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Keynote Speech at CCBC Montreal Chapter by Ambassador Lu Shaye

The Honourable Denis Coderre, Mayor of Montreal,

The Honourable Martin Cauchon, CCBC Vice-Chairman,

Ladies and gentlemen,

Dear friends,

It is my great pleasure to come to Montreal and meet with friends from industrial and commercial community of Quebec. I'd like to thank the Canada China Business Council (CCBC) for holding this luncheon.

Quebec province has played a profound and unique role in China-Canada relations. 40 odd years ago, the Canadian government established diplomatic ties with the People's Republic of China under the leadership of former Prime Minister Pierre Trudeau from Quebec, which laid the foundation for bilateral relations. More than 20 years ago, another Prime Minister, Jean Chrétien, who is also of Quebec origin, actively developed bilateral relations, and forged a Golden Decade for China-Canada relations.

And now, China-Canada relations have been entering a new Golden Era under the vigorous promotion of another Prime Minister from Quebec, Justin Trudeau. Last September, Chinese Premier Li Keqiang paid a trip to Montreal during his visit to Canada, which once again highlighted Quebec's importance in bilateral relations.

I am deeply honored to take up the post of Chinese Ambassador to Canada during the extraordinary period of the flourishing development of bilateral relations. It is my important mission to push China-Canada friendly relations for greater development on the basis of existing achievements, and I am confident about this.

There are no historical disputes or conflicts in fundamental interests between China and Canada. Both countries firmly support economic globalization and free trade, and oppose trade protectionism. In recent years, China has remained Canada's second largest trading partner, the second largest export market as well as the second largest source of import. Both China and Canada advocate innovative and green development, enjoy strong economic complementarities, boost highly synergized development strategies, and share great potential in mutually beneficial cooperation.

China advocates cultural diversity, while Canada advocates multiculturalism. People to people exchanges between our two countries are increasingly intensified. The Chinese community in Canada, with the population of more than 1.5 million, is an important bridge and tie for the development of bilateral relations.

Since Prime Minister Justin Trudeau came into office, leaders of both countries have maintained close contacts and exchanges and drawn a bright blueprint for the development of bilateral relations in the next period. Going forward, we will continue to maintain high level interactions and multi-tiered exchanges in order to enhance mutual understanding and trust. This year, we will hold the second annual dialogue between Chinese Premier and Canadian Prime Minister, and the two sides will also launch the Vice-Premier-level Economic and Financial Strategic Dialogue.

At present, officials and experts from both countries are conducting the 2nd round of exploratory discussions on China-Canada FTA. We hope to speed up the process and sign the agreement at the earliest date, so as to create better conditions and environment for cooperation between our two countries. FTA sees mutual benefit and win-win results, which will not only be helpful for China to enter the Canadian market, but also favorable for Canada to enter the Chinese market, and the latter is much bigger.

We hope to further enhance investment cooperation between the two countries. According to China's statistics, 14,000 Canadian enterprises have been set up in China, while only 270 Chinese enterprises are established in Canada. Canadian public opinions worry about that the Chinese investments will buy out Canada, which is totally unnecessary indeed. According to Canada's statistics, China's direct investment to Canada only accounts for 2.7% of Canada's total foreign direct investment, which is a very low proportion.

Dear friends,

A week ago, Chinese Premier Li Keqiang held another telephone talk with Prime Minister Justin Trudeau, during which both sides exchanged comprehensive and in-depth views on the development of bilateral relations. However, it seems that Canadian media only focus on China's expectation on Canada to ease its restrictions on high-tech exports to China.

At present, Canada's exports to China are mainly primary goods in such areas as agriculture, forestry, fishery and minerals, and China's exports to Canada are mainly manufactured goods. What can we do to not only expand the scale but also promote the balance of bilateral trade?

In my opinion, to enhance trade on high-tech goods is an important option. In fact, bilateral cooperation between high-tech enterprises is a purely commercial behavior. It is meaningless to politicalize it unfoundedly, and it is also a superfluous idea to link it to national security. Canada should realize that China has made marvelous progress in science and technology, and has been more advanced than Canada in many high-tech sectors.

China proposes bilateral trade on high-tech products in hope of not only expanding the scale and advancing the balanced growth of bilateral trade, but also improving and upgrading bilateral cooperation. Not long ago, the Canadian government approved O-Net Technologies' acquisition of the Montreal-based ITF Technologies. Here, I give thumbs up to the Canadian government as well as Montreal for leading China-Canada cooperation and following the trend of times.

After I came to Canada, many people asked me what is the most important thing during my tenure. From my perspective, the most important thing is to tap potential for China-Canada cooperation.

As is known to us all, Canada has advantages over Australia no matter in size, population or economic strength, but the cooperation between China and Canada is far from close than that between China and Australia. Last year, China-Australia trade volume doubled the China-Canada trade volume. China's investment in Australia was almost two-fold of that in Canada. The reasons are worth considering.

However, it shows that China and Canada have huge potential for cooperation. Under the complicated and changeable global economic situation, to transfer the potentials to solid outcomes is of great significance for both sides. The key is whether we have the determination and aspirations to make it happen. From my observation, the Canadian side should pay more attention to the following aspects.

