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Transcript of Chinese Ambassador to Canada Lu Shaye's Informal Discussion with Canadian Journalists

On October 19, 2017, Ambassador Lu Shaye had an informal discussion at his official residence with the heads and journalists of Canadian media outlets including The Globe and Mail, CTV, Canadian Press, The Hill Times, Reuters Ottawa Bureau and Ottawa Life Magazine. Ambassador Lu comprehensively interpreted the main contents of the report to the 19th National Congress of the Communist Party of China (CPC) and answered questions from the journalists on China's foreign investment, China-Canada economic and trade cooperation, "Xue Long" arctic expedition and others. The transcript is as follows:

Lu Shaye: China is a country led by the CPC. At present, China's development has entered into a critical period, and the international community, especially the western countries, pays close attention to the 19th CPC National Congress. People are interested in how the CPC plans China's development for the next years.

All our staff watched the opening ceremony of the 19th CPC National Congress on TV and noticed that there were many new expressions and new concepts in the report to the 19th CPC National Congress. For example, the report said that China has now entered a new era of socialism with Chinese characteristics, which means that after over three-decade reform and opening-up, China has entered a new historical period and undergone fundamental changes. This new era has some new features, among which the most important is the change in the principal contradiction facing the Chinese society. In 1980s, the principal contradiction in Chinese society was, as we expressed, the one between the ever-growing material and cultural needs of the people and the backwardness of social production, as China was indeed in a poor condition and the development of production capacity was lagging behind in those days. However, after over three-decade development, China has become the second largest economy in the world, and the volume of China's economy is 2.5 times that of Japan, the third largest economy. China's economy has come to the forefront of the world in many fields. Therefore, we cannot continue to say that China still lies in the stage of backward production capacity. On the other hand, people have much more expectations for life than before, not only in material and cultural needs, but also in democracy, rule of law, fairness and justice, security and a better environment. The CPC has keenly noticed this phenomenon, and the principal contradiction was expressed in the report to the 19th CPC National Congress as the one between the people's ever-growing needs for a better life and unbalanced and inadequate development. People have higher expectations for life, but at the same time, although the production capacity of our country is relatively developed, the economy development is unbalanced in the whole country and the development quality is not high enough.

These are important judgments of the CPC on the current situation of China's social development. The CPC's formulation of national development strategies and policies must be based on the accurate judgment of the situation. The Chinese people often say that we should seize the principal contradiction, which is the one we just talked about. On the basis of focusing on the principal contradiction, the 19th CPC National Congress has put forward a solution, namely the Thought on Socialism with Chinese Characteristics for a New Era. This Thought is a summary of the CPC on the successful experience of the past five years, including strengthening Party self-building and Party leadership, adhering to the people-centered philosophy of development, sticking to the vision of innovative, coordinated, green, open and shared development, and comprehensively advancing the rule of law. All of them have been effective in the past five years and are what we need to uphold in the future. The Thought will be the fundamental policy for the governance of China in quite a long time in future.

On this basis, the 19th CPC National Congress has drawn a blueprint for China's development in next three decades. In the light of the previous plan, we would achieve the first of the "two centenary goals" in 2020, namely the goal of building a moderately prosperous society in all respects. After that, in the next 30 years from 2020 to the middle of the 21st century, we are to achieve the second goal, namely building China into a great modern socialist country. This period of three decades is quite long, and the 19th CPC National Congress has made a two-stage development plan for the three decades, which is divided into the first 15 years and the second 15 years. In the first 15 years, China will basically realize modernization; and in the second 15 years, China will completely realize modernization and walk in the forefront of the world like other developed countries.

The CPC is featured by doing things with rules, plans, strategies and measures and will do things step-by-step. For example, in order to achieve the goals of the two steps, strategies and measures to be taken are listed from nine aspects. To describe in a western way, the report to the 19th CPC National Congress is a ruling programme, and the Chinese people looked forward to it. Based on previous experience, the goals set by the CPC are bound to be realized, and therefore the Chinese people are full of confidence in it. This is the great significance of the 19th CPC National Congress. Of course, western journalists including Canadian journalists also pay very close attention to what a leading organ, or so-called personnel arrangement, will come into being from this Congress. This is also very important for sure, because every single cause has to be completed by people. The Chinese people hold that the leading officials are the decisive factor once the political route is determined. Therefore, the CPC will build a high-quality administration team to achieve the established strategic goals at this Congress.

The Global and Mail: In recent months, we found that some Chinese companies have withdrawn their investments in the Western countries, such as some large amounts of capital withdrawn from football clubs and the mining industry. Is that still the case currently and what is the purpose of that?

