Address by Tang Jiaxuan

Tang Jiaxuan _*

at the Luncheon Given by
The National Committee on U.S.-China Relations
and the Asia Society
September 25, 1998

Speeches and Transcripts: 1998

Mr. Chairman,
Ladies and Gentlemen,

First of all, I wish to thank the National Committee on U.S.-China Relations and the Asia Society for the kind invitation. This is the first time for me to come to the United States since I became China's Foreign Minister. I am very delighted to be with you, my friends, and I would like to take this opportunity to thank you for the unremitting efforts you have been making for years for the improvement and growth of China-U.S. relations. I also wish to take the opportunity to give you an overview of the developments in China and make a few observations on China–U.S. relations.

The year 1998 was an unusual year for China. In the year, the Chinese people have withstood two major tests: the Asian financial crisis and the unprecedentedly mammoth flood.

Last March, in light of the actual conditions, the Chinese government set forth this year's objectives of ensuring an 8% growth of China's national economy, deepening the reform of state–owned enterprises and the financial system, and maintaining the value of RMB. We decided to increase investment in infrastructure and expand domestic demand, that is, to accelerate the development of railways, highways, communications; environmental facilities, urban and rural power grids, among others. We would base our efforts on opening up the big market of 1.2 billion people, especially the rural market. We have persisted in the opening–up policy and maintained a good momentum of growth in the inflow of foreign investment and export. According to the statistics, in the first half of this year, the contractual foreign investment in China totalled over 20 billion US dollars, which is roughly at the same level as the corresponding period of last year. China's foreign trade grew by 5.2% with export up by 7.6%. China's GDP maintained a growth rate of 7%. Prices went down somewhat. Foreign exchange reserves continued to rise. Now the Asian financial crisis has not yet eased off and some Asian countries have even experienced a negative growth. In this context, it is not easy for China to have scored such an achievement.

Not long ago, the Central Government announced to issues another 100 billion RMB yuan treasury bond, earmarked especially for building up infrastructure. It is estimated that this measure, plus the supporting loan investment by banks, may pull a GDP growth of over 2%. The construction of infrastructure will not only help realise the 8% growth target for this year, but benefit the long–term and stable growth of China's economy in the future.

This year, central and northeastern China was hit by massive flooding. The size of the areas affected, the duration of the flooding and the damages it inflicted are all rare in China's history. It has caused a huge loss of more than 20 billion US dollars. The Chinese Government has, from the very beginning, given top priority to the protection of people's life. The entire nation was mobilised and millions of soldiers and civilians threw themselves in to the flood–fighting endeavour. Thanks to the effective leadership and appropriate measures, the main dykes were secured, major cities along the rivers were kept intact and the loss of life and property was kept to the minimum. We have won a decisive victory in this battle against flood. Here, we would like to express our gratitude to the governments and people of other countries, the U.S. Government and people included, for the sympathy and assistance they have extended to the Chinese people. Now the Chinese Government is going al out for the rehabilitation and reconstruction of the disaster–stricken areas. We will strive to turn the bad thing into good. On the basis of taking stock of the lessons from the flood, we will increase investment in the construction of water–conservancy projects and the improvement of the ecological environment so as to tackle the flooding at its root. Further upholding the spirit of strong cohesion and united struggle, a trait of the Chinese nation that was demonstrated during this flood–fighting campaign, we will devote ourselves with greater vigour and zeal to accelerate the post–disaster reconstruction and make it a new growth point in the national economy.

Ladies and Gentlemen,

The Chinese work " weiji" or " crisis" consists of " wei" (risks) and " ji" (opportunities). Fully aware of the risks, the Chinese people have seized the opportunity. They have strived hard in unity in overcoming difficulties of all kinds and achieved economic development, social stability and national unity. We have the confidence in attaining all the objectives set forth for reform and development in the beginning of this year. I believe that a steady and sustained growth of China's economy will give a strong boost to the economic development in Asia and the world at large.

Ladies and Gentlemen,

The end of the Cold War has ushered the world into a transition from the old configuration to a new one, with a growing trend toward multi polarity both globally and regionally, politically and economically. To keep peace and seek economic development have been universally taken as a major policy orientation. And to seek cooperation and avoid confrontation have become the major policy orientation. And to see cooperation and avoid confrontation have become the mainstream in international relations. The emergence of economic globalisation and knowledge economy has profoundly affected the economy of all countries and made a strong impact on the traditional international relations. Human progress and social development have been afforded unprecedented opportunities.

