Ladies and Gentlemen,
Dear Friends,

I am very glad to speak to you here today under three hats. The first is an official hat, Vice Chairman of the Standing Committee of China’s National People’s Congress; the second is an unofficial one, President of the China-Latin America Friendship Association; and the third an academic one, a scholar on economics. I look forward to discussing with you prospects for China-Latin America and the Caribbean relations and measures for greater cooperation between our two sides.

Sound Foundation for Political Cooperation

The Chinese Government has always attached importance to its relations with Latin America and the Caribbean countries, as evidenced by frequent personnel exchanges between our two sides. China’s state leaders have visited Latin America and the Caribbean on many occasions, a good example of which is Chinese President Hu Jintao’s visit to Argentina, Brazil, Chile and Cuba in November 2004. In January 2005, Chinese Vice President Zeng Qinghong visited Mexico, Peru, Venezuela, Trinidad and Tobago and Jamaica. In recent years, many heads of state/government from Latin America and the Caribbean have also come to China for visits. I myself have participated in the events held by former President Jiang Zemin and President Hu Jintao for visiting presidents from Latin America and the Caribbean countries, including Mexico, Brazil, Chile, Venezuela, Ecuador, Uruguay and Colombia. China’s NPC has maintained close contacts with many Latin America and the Caribbean parliaments. China is now an observer to the OAS and PARLATIMO and has ties with the Group of Rio, the Andean Community, CARICOM and Mercosur.

The foundation for political cooperation between China and Latin America and the Caribbean has three elements. First, both belong to the developing world and have identical or similar views on many issues. Second, both have a history of striving for national independence. I have seen in many Latin America and the Caribbean countries monuments to their heroes fallen in the fight for independence. Third, both China and Latin America and the Caribbean countries share the aspiration for maintaining world peace and promoting common development. Given the aforementioned three elements, China and Latin America and the Caribbean can further develop political cooperation on many issues. At present, China has diplomatic relations with 95% of Latin America in terms of land area, population and economic strength. China has established strategic partnerships with Brazil, Mexico, Argentina, established strategic partnership for common development with Venezuela, and actively develop all-round cooperation with other countries. China pursues a relationship of mutual political support and mutual trust with Latin America and the Caribbean countries, by which the two sides can further strengthen communications, coordination and cooperation on major issues bearing on world peace and development, democratization of international relations, and protection of the legitimate rights and interests of developing countries.

China is the largest developing country and a permanent member of the UN Security Council. Its peaceful development in recent years has attracted worldwide attention and its role keeps rising in world politics and economy. I hope that leaders from those few Latin America and Caribbean countries yet to establish diplomatic relations with China can see clearly the general trend of the world and develop cooperation with China on the basis of the universally recognized “one China” principle.

Big Potential for Economic Cooperation

After more than 20 years of economic reform and development, China has gradually raised its overall national strength and improved the livelihood of its people, which is a success recognized by all. Since the reform and opening up policy was inaugurated in 1978, over a long span of 20-plus years, China’s economy has been growing at an annual rate of over 9%. In 2004, China’s GDP reached US$ 1.65 trillion, the world’s Number Six; its foreign trade volume, including imports and exports, totaled US$ 1.15 trillion, the world’s Number Three; it attracted US$ 60.6 billion in FDI, the world’s Number One; and its foreign exchange reserve registered US$ 609.9 billion, the world’s Number Two. On the one hand, China’s great aggregate economic strength makes it possible to carry out manned space flight, a task hard to accomplish even too many developed countries. On the other hand, China must work still harder and develop faster since its per capita GDP is only US$ 1,290, lower than that of many Latin America and the Caribbean countries, given China’s 1.3 billion people.

Latin America and the Caribbean presents tremendous potential for development as it has vast territory, large population, fertile land and abundant resources. Despite past economic setbacks, many Latin America and Caribbean countries have experienced recovery in the past two years. In 2004, the Latin America and Caribbean economy increased by 5.5%, the fastest growth over the last 20-plus years. According to a research report issued by the UN Economic Commission for Latin America and the Caribbean on August 3 this year, the economy of Latin America and the Caribbean is expected to grow by around 4.3% and 4% respectively this year and the next year. Of course, Latin America and the Caribbean countries also have problems such as fragile economic base, irrational economic structure, over-dependence on foreign trade, heavy external debt burden and big poor population, all of which need to be dealt with seriously.

In recent years, the trade volume between China and Latin America and the Caribbean countries has been growing at an annual rate of 38%, reaching US$ 40 billion by the end of 2004, including US$ 21.8 billion in China’s import and US$ 18.2 billion in export. China has become Latin America and the Caribbean’s third biggest trading partner. Although trade with Latin America and the Caribbean only accounts for 3.5% of China’s total foreign trade for the time being, it has bright prospects and is likely to hit the mark of US$ 100 billion by 2010 so long as both sides act energetically.