Lu Shaye: The Chinese government has indeed strengthened its control on overseas investments this year because we found that a lot of outflow of capital is actually involved in other things under the camouflage of foreign investments, such as the illegal transfer of capital, and even money laundering as well as other criminal activities. In addition, some foreign investments are in fact fake investments, which do not have that high amount, but declare a false amount. Some investments go far beyond China's actual conditions and cannot bring any benefit to China's economic development, to people's livelihood, as well as to their own businesses, such as the acquisition of football clubs. These investments will in turn disrupt China's financial order, resulting in fluctuations of the exchange rate and the turmoil in stock market, which are detrimental to the investors in a broader scale and would cause losses to the majority of stock holders. Therefore, the Chinese government has taken some measures to manage the capital outflow, and has achieved a satisfying outcome out of the responsibility for its people, and for the sake of a stable and healthy development of China's economy. Similar regulating and controlling measures are also available in other countries across the world. But it should also be noticed that China's investments in Canada are still growing. Yesterday, I just read a report of The Global and Mail, reporting that Tencent has spent 40 million US dollars for the acquisition of a Canadian network company. As for this kind of investments in the normal real economy, the Chinese government will encourage them instead of banning them, in that they can bring benefit to both sides. The Canadian network company is a small company with merely 60 million users initially. Yet it will accomplish a great development after Tencent's acquisition and the number of the users is expected to exceed 100 million. To be honest, many people in Canada still harbor fear and doubts about China's investments. Otherwise, the amount of both sides' investments would be greater. When I first came to Canada, the Trudeau government approved a Chinese company to purchase a high-tech enterprise in Quebec. However, the Harper government had once rejected the acquisition in the past. In fact, it was a French-funded enterprise, and suffering from a serious loss back then. So it continued to cut staff, leaving only less than 130 job posts. After the acquisition by a Chinese enterprise, the company is currently offering 270 job posts, and is said to reach more than 300 at the end of this year. Another Chinese enterprise also acquired a Canadian enterprise specialized in auto parts. Back then the enterprise had a great deficit. While after being acquired for two or three years, it became profitable and its profits increased by 10 times. These are some good stories of China-Canada cooperation.

Ottawa Life Magazine: You just pointed out that some Canadians still harbor fear and doubts about China's investment, so what is the reason for that?

Lu Shaye: I have been pondering this question that why some Canadians do not welcome Chinese investment. I think the reason may be that they do not know much about China. China, in their eyes, is a country different from Canada. So they are worried that Chinese companies' acquisition of Canadian enterprises is out of ulterior and murky motives. They think China is a country different from Canada because China is a Communist-led country, so it is not a so-called "democratic country". In fact, in the current phase of globalization, all countries across the world are exchanging cooperation on the same platform. China is implementing a market economy, which is same as other countries and by no means different from those African countries, where market economy is also implemented. Canadians do not have any precautions against them, yet they are doing so against China. Or do they feel that the Chinese economic volume is so huge that it is considered as a threat? We all know that the United States can be even greater in its economic volume. But Canada has been accustomed to the United States, simply because you two countries have been getting along for over 100 years. Therefore, with the deepening of exchanges between China and Canada, both sides will gain a better understanding and become more accustomed to one another, thus reducing suspicion and increasing mutual trust. I have been to Canada for 8 months and the most profound feeling I have is that we should strengthen our mutual understanding and mutual trust. Separated by the Pacific Ocean, China and Canada have got no problems and contradictions at all. In fact all the problems and contradictions are created by some people. Taking some human rights cases for example, are they the problems between China and Canada? In fact, what happened in China can be solved by the Chinese government and with Chinese laws. Even if you, the Canadian side, have different opinions, you cannot take China's issue as yours and interfere China. Recently I have read a book about the history of China-Canada relations. In the 1990s, Canadian Prime Minister Jean Chr├ętien had pursued a friendly policy toward China. However, some Canadians had accused him: Why not emphasize and impose Canadian values and ideology on China? He replied, "I cannot even command the governors of Quebec and Saskatchewan, so how am I supposed to give orders to China?" The same is true of the example I mentioned above.

Ottawa Life Magazine: Here is the last question: China's Xue Long is the most advanced icebreaker in the world and the Canadians have got the news from the media that Xue Long has passed through the Northwest Passage, while China is not an Arctic country. So they may think, why did China send icebreaker to our waters?

Lu Shaye: The Arctic is an international common area. With regard to the development and utilization of the Arctic, in addition to that of the neighboring countries of the Arctic, other countries in the international community also have some certain needs. So the key is whether the development and utilization is conducive to the sustainable development of mankind and to the sustainable development and protection of the environment. In this case, China is in strict compliance with international law. Taking the sailing along Canada's Northwest Passage last time as an example, we have informed the Canadian side in advance, and in fact, the two sides have been in a joint voyage to carry out the scientific expedition cooperation. I also noticed that there were some remarks in the media to question this voyage and I think they have been too sensitive. With the global warming, the development of the Arctic passage is inevitable. And this will be a great benefit to the global trade and the development of neighboring countries of the Arctic. For example, many harbors in the north of Canada are now deserted, with little unloading cargos there. But if the Arctic passage is available, those places will have more visitors and the voyage distance from China to the Atlantic coast of Canada is about to be shorten by one third, which will greatly promote China-Canada trade, for the cost of Canadian exported products to China will be greatly reduced. To be frank, the cooperation between China and Canada in economy and trade takes no advantages geographically, because we are far away from each other. Therefore, we should treat this issue in an objective manner and with a peaceful mind.

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