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Remarks by Ambassador Lu Shaye at the Canadian National Exhibition Belt and Road Forum
2018/08/31

Ms. Virginia Ludy, CEO of Canadian National Exhibition Association,

Ms. Jan De Silva, President and CEO of Toronto Region Board of Trade,

Your Excellency Mr. John McCallum, Canadian Ambassador to China,

Mr. Jean Charest, Former Quebec Premier,

Ladies and gentlemen, dear friends,

Good afternoon!

First of all, I would like to extend my sincere gratitude to the Canadian National Exhibition Association and its partners for their great efforts to hold the forum. Today, seeing such a large number of representatives from the Chinese and Canadian governments and also the business community, and learning so many insights about the Belt and Road cooperation between China and Canada, I am deeply inspired and also aware of my responsibility as China's Ambassador to Canada in this regard. Therefore, I am willing to take this opportunity to share with you my views on the Belt and Road Initiative and on how Canadian enterprises can participate in relevant cooperation.

With respect to the BRI, I would like to elaborate on four aspects.

First, what is the essence of the Belt and Road Initiative?

According to Chinese traditional medicine, pain is caused by the block of blood circulation, and is relieved with its improvement. The BRI was established to break through the bottleneck of the world economic development and let the "blood" of the world economy flow smoothly. The major goals of the BRI are to promote policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds. Policy coordination means that countries along the Belt and Road may fully coordinate and align their economic development strategies and policies, work out plans and measures for regional cooperation, negotiate to solve cooperation-related issues, and jointly provide policy support for the implementation of practical cooperation and large-scale projects. Facilities connectivity means that on the basis of respecting each other's sovereignty and security concerns, countries along the Belt and Road should improve the connectivity of their infrastructure construction plans and technical standard systems, jointly push forward the construction of international trunk passageways, and form an infrastructure network connecting all sub-regions in Asia, and which connecting Asia, Europe and Africa step by step. Unimpeded trade means to improve investment and trade facilitation, remove investment and trade barriers for a sound business environment within the region and in all related countries and discuss with countries and regions along the Belt and Road to establish free trade areas so as to unleash the potential for expanded cooperation. Financial integration means to deepen financial cooperation, and make more efforts in building a currency stability system, investment and financing system and credit information system in Asia. Relevant countries should give full play to the role of the Silk Road Fund and their sovereign wealth funds, and encourage commercial equity investment funds and private funds to participate in the construction of key projects of the Initiative. People-to-people bonds means to carry forward the spirit of friendly cooperation of the Silk Road by promoting extensive cultural and academic exchanges, personnel exchange and cooperation, media cooperation, and youth and women exchanges, so as to win public support for deepening bilateral and multilateral cooperation. China Railway Express to Europe is a model project of the five goals. So far, over 10,000 China Railway Express trains have travelled among 48 cities in China and 43 cities in 15 European countries, and transported nearly 800,000 TEUs (Twenty-foot Equivalent Unit) of goods. They are now running on a regular basis, delivering goods to thousands of homes in China and Europe, enhancing China-Europe economic and trade exchanges, and strengthening people-to-people bonds between the two sides,thus becoming a business card for the BRI.

Second, what has the Belt and Road Initiative achieved in the past five years?

The BRI is not wishy-washy rhetoric. It is concrete work that could be seen and felt to bring real benefits to countries in the region, thus has received increasing echo and support from the international community.

The cooperation in trade and investment between China and the countries along the Belt and Road has continued to expand. A favorable situation of mutual benefit and win-win results comes into being. In the first half of this year, the total volume of import and export between China and Belt and Road countries increased by 18.8 percent to reach 605 billion USD. China's non-financial direct investment in these countries reached 7.4 billion USD, up by 12 percent. China has built more than 80 economic and trade cooperation zones with 43 countries along the Belt and Road, inviting nearly 3,500 enterprises, contributing 2.2 billion USD of taxes to host countries, and creating 244,000 local jobs.

A great deal of model projects took root and bore fruits. The Port of Piraeus, under the joint operation of Chinese and Greek enterprises, has seen its container throughput traffic grow by six times and its global ranking surge from 93rd to 36th, making it the fastest growing container port worldwide. Tajikistan is a large cotton producer. Whereas the country could only process 10 percent of its output. Thanks to a textile joint venture it set up in cooperation with China, which is the largest enterprise of its kind in central Asia, Tajikistan now can process 40 percent of its cotton output. Over 90% of the cotton yarn produced by this enterprise are sold to foreign markets and the enterprise becomes the country's biggest source of foreign currency earnings. The list of such examples could go on and on.

