President Robert Toller,

Ladies and Gentlemen:

Let me first of all thank Robert for his kind invitation. It's an honor for me to address such a prestigious audience at the Canadian Club of Ottawa monthly luncheon. And I am pleased to be back among friends, old and new, who have entertained a strong interest in China.

A few weeks ago, a debate was held in Ashbury College here in Ottawa with the motion "China's rise spells the decline of the West." Two polls were done, one before the debate and one after, and guess the result? In both of the polls, a majority of the participants didn't agree with the motion of a win-lose scenario. Well, in the world today, an emerging China is hardly a much contested subject anymore. However, where China is heading for and what it means to the rest of the world are still hot topics for discussion, if not debate. And that is what I am going to share with you today, my observations on China's development and the future of China-Canada relations.

I. On China's Economic Development

As all of you know, China has changed profoundly over the years. With an average annual growth rate of 9.6%, our economy surged 10 fold, 7 fold in per capita terms, within less than three decades. Our farmers grow 480 million tons of grain a year, feeding 22% of world's population with only 7% of mother earth's arable land. Over two hundred millions of Chinese have been lifted out of poverty. That was about 75% of all the people bidding farewell to abject poverty in the same period around the world, which, in my view and to many in the world, is a great contribution to the entire humanity. China's trade hit US$1.42 trillion last year, made the country, already the world's 4th largest economy, the 3rd biggest trading nation.

As one of the generation that has personally experienced this historical transformation in China, I take pride in the progress my country has made. Yet, all the achievements notwithstanding, China is, and will be a developing country for a very long time. China is best known for its huge population of 1.3 billion. An individual problem, no matter how trivial it seems, will turn almost unwieldy if you multiply it by 1.3 billion; while a huge economy, no matter how many trillions in the statistics, shrinks to quite a unimpressive per capita income when we divide it by 1.3 billion. That is why our 4th largest national economy returns a per capita GDP without even a place in the first 100 in the world. Population aside, other daunting challenges also abound, weak economic foundation, uneven growth among regions, and insufficient social services in many areas, just to name a few. It will take arduous efforts of generations to come if we are to offer a comfortable life to all Chinese. It's not easy, not by any means, but we are confident. In China, we are working for "peaceful development" and a "harmonious society". We are convinced that it will bring about balanced and sustainable growth across the board.

II. On the Strategies of Peaceful Development and Building a Harmonious Society

China is at a critical juncture in its way forward, as it shifts from a planned to a market economy accompanied by a host of profound changes in its social and economic structures, on a scale never seen before in human history. Unleashed is not only the potential for growth, but risks as well, to which, "a harmonious" society, is our answer.

A harmonious society, as we define it, is one of democracy and the rule of law; one based on equality and justice; one features honest and caring, vigorous and orderly environment; and one in which man live in harmony with nature. It takes time and effort, not overnight, but over time.

Such a vision calls for concrete measures, sometimes with quite some urgency, in matters most relevant to the life of our people. On the macro level, there is a widening gap between our urban and rural areas, among different regions as well as mounting pressure on population, resources and environment. On the micro level, there are the issues of employment, social safety net, income distribution, education, health and medical care, housing, law and order, and the list just goes on--problems that have to be tackled for a society to be genuinely harmonious.

An important document was adopted in Beijing last month by the Communist Party of China Central Committee to focus on building a harmonious society. It outlines the guiding principles for China's future economic and social development:

1) People first;

2)Scientific development;

3) Reform and opening-up;

4) Democracy and the rule of law;

5) A balance between reform, development and stability, which means to promote harmony by reform, to consolidate harmony by development and to ensure harmony by stability, and;

6) Social solidarity, meaning to mobilize and unite all forces and factors that can be mobilized and united with.

These values and principles, many of which, I believe, echo what our friends in this country often refer to. True, it is based on our own experience and the common achievements of the civilization of mankind that China has made the building of a harmonious society its natural choice for future development. Democracy, freedom, human rights, and social harmony are not unique to certain societies, but shared aspirations of mankind, only not manifested in a uniform way though. We are different in history, in culture, in the level of economic and social development, not to mention the languages. The same idea could be espoused in worldly different ways in Chinese and English, let alone more complex values and their ways of realization. This, I believe, is just another example of our world in diversity, of the Canadian belief in multiculturalism. I believe that the Canadian people, great champions of diversity and pluralism, will agree with me on the point that acknowledging diversity of the world we share and learning from each other with tolerance and respect will prove far more productive for common progress and prosperity than standing aloof and pointing fingers at each other. Through this perspective, I'm sure people will find quite a few fresh dimensions in their approach to China, to the world, and to many of the problems we as an international community face today.

