. PSA Peugeot Citro?n has seen its market share in China soaring and performance markedly improved since China's Dongfeng Motor Group acquired its stake in 2014. Last year, the company turned around to make profits again. These are just a few examples of the kind of cooperation benefiting our two countries.

In short, while a growing China has benefited from the world, it will ensure that its own development benefits the world as well. Benefits of development and opportunities for cooperation are what China has to offer to the world.