Speech at the Welcoming Banquet Hosted by Local Washington State Officials and Friendly US Organizations

Date：22 September 2015

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Dr. Henry Kissinger,
Governor Jay Inslee of the State of Washington,
Secretary of Commerce Penny Pritzker,
Seattle Mayor, Ed Murray,
Chairwoman Carla Hills of the National Committee on US-China Relations,
Chairman Mark Fields of the US-China Business Council,
Ladies and Gentlemen,
Friends,

Good evening, everyone. Thank you, Dr. Kissinger, for your kind introduction. Dr. Kissinger has always been able to come up with some new observations. His introduction has caused me to see myself in a new light. It is great to be among so many old and new friends here in Seattle on the first leg of my state visit to the US. First of all, I’d like to extend my cordial greetings and best wishes to all Americans, both here and across the country.

I am no stranger to Seattle and Washington. Seattle is known as the Emerald City and Washington as the Evergreen State, site of the majestic Mt. Rainier and the charming Lake Washington. The film Sleepless in Seattle has made the city almost a household name in China. Moreover, Washington exports to China more than any other state in the US, and China is the number one trading partner of the Port of Seattle. Washington and Seattle have become an important symbol of the friendship between Chinese and American people and the mutually beneficial cooperation between the two countries.

A Chinese saying goes, “The fire burns bright when everyone brings wood.” It is the close attention and painstaking work of our national governments, local authorities, friendly organizations and people from all walks of life in both countries that have made China-U.S. relations flourish. In particular, the National Committee on US-China Relations, the US-China Business Council, the US-China Policy Foundation, the US Chamber of Commerce, the China General Chamber of Commerce-USA, the Committee of 100, the China Institute, the Council on Foreign Relations, the Asia Society, the Brookings Institution and many other friendly groups and individuals have worked tirelessly over the years to promote friendly relations and cooperation between the two countries, leading to the state of relations. I would like to express my great praise and heartfelt gratitude to all the local governments, social organizations, universities, think tanks and people from all sectors of society who have dedicated themselves to the cause of China-U.S. friendship.

Ladies and Gentlemen,Friends,Since the founding of the People's Republic of China, and especially since the introduction of the policy of reform and opening up, China has been on an extraordinary journey, which my generation has directly experienced.

Toward the end of the 1960s when I was in my teens, I was sent from Beijing to do farm work for 7 years in Liangjiahe, a small village near Yan’an, Shaanxi Province. The villagers and I lived in earthen caves and slept on earthen beds. Life was very hard. There was no meat in our diet for many months in a row, so I knew what the villagers wanted the most. Later, when I became the village Communist Party secretary and was in charge of developing agricultural production, I knew what they needed. I strongly hoped to make it possible for them to often have meat for their meals. But this hope was very difficult to accomplish back then.

During the Chinese New Year celebration this year, I returned to the village of Liangjiahe. I saw blacktop roads lined with brick houses with tile roofs. Many households had Internet access, the elderly were receiving old age pensions, all the villagers had medical insurance and the children had access to a good education. Of course, eating meat was no longer a dream for the locals. This made me keenly aware that the Chinese Dream is actually a dream of the people. We will only be able to realize the Chinese Dream when we satisfy the people's yearning for a better life.

The changes that came to that village represent a microcosm of the progress that China has made through the policy of reform and opening up. We have transformed China into the world's second-largest economy, lifted 1.3 billion people out of dire poverty,and helped many people achieve a relatively comfortable life in a span of about three decades. The people have more personal dignity and rights than they’ve ever enjoyed before. This represents not only a tremendous change in the lives of the Chinese people, but also a huge step in the progress of human civilization as well as a major contribution to world peace and development.

At the same time, we are clearly aware that China is still the world's largest developing country. Our per capita GDP is only two thirds that of the global average and one seventh that of the US, ranking around 80th in the world. We still have over 70 million people living below the poverty line according to the Chinese standard. If measured by the World Bank's standard, the number would be more than 200 million. Over 70 million Chinese people live on government cost of living allowance, and the number of people with disabilities exceeds 85 million. Over the past two years, I have been to many impoverished areas in China and visited many poor families. I will never forget the look of longing in their eyes for a better life.

This all means that we still need to work harder to improve the lives of our people. The primary mission of a Chinese leader is to focus efforts on improving people's living standards and gradually achieving common prosperity. To accomplish this mission, we have put forward two goals named “Two Centenary Goals” for the century. One is to double the 2010 GDP and the country's per capita income by 2020 and ensure that most citizens are leading a relatively comfortable life. The second one is, by the middle of the century we plan to develop the nation into modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious, thus realizing the rejuvenation of the Chinese nation. Everything we are doing now is aimed at accomplishing these goals. We plan to bring the living standards in China up to a comfortable level, by comprehensively deepening reform, strengthening the rule of law, and strictly regulating the conduct of Party members. That is what we call our Four-Pronged Comprehensive Strategy.