However, the challenges facing the human society are also unprecedented. The gap of wealth between the South and the North is widening. Destablilising factors such as ethnic feuds, religious conflicts and territorial disputes are still there. Trans–boundary issues such as environmental pollution, internal crimes, terrorist activities and drug trafficking have grown increasingly acute and become new destablising factors. The expanding impact of the Asian financial crisis has put the stability and development of world economy to a severe test. The nuclear arms race in South Asia has caused new tension in the region. Such issues, if not addressed promptly and appropriately, will cast a shadow over the future of mankind in the next century. The human society will usher in a new millennium in two years' time. This is has become an urgent task of the international community to find out ways to meet the challenges effectively and bring a world of stability, development and prosperity into the 21st century.

China has unswervingly pursued the independent foreign policy of peace. We call for the respect for diversity of the world and stand ready to live in amity with all countries, treat each other as equals and expand mutually beneficial cooperation on the basis of the Five Principles of Peaceful Coexistence. Not long ago, the Chinese Government issued a white paper on China's national defence in which it elaborates its defensive national defence policy and its firm determination to safeguard world and regional peace and stability. China has made unremitting efforts to forestall the crisis of a nuclear arms race in South Asia and to ease tension on the Korean Peninsula.

The recent financial turmoil has spread form South east Asia to Russia, form developing countries to developed countries such as Japan. It may spread further to affect the growth prospects of Europe, America and even the entire world. In today's world of accelerated economic globalisation and ever–closer economic ties between countries, it is imperative for all countries, big powers in particular, to take measures to safeguard their own national economic security and shoulder the responsibility for promoting stable regional and global development. This is a major issue they cannot evade. In this connection, the Chinese Government has adopted a highly responsible attitude. We have not only rendered assistance to some countries as far as we can under the framework of the IMF and through bilateral channel, but also pledged not to devalue our RMB, thus making contributions at a high price to ease the Asian financial crisis. We are ready to step up economic strategic dialogue and consultation with the U.S. side in a joint effort for an early recovery of the Asian economy. Facts have proven and will continue to prove that China is a country with a strong sense of responsibility. China is a staunch force for world peace and regional stability, and its development will not pose a treat to any country. A developed China will make greater contribution to world peace and prosperity.

Ladies and Gentlemen,

The Chinese government has all along attached importance to the development of China–U.S. relations. Thanks to the joint efforts of both sides, China–U.S. relations have improved and advanced steadily in recent years. In particular, heads of state of our two countries have successfully exchanged visits since last fall. These are historic events in the annals of China–U.S. relations, which have greatly enhanced the mutual understanding and friendship between our two peoples and forcefully pushed our bilateral relations to a new stage of development. Our cooperation and people–to–people interchanges have continued to grow and expand in the political, economic, environmental, energy, legal, military, cultural, educational, scientific and technological, public health and other areas. Our two sides have also enhanced consultation and cooperation on international and regional issues. After attending the U.N. General Assembly, I will pay an official visit to the United States at the invitation of the Secretary of State Ms. Albright. The visit is aimed at implementing further the consensus and agreement reached by heads of state of our two countries during their state visits so as to maintain and further promote the good momentum of growth of our bilateral relations.

The two sides are determined " to build toward a constructive strategic partnership between China and the United States through increasing cooperation to meet international challenges and promote peace and development in the world" , which is a right choice in conformity with the trend of the times and with the fundamental interests and common aspirations of the peoples of China and the United States. It is of important significance as well as profound and far–reaching impact to define a framework and direction for the 21st century–oriented China–U.S. relations. It testifies to the commitment by China and the United States to the establishment of a new–type big power relationship under the new historical circumstances in which China and the United States will be partners, rather than adversaries. The friendly relations and cooperation between China and the United States are not an expediency, but a strategic choice oriented towards the 21st century. The constructive strategic partnership that China and the United States are to build is different from the alliance in the Cold War era. This partnership is not exclusive, nor is it directed against any third country. Rather, it is for the promotion of world peace, stability and prosperity. Therefore, it is in the common interest of all mankind and is well received among all countries in the world.