China is now encouraging Chinese enterprises to invest and develop business abroad under the “go global” strategy. Preliminary statistics show that by the end of 2004, China had invested in a total of about 300 projects in Latin America and the Caribbean, inked commercial contracts worth US$4.52 billion and achieved a turnover of US$3.21 billion.

I have sensed the shared wish of many Latin America and Caribbean governments and business communities for greater economic and trade ties with China. For that to happen, we need to continue discussions on the ways to develop such ties. It is in our interest to be pragmatic and innovative so as to usher in a new phase of mutual assistance and cooperation between China and Latin America and the Caribbean. In this connection I have the following recommendations:

1. Keep tapping the potential while maintaining a stable trade growth. Optimize trading product mix, intensify cooperation on high and new technologies and high value-added industries, give weight to technological cooperation in broader economic cooperation so as to achieve diversification of trade products and strike a dynamic and positive trade balance.

2. Broaden mutual investment and strive to become each other’s major investment destination in the not-too-distant future. To this end, efforts must be made to overcome barriers such as geographical distance and difference in cultural backgrounds and increase mutual exchange and understanding between our two sides. In order to facilitate China’s greater participation in major investment projects in Latin America and the Caribbean, China hopes to become a formal member of the Inter-American Development Bank.

3. Strengthen mutual communications and address trade frictions in a positive manner on the basis of equality and consultation. It is important that disputes are approached and addressed through different channels, including the political, economic and diplomatic ones, and at multiple levels such as government, enterprise and intermediaries in accordance with WTO rules and relevant laws so as to avoid affecting the broader interest of trade and economic cooperation between the two sides.

4. Conduct vigorous trans-regional cooperation. I see regional integration as a new expression of economic globalization, and these two trends are mutually reinforcing. China has signed a few days ago with Chile a free trade agreement and discussing on a preliminary basis similar subjects with MERCOSUR.

5. Enhance experience-sharing and draw on each other’s strong points to achieve common development. Both faced with challenges of widening gap of wealth, environmental degradation and other shared problems, China and Latin America and the Caribbean countries should constantly compare notes through greater exchanges in a bid to promote sustainable economic development.


More Impetus for Cultural Cooperation

Exchanges on culture, science and technology, in my view, are indispensable because better knowledge can be gained in this way on each other’s values, history, tradition and cultural background, which will lay a more solid foundation for political and economic exchanges and cooperation. China is a country loaded with history and culture, and is becoming increasingly prosperous culturally in recent years along with social and economic development. Latin America and the Caribbean also boast a wealth of ancient culture, as suggested by the Aztec, Inca and Maya Civilizations. In addition, people in Latin America and the Caribbean are born with a joyous and passionate heart, and they have created numerous masterpieces in literature, painting, music and dance. I hope our two sides can keep close contact culturally so that we can learn from each other and, through rich and colorful cultural exchanges, contribute to the interaction and development of Chinese and Latin America and Caribbean civilizations as well as greater mutual understanding and friendship between the Chinese and Latin America and the Caribbean peoples.

Academic exchanges are important, too. It will help us learn from each other and better cooperate when we conduct academic exchanges in information technology, biological engineering, agriculture, mining and other areas. I also look forward to opportunities for economists from China and Latin America and the Caribbean to sit down and compare notes. After several decades of development, China has finally found the path of socialism with Chinese characteristics. Now we are building and improving the socialist market economy, a system that raises efficiency by the market and ensures equity by socialism. I believe every country must look for a development model and path best suited to its national conditions. This model or path shall never be “designed” and imposed by certain experts from foreign countries or international organizations. Experts’ views are worth listening to and should be well taken when necessary, but only after taking into account the national conditions. I am of the view that all countries, big or small, have their own success stories and lessons of failure in their course of economic development, which are food for thought to us. I myself very much like to read Mr. De Soto’s books. His theories are quite distinctive. I also highly appreciate the efforts made by the Chilean Government in reforming its social security system.

Potential Role for Non-governmental Exchanges

Non-governmental exchanges are unique and different from governmental ones. Being non-governmental in nature, such exchanges are more flexible and have access to a wider spectrum. In this respect, the China-Latin America Friendship Association has done some good work, as it has set up ties of exchanges and cooperation with 25 countries and 30 friendly organizations and convened three assemblies of organizations of friendship between China and Latin America and the Caribbean. The second assembly was held in Bogota, Colombia, which I attended with a business delegation. That trip has been a boost to our economic exchanges and trade. The third Assembly of Organizations of Friendship with China was just concluded in Argentina last November, which attracted more participating organizations and individuals than the previous one.

To sum up, despite the fact that China and Latin America and the Caribbean are far apart and quite different, with various exchanges and cooperation to be further advanced in many fields, I, as a prudent optimist, remain fully confident in the future of our cooperation. I would like to work with all of you to build a bridge of friendship between the Chinese and the Latin American and Caribbean peoples and play our part for greater cooperation and common development on both sides.