Everyone is concerned about the direction of China's development and the orientation of Chinese policy, so I’d like to share some of my thoughts with you in this regard.

—China's economy will continue to experience relatively fast and stable growth. The Chinese economy is still operating within a reasonable range. The growth rate is 7% in the first half of the year, which is still one of the highest rates in the world. This was not an easy accomplishment, given the complex and volatile situation in the world economy. All economies of the world are facing difficulties, including our economy, which is also facing downward pressure. But this is only a bump in the road in our progress. We are focusing efforts on maintaining stable growth, deepening reform, adjusting structures, improving living standards and preventing risks, while strengthening and making innovations in our macro regulation to maintain medium to high economic growth. China is now carrying out industrialization, increasing use of information technology, and engaging in urbanization and agricultural modernization in a new way. China has a high savings rate, huge consumption potential, a hard-working population and a rising proportion of middle-income households. This has created enormous potential for the development of the service sector through huge domestic market and its great potential. China is focusing more on improving the quality and efficiency of economic growth and accelerating transformation of the economic growth model and adjustments in the economic structure. We are putting greater emphasis on innovation and consumption-driven growth. This is aimed at addressing the country's unbalanced, uncoordinated and unsustainable development and successfully transforming the Chinese economy while maintaining strong growth.

Recent abnormal fluctuations in China's stock market have caused widespread concerns. The stock market operates according to its own natural laws. It is the duty of the government to ensure open, fair and just market order and prevent massive panic. To this end, the Chinese government took steps to stabilize the market and prevent widespread panic in the stock market, thus avoiding systemic risk. Countries with mature markets have taken similar approaches. China's stock market is going through a phase of self-recovery and self-adjustment. On August 11, China moved to improve the central parity quotation mechanism for the currency, giving the market a greater role in determining the exchange rate. We have already seen some success in correcting the exchange rate deviation. Looking at both the domestic and international economic and financial situation, there is no basis for further depreciation of the RMB. We will continue the reform orientation of increasing the role of market supply and demand in determining the exchange rate and allow the RMB to float in both directions. We are against competitive depreciation or a currency war. We will not lower the RMB exchange rate to stimulate exports. The purpose of reform is to develop the capital market and improve the market-based pricing mechanism for the RMB exchange rate. This goal will not be affected by the recent fluctuations in the stock market and the foreign exchange market.

—The key to China's development lies in reform. The objective of our reform is to modernize the country's governing system and governing capabilities to enable the market to play a deciding role in the allocation of resources, to make better use of the government's functions, and to accelerate development of the socialist market economy, democracy, an advanced culture, a harmonious society and a sound ecosystem. At the Third Plenary Session of the 18th Party Central Committee in 2013, we decided on a comprehensive master plan for deepening reform and over 330 reform measures. In 2014, 80 major reform tasks were basically completed. In the first half of this year, we rolled out over 70 key reform programs, the effects of which are gradually becoming evident. Only the braves can win hard battles. We dedicate what it takes to press ahead with the needed reforms. We will resolutely pursue a market economy through reform and continue to introduce bold and result-oriented reform measures concerning the market, taxation, banking, investment and financing, pricing, opening up to the outside world and standards of living.

—China will never close its door to the outside world. Opening up remains a basic state policy of China. China's policies concerning use of foreign investment will not change, nor will its pledge to protect the legitimate rights and interests of foreign investors in China and to improve its services for foreign companies operating in China. We respect international business norms and practices concerning non-discrimination, the WHO principles of national treatment. We treat all market players, including foreign-invested companies, fairly, and encourage transnational corporations to engage in all forms of cooperation with Chinese companies. We will address the legitimate concerns of foreign investors in a timely fashion, protect their lawful rights and interests and work hard to provide an open and transparent legal and policy environment, an efficient administrative environment and a level playing field in the market. This includes effective intellectual property protection, in particular. We hope to broaden cooperation between China and the US and other countries.

—The rule of law is a basic strategy of China. As Xun Zi, a great Chinese thinker and educator said, “Law is the very foundation of governance.” We are working to promote the rule of law both in running the government and in government administration. We are combining efforts to improve the country, the government and society on a solid basis of the rule of law, to build greater trust in the judicial system, and to ensure that human rights are respected and effectively upheld. China treats foreign institutions and foreign companies fairly in the country's legislative, executive and judicial practices. We are willing to discuss rule-of-law issues with the US to increase mutual understanding.