There is a foundation for China and the United States to build a constructive strategic partnership between them. The ever–expanding interests shared by the two countries and huge potential for their cooperation serve as the basic driving force for the realisation of this objective. China and the United States are the largest developing and the largest developed countries respectively, and both are permanent members of the U.N. Security Council. Both should common responsibilities in maintaining regional and world peace and security. There is also huge potential for cooperation between them in developing mutually–beneficial economic cooperation and trade and promoting stable economic development in the Asia–Pacific region. Both endowed with great environmental and energy resources, the two countries could complement each other in this regard. Strengthened cooperation between the two sides not only serves their common interests but also conduces to the global environment protection. On the prevention of the proliferation of weapons of mass destruction, China and the United States have common goals. They have already enhanced their cooperation in these areas and will continue to do so. The two sides will further step up their cooperation in cracking down on international crimes, drug–trafficking, alien–smuggling, terrorism and other cross–border issues. The recent economic turmoil in the Asia–Pacific region and the grave situation in South Asia have further highlighted the necessity and urgency of closer cooperation between China and the United States.

To materialise the constructive strategic partnership between China and the United States, however, calls for unremitting efforts from both sides. In our view, it is important to do the following:

First, always view and handle China–U.S. relations from a strategic and long–term perspective, bear in mind the overall interests of China–U.S. relations, and proceed from the fundamental interests of the two countries and the two peoples so as to over come disturbances and ensure an ever–growing momentum in advancing China–U.S. relations.

Second, adhere in real earnest to the three joint communiqués between China and the United States and the Joint China–U.S. Statement and properly handle the Taiwan question so as to avoid major twists and turns in China–U.S. relations.

Third, enhance mutual understanding and trusts and renounce vestiges of the Cold War mentality so as to conform with the trend of the times and the common aspirations of the two peoples. The world is a colourful and diverse place. Given their differences in history, tradition and level of social development, it is natural if China and the United States should have divergent views on some questions. We could narrow our differences through dialogues and exchanges. As for those questions that cannot be resolved for the time being, we should still try to seek common ground while reserving differences based on he principle of mutual respect and equality.

Fourth, seize the favourable opportunities in the current China–U.S. relations, work to expand the common interests of the two countries and the bilateral cooperation, give full play to the potential of the bilateral relations and build the constructive strategic partnership between China and the United States on an even more solid basis.

Ladies and Gentlemen,

The Taiwan issue concerns China's sovereignty, territorial integrity and national reunification and touches on the national feelings of the 1.2 billion Chinese people. It has direct bearing on whether China–U.S. relations will grow healthily and steadily.

It is the common aspiration of the entire Chinese people including our Taiwanese compatriots to solve the Taiwan issue and achieve a complete national reunification. The basic policy of the Chinese Government to solve this issue is " peaceful reunification" and " one country, two systems" . The great concept of " one country, two systems" has been smoothly applied in Hong Kong and will be implemented in Macao next year. It has been proved in practice to be successful and feasible and has thus won high acclaim from the international community. As for Taiwan, we will adopt an even more flexible policy than that towards Hong Kong and Macao. Taiwan, once reunited with the mainland, will enjoy a greater autonomy than Hong Kong and Macao. We stand ready to enter into peaceful negotiations with the Taiwanese authorities to achieve national reunification peacefully. But this should be done without prejudice to the principle of one China. Under the premise of one China, anything can be discussed. At present, we are vigorously pushing for political talks between the two sides across the Taiwan Straits. We have proposed to start discussing procedural arrangements for the political talks, the promotion of personnel and economic exchanges and three direct links (of mail, trade, air and shipping services). In order to enhance mutual understanding and seek common ground, the Association for Relations Across the Taiwan Straits (ARATS) of the mainland is increasing contacts with Straits Exchange Foundation (SEF) in Taiwan. ARATS is ready to engage in political dialogue with SEF as long as it is in the interest of peaceful reunification and the development of cross–Straits relations. All this bears ample testimony to our sincere wish to start the proposed political talks at an earlier date and expand exchanges across the Taiwan Straits. We hope to see early and positive response from the Taiwanese side.

