Create More "Firsts" in

China-New Zealand Friendship and Cooperation

Keynote speech by H.E. Li Keqiang

Premier of the State Council of the People's Republic of China

At the Welcoming Gala Luncheon in New Zealand

Auckland, 28 March 2017

The Rt Hon Prime Minister,

Ladies and Gentlemen,

Kia Ora! It is a great pleasure for me to come to beautiful Auckland and meet friends both old and new today. On behalf of the Chinese government, I would like to express heartfelt appreciation to our host the government of New Zealand for the very warm hospitality and thoughtful arrangement accorded to the Chinese delegation. My high tribute also goes to all those who have long been committed to and supported the growth of China-New Zealand relations.

This is my third visit to the "land of the long white cloud". With its natural beauty famed as "100% Pure", New Zealand presents nothing short of a feast to the eye. Here one cannot help but feel light-hearted even with a full agenda of official business.

Although our countries are located in different hemispheres and thousands of miles away from each other, the friendly interactions between our peoples date back centuries. As early as in 1866, more than 1,000 Chinese laborers traveled across the rough seas to arrive at Dunedin. For many years, Chinese-New Zealanders have contributed their share to local development through hard work. In 1927, Mr Rewi Alley went to China and spent 60 years in my country, sharing both happiness and suffering with the Chinese people. He has since become a symbol of the friendship between our peoples.

Over the past 45 years since diplomatic ties were established, China-New Zealand relations have maintained steady and sound development. Now our relationship is at its best ever, with cooperation in various areas reaching unprecedented breadth and depth.

Politically, our countries enjoy close high-level interactions and deepening mutual trust. The relationship was elevated to a comprehensive strategic partnership during President Xi Jinping's successful visit here in November 2014, marking a new milestone in the development of our relations.

Economically, China is the largest trading partner of New Zealand. Despite the headwinds of the international financial crisis, trade between our countries has continued to grow by 12% annually on average during the past eight years, reaching nearly US$12 billion in 2016. One third of China's imported dairy products come from New Zealand. Two-way investment has gained momentum, with total stock of mutual investment topping US$8 billion.

On people-to-people exchanges, our cooperation has yielded fruitful results. About 60,000 Chinese students are now studying in New Zealand, the largest foreign students community in this country. And over 400,000 Chinese tourists have visited New Zealand, making China your second largest overseas tourism market. We have pioneered a "Three Brothers" partnership which brings together a New Zealand university and two Chinese universities, one from Eastern and the other from Western China in a unique cooperative arrangement. This has become a highlight in our people-to-people exchanges.

The number of our sister provinces/states and cities has grown to 34 pairs. The Chinese language has gained growing popularity in New Zealand. This has been evidenced by the presence of three Confucius Institutes and 29 Confucius Classrooms. More and more local schools now offer Chinese language courses.

New Zealand has been a pace-setter among Western developed countries in terms of relations with China. It was the first Western developed country to conclude bilateral negotiations on China's accession into the WTO, the first to recognize China's full market economy status, the first to sign a bilateral free trade agreement with China and the first to become a founding member of the Asian Infrastructure Investment Bank. All these "firsts" speak volumes about our pioneering, special and exemplary relationship, which has delivered real benefits to both peoples.

The friendship between our countries is a good example to show that differences in size, social system and cultural tradition as well as geographical distance do not necessarily stand in the way of growing bilateral ties. So long as countries treat each other with respect and as equals, and view each other's development as opportunities rather than challenges, they can always find common ground while shelving or even transcending differences and become good friends and partners who understand and trust each other. Just like the Pacific Ocean that never dries up, our friendship and cooperation enjoys limitless potential and great vitality.

Ladies and Gentlemen,

Economic globalization, featuring trade and investment liberalization and facilitation, has been an important driving force for the fast growth of the world economy in the past decades. As far as I can see, one of the secrets to New Zealand's success is its pro-trade approach, and its readiness to embrace economic globalization and swim in the vast ocean of global competition. Similarly, China owes a great deal to opening up in its fast development over the past 30-plus years. The experience of both our countries has shown that only openness and inclusiveness can lead a country to prosperity and development.

The international political and economic landscape has been going through profound and complex changes. The backlash against globalization, emerging isolationism and resurgent protectionism all pose challenges to the existing international economic order and system. After 15 years of negotiations, results from the Doha Round have fallen short of expectations. Regional economic integration encountered setbacks, as some countries turn notably inward in policy priorities. All this has cast a dark shadow over the already-fragile global economy. People are worried about the prospect of economic globalization.