China is a staunch defender of cybersecurity. The country has also been a victim of hacking. The Chinese government never engages in theft of commercial secrets or encourages or supports such attempts in any form. Cybercrimes against both commercial and government networks must be punished to the full extent of the law and in line with relevant international treaties. The international communities should work together to build a peaceful, secure, open and cooperative cyberspace on the basis of mutual respect and trust. China is ready to set up a high-level mechanism for dialogue with the US on countering cybercrime.

China recognizes the positive roles played by foreign non-profit organizations. As long as their activities benefit the Chinese people, we will protect their operations through legislation, protect their legitimate rights and interests, and will not restrict or prohibit their operations. On the other hand, foreign organizations in China need to abide by Chinese law and carry out their activities in accordance with Chinese law.

—China will continue to fight corruption. To forge iron, the hammer must be strong.. That hammer is the Communist Party of China, whose fundamental objective is to wholeheartedly serve the people. With a total body of over 87 million members, there are bound to be problems cropping up of one kind or another. If we let these problems go unchecked, we will risk losing the trust and support of the people. That is why we emphasize that effective governance of the country requires effective regulation of the Party, and effective regulation of the Party requires strict adherence to standards of conduct for the Party. In our vigorous campaign against corruption, we have punished both high and low corrupt officials in response to the demands of the people. This has nothing to do with a power struggle. It is nothing like what you see on TV in House of Cards. China is willing to cooperate closely with the international community in fighting corruption and tracking down fugitives. The Chinese people hope to gain the support and cooperation of the US side so that corrupt persons find nowhere to hide.—China will stick to its path of peaceful development. We have just commemorated the 70th anniversary of the victory of the Chinese People's War of Resistance against Japanese Aggression and the world war against fascism. An important lesson from history is that peaceful development is the correct path. Any attempt to seek domination or hegemony through force is bucking the tide of history and doomed to fail. The Chinese recognized as early as 2,000 years ago that, “Even a strong country can fall if it is over warlike.” China's military policy has always been defensive in nature and its military strategy consists of active defense. I’d like to reiterate here that no matter how developed the country becomes, China will never seek hegemony or engage in military expansion. To demonstrate our commitment to peaceful development, I announced not long ago that the size of China's military will be cut by 300,000 soldiers. China is ready to work with other countries to build a new type of international relations with mutually beneficial cooperation at its core. Confrontation and domination should be replaced by mutually beneficial cooperation and a new kind of thinking that leads to building partnerships should be encouraged to create a new situation in which all parties are able to develop and feel safe.

China has been a participant in, builder of, and contributor to the current existing international system. We resolutely safeguard the international order and system that is based on the purposes and principles of the UN Charter. Many countries, especially the developing countries, want to see a more just and equitable international system. But it doesn’t mean that they want to unravel the entire system and start all over again. What they want is to reform and improve the system to bring it in line with the times. This would serve the common interests of all countries as well as humankind.

China's development has benefited from the international community, and China, in turn, has contributed to global development. The Belt and Road Initiative, the establishment of the Silk Road Fund, and the proposal to set up the Asian Infrastructure Investment Bank (AIIB) are all aimed at supporting the common development of all countries, not seeking some kind of sphere of political influence. The Belt and Road Initiative is open and inclusive. We welcome the US and other countries as well as international organizations to join us. We have vigorously promoted economic integration in the Asia-Pacific. We promoted development of the Asia-Pacific Free Trade Zone in particular because we want to promote the formation of a free, open, convenient and dynamic space for development in the Asia-Pacific. We are seeking common, comprehensive, cooperative and sustainable security by working with other countries in the region and the rest of the international community to maintain peace and security in the Asia-Pacific.

Ladies and Gentlemen,Friends,In our meeting at Sunnylands in 2013, President Obama and I reached an important consensus on jointly building a new model of relations between the two countries. This was a major strategic choice we came to on the basis of historical experience, our national conditions, and the prevailing global trend.

Over the past two years or so, the two sides have acted in accordance with the agreement, steadily advanced bilateral coordination and cooperation in various fields and made important progress. We worked to cope with the aftermath of the global financial crisis in a joint effort to bring about global economic recovery. We stepped up exchange and cooperation in a variety of fields, leading to tangible benefits to both our peoples. Last year, bilateral trade, bilateral stock investment and total number of personnel exchanges all set new records. We maintained close communication and coordination on such international and regional hotspot issues as the Iranian nuclear industry, the Korean nuclear weapons issue, South Sudan, Afghanistan and the Middle East, as well as such global issues as Ebola and counterterrorism. All this cooperation across the Pacific Ocean speaks eloquently to the vitality and potential of China-US relations.