The reunification between Taiwan and the mainland conforms with the trend of the times and the desire of the people. Its early realisation serves not only the fundamental interests of the people across the Straits, but also the interests of all parties including the United States. The reunification will not affect the existing economic, trade and cultural relations between the United States and Taiwan. It will only enable them to develop better and the U.S. economic interests in Taiwan will be better protected. As far as China–U.S. relations are concerned, a nearly resolution of the Taiwan issue will remove a major obstacle in our relations, facilitate a sound and steady growth of our relations and continued peace and stability in the Asia–Pacific. This also serves the U.S. interest as well.

Since 1972, all the U.S. Administrations have reaffirmed their adherence to the one China policy. The three Sino–U.S. joint communiqués and the Joint China–U.S. Statement have set forth unmistakable guiding principles on how to handle the Taiwan issue. Recently, U.S. leaders have reiterated the above–mentioned policy, principles and the relevant U.S. commitments on many occasions. It is our hope that the U.S. side will handle the Taiwan issue in accordance with the principles set forth in the three Sino–U.S. joint communiqués and the Join China–U.S. Statement in real earnest, honour their commitments and truly work for a sustained, sound and stable growth of China–U.S. relations.

Ladies and Gentlemen,

To develop China–U.S. economic relations and trade will not only bring about tremendous tangible benefits to the two peoples, but also contribute significantly to a stable economic growth of the Asia–Pacific region. Give the complex economic situation in Asia, it is all the more imperative for us to step up or economic cooperation, increase trade and enhance dialogue and consultation in the economic and financial fields. We should work together to promote an early recovery of the Asian economy.

Some people in the United States are understandably concerned about their trade deficit with China. But we should look at this issue objectively. The trade deficit is much smaller than what is claimed. The discrepancy in the deficit assessment is due to different statistical compilation and more importantly due to one's perception. Most of the Chinese exports to the U.S. are goods no longer in production in the United States. These exports do not constitute competition to American domestic industries, still less do they harm the U.S. economic growth. On the contrary, such exports materially benefit American consumers and at the same time, help keep a low inflation in the U.S. What's more, a sizable proportion of China's exports to the U.S. are products manufactures by American enterprises in China in the form of processing trade. In these exports, the American enterprises are the main beneficiaries. Even so, the Chinese Government has still paid much attention to the reduction the trade deficit and has made great effort in opening its domestic market. China's commitment to non–devaluation of its RMB is also in favour of U.S. export to China. It is our hope tat the U.S. will resolve at an early date the issue of China's NTR status for good and remove restrictions on the export of hi–tech products to China so as to create good conditions for more U.S. export to China and for continued growth of China–U.S. economic relations and trade.

China has all along adopted an active approach to its membership in the WTO and made strenuous efforts for it for years. It is fair to say that China has already met the basic conditions for the accession. During President Clinton's visit to China, the bilateral negotiations on this matter made progress with their difference somewhat narrowed, which is conducive to an early conclusion of agreement between China and the U.S. Now, the key to this issue is that all the parties concerned should have a full and comprehensive understanding of the actual conditions in China, which is a poorly–founded and populous developing country, and which has made tremendous efforts for its early accession to the WTO and adopted a realistic attitude in the negotiation. They should stop asking China to make unrealistically big concessions for it. China's attitude is positive and China is willing to continue to work with all parties concerned for its early accession to the WTO, which serves the common interests of all parties, including the U.S.

Ladies and Gentlemen,

January 1, 1999 will be the 20th anniversary of the establishment of the China–U.S. diplomatic relations. Over the past 20 years, this relationship has gone through ups and downs and withstood the changes in world pattern. And our relations have become exuberant. Reviewing the history of these years, we are pleased with the progress in China–U.S. relations and even more so by the prospect of building a constructive strategic partnership between our two countries. Li Bai, a famous poet of the Tang dynasty one wrote: " Despite the wind and waves there may be, the boat will forge ahead towards the sea." Let's seize the good opportunities and work together to bring a sound, stable and growing China–U.S. relationship into the new era.

Thank you.

---

Endnotes

* Tang Jiaxuan is the Foreign Minister of The People's Republic of China. Back.