Both China and New Zealand have been beneficiaries and important contributors to economic globalization. We hold the same position and have acted in concert on this issue. No matter how the international environment will evolve and what development stage China reaches, we will always remain committed to opening up wider to the world.

China wants to work with New Zealand and others to jointly forge a community of shared future for mankind, and improve the global economic governance system to make economic globalization work for more countries and more communities. It is important to jointly uphold the authority and effectiveness of the multilateral trading regime, take an active part in multilateral trading negotiations, and comply with WTO rules.

China believes that regional free trade arrangements should be open and transparent. We are ready to accelerate the negotiations for the Regional Comprehensive Economic Partnership and advance the building of a Free Trade Area in the Asia-Pacific. We are also open to any other free trade arrangements that are conducive to regional economic integration.

China advocates free trade; we also believe in fair trade. The two are not at odds with each other; they are the two sides of the same coin. Free trade is the very premise for fair trade. Without free trade, there will be no fair trade to talk about. No one should write off free trade just because issues such as trade deficit may arise. A closed-door policy will not resolve the issues; nor will it benefit anyone. Although China runs a trade deficit with New Zealand, we have not resorted to protectionist measures. Instead, we insist on expanding market access to each other to make the pie of our shared interests bigger. We believe this is the right way to go. All countries need to categorically reject protectionism, exercise restraint in the use of trade remedies, and avoid politicizing or escalating trade frictions. Trade wars will not lead to fair trade; it will only hurt free trade.

Economic globalization has become deeply interconnected with the trend of peace, development and cooperation. It would not have come this far without a generally peaceful international environment for nearly 70 years. Our world is now seeing heightened geopolitical risks, escalating tensions in regional hotspots and conflicts and rising non-traditional security challenges such as terrorism and refugee crises. All these are eroding the foundation of peace and development. The Asia Pacific is home to both China and New Zealand, and its peace and stability concern both our countries. Regional countries, big or small, all bear responsibilities for peace and stability in our region.

The situation on the Korean Peninsula is complicated and delicate. China calls on all parties concerned to refrain from words and deeds that are perceived as provocative by the other side and escalate tension, work to calm down the situation and return to the track of dialogue.

With respect to the South China Sea, China has been calling for resolution by parties directly concerned through consultation and negotiation. It is our hope that countries outside the region will do more that is conducive to peace and stability. Freedom of navigation and overflight in the South China Sea has never been a problem. In the framework of fully and effectively implementing the Declaration on the Conduct of Parties in the South China Sea (DOC), China and ASEAN countries are actively advancing consultations on a Code of Conduct in the South China Sea (COC) and have made good progress. Things are turning in a positive direction and this is in the interest of peace and stability of the region and the whole world.

The untold sufferings that have been inflicted upon the Chinese people by warfare and turmoil has made us all the more aware of the value of peace and stability. China will remain committed to its road of peaceful development and the tendency of countries to seek hegemony as they get powerful will never be repeated in China's case.

Ladies and Gentlemen,

My visit to New Zealand is both for friendship and cooperation. Yesterday, I held talks and reached a series of important consensus and outcomes with Prime Minister English. We both agreed that the development of the China-New Zealand comprehensive strategic partnership serves the fundamental interests of both countries. In a complex and volatile world, it is all the more important for us to stand firmly together and respond to an uncertain external environment with stable development and cooperation.

— We should deepen political mutual trust. Mutual trust provides the basis for the smooth development of state-to-state relations and has underpinned the sound growth of China-New Zealand relations over the past 45 years. We should fully exert the guiding role of high-level exchanges for overall bilateral relations, conduct timely exchange of views on major issues concerning our respective development, and work to deepen the China-New Zealand comprehensive strategic partnership.

We should enhance contacts between government departments, legislatures and political parties and at the subnational level and make good use of dialogue and consultation mechanisms in various sectors and at different levels. We should advance judicial and law enforcement cooperation and conclude a bilateral extradition treaty to better combat transnational crimes. We should maintain sound communication and coordination at multilateral institutions and forums such as the UN, APEC and East Asia Summit to uphold our common interests.

— We should align our economic development strategies. With so many overlapping areas in our economic agenda, synergizing our development strategies can help us identify the direction and priorities for cooperation. New Zealand is located in the South Pacific, a natural extension of the 21st Century Maritime Silk Road. Our two sides have signed documents on strengthening cooperation under the Belt and Road Initiative, with a focus on infrastructure and connectivity cooperation. China encourages capable and well-reputed companies to take part in infrastructure development in Wellington, Auckland and Christchurch through various forms. We also welcome more New Zealand companies to make investments and set up ventures in China, particularly in the vast central and western regions.