China has signed Belt and Road cooperation documents with more than 100 countries and international organizations. The BRI and its core concepts have been incorporated into documents of major international organizations such as the United Nations, the G20, APEC and the SCO. The Asian Infrastructure Investment Bank (AIIB) has accepted 86 members, outnumbers the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), and has become the world's second largest multilateral development institution in just two years, second only to the World Bank.

Third, how did the Belt and Road Initiative achieve such fruitful results?

I believe that the key lies in its adherence to the principle of extensive consultation, joint contribution and shared benefits, which meets the actual needs of development of countries along the Belt and Road, and corresponds with the historical trend of peace and development. Extensive consultation requires that we pool collective wisdom and carry out relevant initiatives through negotiations, so that the interests and concerns of all sides are taken into full account, and the wisdom and ideas of all sides are given full scope to. In the the Belt and Road cooperation, we have never pursued "China first". From drawing blueprints to project implementation, we stay committed to equality, openness and transparency, in order to discuss and share development opportunities with all participants. Joint contribution means that all sides apply their expertise and give full play to their strength and potential. As the saying goes, "the sand accumulates to form a pagoda; little drops of water makes the mighty ocean", all sides contribute their share in pushing forward the BRI. The construction itself is open and inclusive. It will not be imposed on others, or exclude or target against any country, nor will it lead to hegemony or a zero-sum game. Shared benefits means to benefit all peoples along the Belt and Road in a more equal and fairer manner, and build a community of shared interests and destiny. The BRI is proposed by China, but its opportunities and achievements can be shared by the whole world. It is aimed at achieving true common prosperity instead of the mere satisfaction of self-interests.

Fourth, how do we view various sorts of preposterous arguments in the world?

Since it was launched, the BRI has always been accompanied by various incredible fallacies. Even now when it has gained large approval and tangible outcomes, it still bears unfair accusations and malicious slanders.

Some people say that China utilizes the BRI to seek geo-strategic interests and some even call it China's Marshall Plan (It hints that Marshal Plan was not selfless). I would like to stress that the BRI is not a tool for China to contend for regional or international ascendancy; instead, it is a public goods that can be used by all countries. In the promotion of the BRI, China has no geopolitical calculations, seeks no exclusionary blocs and is not strong-arming anybody to do deals on our term. China, unlike some western countries, will not make use of economic leverage in its external cooperation or attach additional political conditions to interfere in other countries' internal affairs and seek geo-strategic interests.

There are some other people saying that the BRI breaches international rules and lacks transparency. In fact, the BRI is implemented utterly aboveboard. It sticks to the rules-oriented approach, following the internationally-accepted practices. It adheres to the principles of openness and transparency, complying with business rules for negotiation. It upholds the enterprise-centered market operations, as well as market laws. Those who blame the Belt and Road construction have never been able to provide a shred of evidence to prove that it runs counter to international rules.

Recently, some people preach the "debt-trap", stating that China makes use of the Belt and Road construction to lend huge money to other countries and then take control of the resources, infrastructures and even the sovereignty of the countries that "fail to repay their debts". This allegation is essentially a conjecture of certain countries who, based on their own experiences of colonialism and imperialism, surmise that China will also capitalize like them on foreign debts issues for political and strategic motives. As a matter of fact, the majority of participants in the BRI are developing countries whose economy is underdeveloped, with great demands and gaps in infrastructure. The the Belt and Road construction has provided these countries with new opportunities and possibilities to strengthen weaknesses, overcome bottleneck, improve people's livelihood and achieve economic growth. This is an important reason why the BRI is welcomed by many of the developing countries. An example of this is the China-assisted Mombasa–Nairobi Standard Gauge Railway in Kenya. The railway, with a total length of 480 km, was completed in only two and a half years. It has reduced 79% of logistic costs and 40% of commercial costs for countries in East Africa, Kenya included, driving Kenya's GDP up by 1.5% to 2% per year. In fact, what many developing countries face is not the so-called "debt trap", but the "poverty trap" caused by historical and external factors. Those countries that put blames on China not only have neither intention nor capability to help developing countries to boost their economy, but also spread lies to hamper the common development of China and these countries. As a result, these developing countries would be caught in the "poverty trap" forever. The truth is that, among China's partners, no one is beset with a debt crisis because of the cooperation with China.

Apart from the fallacies mentioned above, there are some other accusations, such as "environmental damage", "economic predation", "neo-colonialism", and so on. China sincerely welcomes constructive suggestions from all stakeholders for a better cooperation under the BRI. On the contrary, these fallacies ignore the truth. Under the guise of in-depth reporting and professional analysis, they trump up seemingly reasonable doctrine through the tricks of changing, replacing and substituting concepts and making misinterpretation to confuse and deceive the public. These fallacies bear no scrutiny at all.