While working for a harmonious society at home, we advocate, in our foreign policy, a harmonious world of lasting peace and common prosperity. It is our belief that a harmonious world is built on the basis of cultural diversity, win-win cooperation, coordinated and sustainable development, and security cooperation based on equality, mutual trust, mutual benefit and coordination. All countries, big or small, are equal, and therefore, should work together in line with the UN Charter in international relations. The best way forward, we believe, is to seek common interests through equal dialogues, and enhance mutual trust through cultural exchanges. Peace, development and cooperation-these are the theme of our effort for a harmonious world. We will follow an independent foreign policy of peace and engage more widely in friendly cooperation with all countries on the basis of the five principles of peaceful coexistence.

Both domestic and international harmony is what we are working for, and the two goals reinforce each other with their own progress. China has chosen its path of future development-one of peace, openness and cooperation.

III. A Few Thoughts on China-Canada Relations

Ladies and Gentlemen,

Exchanges between China and Canada started long ago despite their physical distance. The first group of Chinese came to the west coast of the Vancouver island in 1788. 17,000 Chinese arrived in British Columbia to build the Pacific railroad in the snow-covered Rocky Mountains between 1881 to 1884. During World War II, Chinese in Canada were active in buying Canadian war-time bonds, and many joined the Canadian armed forces to fight shoulder to shoulder with their brothers in Canada and China alike. Over 500 Canadian soldiers sacrificed their lives defending Hong Kong. Dr. Norman Bethune, who went to China to join the Chinese fight against Japanese aggression and saved countless lives, has been a household name in China and a standing symbol of friendship between our two nations. Thirty-six years ago, Canada was among the first nations in the west to establish diplomatic relations with the People's Republic of China.

China remembers. The people in China remember.

Since then, we are pleased to see continuous development in the bilateral relations in a variety of fields. Our bond and friendship grow. We highly appreciate the one China policy pursued by successive Canadian governments. And the upgrading of the bilateral relations to a level of strategic partnership in 2005 during Chinese President Hu Jintao's visit to Canada added new dimensions to the bilateral relationship.

Trade and economic cooperation has been a key component of, and important driving force for the bilateral relations. It started small, decades ago, from simple commodity trade and has evolved into an all-dimensional relationship covering trade in commodity and services, capital flows and personnel exchanges, delivering enormous tangible benefits to the Chinese and Canadians alike. Cultural exchange is flourishing. Large-scale Chinese cultural programs, such as the Beijing Culture Week, Xi'an Culture Season and the China Tibetan Culture Week were held here in the country. And a string of brilliant cultural events were staged across Canada last year, to mark the 35th anniversary of our diplomatic ties.

Education has turned out to be another area with immense prospects in our bilateral relations. Around seven cooperative agreements and MOUs have been signed, and numerous partnerships fostered since 1998 between the higher learning institutions of the two countries. China has become one of the biggest sources of foreign students in Canada. Back in the early 1970s, when I came to Canada as one of the first group of PRC exchange students, there were at best no more than a dozen students from mainland of China studying in Canada, from coast to coast, but now there are 55,000. And a growing number of young Canadian students, about 900 now, have been attracted to China for academic studies. In February 2006, the first Confucius Institute in Canada was opened in B.C., offering courses and programs to Canadians who are interested in learning the Chinese language and culture.

Our partnership has gone far beyond the bilateral framework. In the international arena, our two countries have conducted effective consultation and co-operation on many issues of common concern.

Ladies and Gentlemen,

What happened over the past decades has shown that countries like China and Canada, though different in social systems, ideologies and values, different level of economic growth, as well as cultural and historical backgrounds, can still manage to achieve smooth development in their relations. One important reason is that we two countries have no conflict of fundamental interests, but many converging interests instead. In my view, there are no reasons for these differences to stand in our way of communication. On the contrary, they should be the perfect incentive for stronger communication and better dialogues.

We in China highly value our friendly relations and cooperation with Canada. We look forward to even greater development in our mutually beneficial cooperation through increased two-way investments, more dialogues on trade policies, improved conditions for cooperation, expanded investing sectors, enhanced cooperation in traditional energy sector and service industries.

Both China and Canada are important Pacific-rim countries. An all-round cooperation not only serves the fundamental interests of the two countries and two peoples, but also contributes to the prosperity and stability of the Asia-Pacific and the world at large.

Ladies and Gentlemen,

In conclusion, I wish to salute the people of Canada. Canadians, with your toughness, pragmatism and innovation, have brought prosperity to this beautiful country. It is my hope that more and more Canadians will turn their eyes to China. The Chinese Government and people are always ready to work together with their Canadian friends to create a better future for the two countries and the Asia-Pacific region, and to work for a harmonious world with lasting peace and common prosperity.

Thank you.