— We should expand and upgrade bilateral trade. Given our distinctive products, wider opening of our markets both ways will give a strong boost to our trade ties and may send our trade figure higher than 30 billion New Zealand dollars in the next few years. The announcement by our governments during this visit to hold the first round of China-New Zealand Free Trade Agreement Upgrading Negotiations is an important indication of our commitment to take business cooperation to an even higher level, and sends a positive message for promoting global trade liberalization and facilitation.

I hope the two sides will seize the opportunity of the negotiations to upgrade our cooperative partnership in agriculture and reach new consensus on trade in services and competition policy. With farm product trade now accounting for half of our bilateral trade, China is ready to import more high-quality farm products from New Zealand. We will provide facility for the export of chilled beef and mutton from New Zealand to China. We hope New Zealand will import more farm products from China. And our two countries can step up exchanges on agro-technology, farm management and food safety to upgrade our agricultural cooperation.

— We should intensify people-to-people and cultural exchanges. The cultures of different ethnic groups and nations of our world are all flowers in the garden of human civilization, which draws strength and splendor from its diversity. Progress of any culture can only be achieved through openness, inclusiveness and learning from others. Both China and New Zealand are committed to multi-cultural exchange and assimilation. We should firmly uphold the diversity of civilizations and encourage exchange and mutual learning among them, rather than mutual suspicion, exclusion, and conversion.

China stands ready to work with New Zealand to promote two-way student exchanges, enhance cooperation in talents training and vocational education, and strengthen the "Three Brothers Partnership". During the visit, both sides agreed to set up a Chinese cultural center in Auckland, making New Zealand the first Western developed country to host two Chinese cultural centers. The two sides have also designated the year 2019 as the China-New Zealand Year of Tourism. China welcomes New Zealand's decision to extend automated border processing system SmartGate to and introduce five-year multiple entry visas for Chinese citizens. This will facilitate our personnel exchanges. We should fully leverage the platforms of Confucius Institutes and China-New Zealand Mayoral Forum to promote cultural brands such as Happy Spring Festival celebrations and encourage more exchanges between our universities, think tanks, media and youth, so that China-New Zealand friendship will be passed down from generation to generation.

Ladies and Gentlemen,

Now let me give an update on the Chinese economy, which I believe is of interest to many of you here. In the past year, the world economy faced grim and complicated challenges, which has aggravated the downward pressure on the Chinese economy. Against this backdrop, the Chinese government did not resort to massive stimulus measures. Instead, we kept on pursuing reform and innovation to stabilize growth, restructure the economy and fend off risks.

After much painstaking efforts, we steadied the economy and generated positive changes in economic performance. Our GDP grew by 6.7% last year, among the fastest in the world, contributing over 30% to global economic growth. In the first two months of this year, the Chinese economy kept moving in a positive direction while maintaining stability. Industrial electricity consumption, rail, road and waterway freight, private investment, and import and export all posted faster growth. Corporate profits and fiscal revenue both rose substantially.

The growth target we have set for 2017 is around 6.5%, and we will strive to do better in practice. The main purpose for setting such a target is to focus people's efforts more on the supply-side structural reform to further improve the quality and performance of our economy. At the present stage, every one percent of growth would equal 1.5 percent growth five years ago or two percent growth ten years ago. The 6.5% growth this year will generate more additional economic output than 6.7% growth last year.

In the course of its development, China has benefited much from opening up to the world. In view of the changing circumstances at home and abroad, we will open up wider and at higher levels by building around the Belt and Road Initiative, and pursue win-win and all-win results with the world. In the coming five years, China is expected to import eight trillion US dollars worth of goods, attract 600 billion US dollars of foreign investment and make 750 billion US dollars in outbound investment. Chinese tourists will make 700 million overseas visits. This will create huge business opportunities for New Zealand and countries across the world.

Ladies and Gentlemen,

I would like to end with the wise words of Sir Edmund Hillary, a well-known New Zealand mountaineer: "It is not the mountain we conquer but ourselves." China and New Zealand have set many records with our cooperation, and we will only create more milestones in the future. Let's seize the opportunity of the 45th anniversary of our diplomatic ties, work together for better and faster progress in China-New Zealand relations, and open up an even brighter future for our peoples.

Thank you.