Then, I would like to talk about the opportunities for Canadian enterprises under the Belt and Road Initiative framework. I think there is no better time for Canadian enterprises to participate in the construction of the BRI than now, and they should not let the opportunities slip away. Currently, Canada's southern ally is arbitrarily pursuing protectionism and wielding the stick of trade war, which has not only greatly shook the rules-based international economic order, but also escalated the trade frictions between Canada and the U.S. As a result, Canada has become one of the major victims. That triggered Canada's introspection on trade policies. I have noticed that some Canadian experts and scholars have warned not to fight back the U.S.' trade protectionism in a tough way. Instead, Canada should compromise with the U.S. in exchange for its mercy. Such suggestion is just a temporary expedient rather than a fundamental solution. Indeed, U.S. is Canada's largest trade partner. It is reasonable for Canada to actively promote its economic and trade cooperation with the U.S. However, given the general situation where the global economic center is gradually shifting towards the Asia-Pacific, and in consideration of maintaining Canada's economic and social development as well as  long-term interests, Canada can still value the U.S. market, yet it also has to turn to the emerging markets and diversify its trade. In this regard, it is really wise for Canadian government to make the decision to promote trade diversification in the recent cabinet reshuffle. However, it's always easier said than done. The diversification policy requires a tough implementation. Fortunately, the BRI happens to provide a golden chance for Canada to diversify its trade and to expand its foreign investment. Why do I put it in this way?

Firstly, featuring openness and inclusiveness, the BRI is open to Canada. The Initiative is not China's solo performance, but a symphony played by all. All countries and regions are welcomed to participate in it. As a Chinese proverb goes, "nothing, not even mountains and seas, can separate people with the shared goals and visions." Although located in North America, where is quite far away from China, Canada is welcomed to take part in the Initiative. As a matter of fact, more and more developed countries have started to get into the BRI construction. British government says it is a natural partner of the BRI and has appointed a special envoy to it. Recently, French Senate Foreign Affairs, Defense and Armed Forces Committee issued an assessment report on the BRI, suggesting that France should take part in it in a more active way.

Secondly, the Belt and Road construction has created vast market. It includes 65 countries with a total population of 4.6 billion, accounting for 60% of the world's population. Their total GDP is about 23 trillion USD, accounting for about 30% of the world economic aggregate. And China alone has a large market with nearly 1.4 billion people. This year witnesses the 40th anniversary of China's reform and opening-up policy. China will continue to pursue development with its doors wide open. Recently, China has adopted some measures to further opening-up, such as widening market access, protecting intellectual property rights, improving investment environment, and expanding imports. China will hold the first China International Import Expo in Shanghai this November, which will provide more opportunities for our two countries to cooperate in agriculture, forestry, energy, aerospace, clean technologies, financial services, tourism, education etc. Meanwhile, countries along the Belt and Road also provide unlimited business opportunities. I met the Chargé d'Affaires of Belarus to Canada on a diplomatic occasion not long ago. He excitedly introduced to me the fruits achieved by Belarus in the Belt and Road construction, saying that China and Belarus have jointly constructed an industrial park in Minsk. The convenient location and its favorable policy have attracted enterprises and investment from China, Belarus and other countries. He told me that his priority here is to introduce the industrial park to Canadian government and enterprises and encourage more investment. I think this is a good example.

Thirdly, regarding Canada's facilities and advantages, China and Canada can jointly explore third-party markets. The cooperation in third-party markets is meant to align China's productivity, technologies of developed countries with the development demand of developing countries. This cooperation approach has received positive responses from international community and become an important model of joint construction under the BRI. China has reached agreements on the cooperation in third-party markets with more than 10 developed countries, including France, Korea, Germany, UK, Singapore, Belgium and Portugal, focusing on areas where we can complement each other's advantages, such as infrastructure, energy, environmental protection, and financial services. During Premier Li Keqiang's visit to Canada in 2016, our two countries signed a Joint Statement between the Government of Canada and the Government of China to Develop Cooperation in Third-Party Markets to encourage and support enterprises of both sides to pursue economic development opportunities in third-party markets. Chinese and Canadian nuclear energy enterprises have successfully cooperated in third-party markets, including in Romania, Argentina. Their cooperation achieved very sound effects. As a member of AIIB, Canada has also established Canada Infrastructure Bank. As a veteran international market, Canada are experienced in transportation, communication, clean energy, financial services, talent training, etc. Canada has great potential and advantages in cooperation in third-party markets under the BRI.

In short, we warmly welcome and look forward to Canada's participation in the BRI in a more active way . The Belt and Road Initiative will fuel the economic and trade cooperation between China and Canada as well as the international cooperation, thus deepening and strengthening China-Canada strategic partnership.

Thank you!

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