First, take an objective view on today's China. China and Canada have differences in history, culture, political system and social system, but these differences shall not become the barriers for bilateral cooperation and communication. I hope that Canada, with a more open and inclusive mind and doing away with ideological bias, will no longer regard China as an abnormal country or a country that needs to guard against, and no longer feel sensitive when speaking of cooperation with China. This is actually a cold-war mentality, which is outdated. Otherwise, one will be caught in his own trap.

Second, establish a mutually beneficial and win-win cooperation concept. If we only pursue one-sided benefits, the cooperation would hardly continue and never be expanded. I hope the Canadian side to abandon its thought on suffering loses when cooperating with China, and let both sides join hands and make a larger pie of mutual benefit and win-win cooperation.

Third, let the public have a clear understanding of the benefits to cooperate with China. The mainstream public opinion supports friendly cooperation toward China, though negative voices are louder sometimes. We should lay out the benefits of China-Canada cooperation for people of two countries and win the public support. Only in this way can we strip away burdens, meet each other half way and make joint efforts to unleash potential for China-Canada cooperation.

Dear friends,

After four decades' reform and opening up, China has become the second largest economy around the world. Our development achievements have fully testified China's development path suits itself. No matter how the international situation changes, we will firmly march forward along this path and never change by external forces.

Certainly, China's development is facing accumulated problems and some challenges as well, such as smog and other pollution problems, downward pressure on economy, overcapacity of production, unbalanced development between regions as well as between urban and rural areas. The Communist Party of China (CPC) and the Chinese government are aware that these problems coincide with development, which must be resolved by reforms and development.

To this end, since the 18th CPC National Congress in 2012, the CPC has put forward strategies and decisions such as comprehensively building China into a society of moderate prosperity, comprehensively deepening reforms, comprehensively governing the nation according to law, and comprehensively managing the Party by strict disciplines, which are called the "Four-Pronged Comprehensive Strategy".

Meanwhile, in the 13th Five-Year Plan, which is the development plan for 2016 to 2020, the Chinese government explicitly raised the Five Concepts of Development featuring innovation, co-ordination, green development, open development and shared development.

In recent years, we have vigorously implemented the "Four-Pronged Comprehensive Strategy" and the "Five Concepts of Development", gaining great achievements. Here I would like to emphasize China's current economic situation.

First, China's economy maintains a medium-high speed of growth. Last year, China's gross domestic product grew by 6.7%, outpacing most of other economies. China contributed more than 30 percent of global growth. China's targeted economic growth in 2017 is about 6.5%, which can be guaranteed. The GDP for the first quarter of 2017 reached 6.9%, and main indicators were better than expected.

The International Monetary Fund recently raised its forecast for China's economic growth in this year and the next year. The report released by World Bank a few days ago also noted that China's economy is expected to maintain a sound and stable growth.

Second, employment is better than expected, and people's living standards continue to improve. Last year, China's newly added urban employment outstripped 13 million, for the fourth consecutive year. Last year, the per capita disposable income of residents in China increased by 6.3%. The number of people in poverty in rural areas was reduced by 12.4 million.

Third is the continuous upgrade of economic structure. Currently, consumption is playing a major role in China's economic growth. Last year, the contribution of consumption to economic growth was 64.6%, up by 4.9 percentage points year-on-year. In the first quarter of this year, the number reached 77.2%, up by 2.2 percentage points over the previous year. Meanwhile, High-tech industries and equipment manufacturing industry grew rapidly.

Fourth is the rapid strengthening of new driving forces of economic development. New industries, new formats, and new models are booming, while many traditional industries gain fresh vitality through transformation and upgrade. A large number of new market players emerged. Last year, an average of 15,000 new businesses were established every day, and the annual registration of new enterprises increased by 24.5% over the previous year.

Next, we will focus our efforts of boosting economic development on the following aspects:

First, we will vigorously promote supply-side structural reform and strive to enhance the quality and efficiency of economic growth.

Second, we will rely on innovation to stimulate growth momentum and market vitality.

Third, we will drive China toward both deeper and higher level of opening up. Now more than 95% newly-established foreign-funded enterprises no longer need to be reviewed and approved, but only a simple filing process. In the meanwhile, China will further ease the access for foreign capital to service, manufacturing, and mining industry. For all enterprises registered in China, whatever domestic or foreign, will be treated equally by the Chinese government when it comes to license applications, standards-setting, and government procurement, and will enjoy the same preferential policies under the Made in China 2025 initiative and other aspects.

Fourth, we will unswervingly push forward global economic cooperation to bolster common development. China actively pursues the Asia-Pacific Free Trade Area construction and Regional Comprehensive Economic Partnership agreement negotiations, to build a global free trade zone network. We have full confidence in maintaining economic development with a medium-high speed and a stable upward momentum.

Dear friends,

Montreal is a world-renowned city with high-tech industries like aerospace and aviation, nuclear power, information industry and art treasures such as movies and music. Since direct flights were opened between Montreal and Beijing, Montreal and Shanghai, China has been in closer and more convenient cooperation and communication with Montreal and Quebec. I hope that Montreal and Quebec will play a more and more important role in China-Canada cooperation.

Thank you for your attention!

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