What can we do now to continue from this starting point to develop the new model of relations between China and the US, and how can we work together to promote world peace and development? The answer is to continue in the right direction by further developing this new model of relations on a step-by-step basis. Someone in China long ago said, “For a decision to be properly made, the past, the future and normal practices must be taken into consideration.” Several factors are particularly important for our efforts.First, we must correctly assess each other's strategic intentions. Building a new model of relations with the US characterized by non-conflict, non-confrontation, mutual respect and mutually beneficial cooperation is a priority of China's foreign policy. We would like to deepen mutual understanding with the US concerning strategic orientation and development path. We would like to see more understanding and trust and less estrangement and suspicion in order to avoid misunderstandings and miscalculations. We should strictly base our judgment on facts instead of listening to unfounded rumors, being paranoid or viewing the other through prejudiced lenses. There is no such thing as the so-called Thucydides trap, but when major countries make strategic miscalculations, they can create such a trap for themselves.

Second, we must unwaveringly promote cooperation and mutual benefit. And the interests and concerns of the parties involved must be considered for effective cooperation in reaching the greatest amount of common ground. Effective cooperation between China and the US could become a bedrock for global stability as well as a propeller to promote world peace. Conflict or confrontation between China and the US would lead to disaster for both countries and the world at large. There are many, many areas where we can and should cooperate. We should, for example, work together to improve the global governance mechanism, and to promote steady growth of the global economy and stability in the global financial market. We should conclude as soon as possible a balanced and high-level bilateral investment treaty (BIT), develop a new type of military relations between the two countries, expand practical cooperation concerning energy and environmental protection issues, strengthen cooperation and exchange in the areas of law enforcement, the fight against corruption, health and local issues, and tap the potential for cooperation in infrastructure development. We should improve communication and cooperation in the United Nations, APEC, G20 and other multilateral mechanisms as well as in addressing major international and regional issues and global challenges, to contribute even more to world peace, stability and prosperity.

Third, we must appropriately and effectively manage our differences. As a Chinese saying goes, “The sun and the moon shine in different ways, yet their brightness is just right for their respective time of day.” It is precisely because of these many differences that the world has become such a diverse and colorful place, making it necessary to find common ground and iron out differences. There is no such thing as a perfectly peaceful world, since disagreements among people are inevitable. China and the US view certain issues differently, so it is unavoidable that we may have different positions on such issues. What is important is how we manage those differences. And what is even more important is that the two sides respect each other, seek common ground while reserving differences, take a constructive approach to enhancing understanding and expand consensus in a sincere effort to turn differences into cooperation.

Fourth, we must foster friendship between our two peoples. Personal relationships are the foundation of state-to-state relations. Though geographically far apart, the people of the US and China have a long history of friendly exchange. Some 230 years ago, the Empress of China, a US merchant ship, sailed across the vast ocean to reach China. Some 150 years ago, tens of thousands of Chinese workers joined their American counterparts in building the transcontinental Pacific Railway. Some 70 years ago, China and the US, as allies in World War II, fought shoulder to shoulder to defend world peace and justice. Thousands of American soldiers sacrificed their lives for the just cause of the Chinese people. We will never forget the moral support and invaluable assistance the American people gave to our just resistance against Japanese aggression and our struggle for freedom and independence.

The Chinese people have always held American entrepreneurship and creativity in high regards. Long ago I read several famous US books such as the Federalist Papers and Thomas Paine's Common Sense. I was interested in the life story and thinking of George Washington, Abraham Lincoln, Franklin Roosevelt and other American statesmen. I also read some works by Henry David Thoreau, Walt Whitman, Mark Twain and Jack London. I was most captivated by Ernest Hemingway's work, The Old Man and the Sea, with its descriptions of howling wind, driving rain, roaring waves, the small boat, the old man and sharks. On my first visit to Cuba, I paid a special visit to the breakwater in Cojimar where Hemingway wrote this book. And on my second visit, I dropped by the bar Hemingway frequented and ordered a mojito, his favorite rum drink with mint leaves and ice. I just wanted to feel for myself what was going through his mind and what the place was like as he wrote those stories. I have always believed that it is important to get a good understanding of cultures and civilizations that are different from our own.

The Chinese character meaning person or people is formed by two strokes that support each other. The foundation of China-US friendship has its roots in their peoples, and its future rests with the young. I would like to announce at this time that China supports the program of 50,000 students from each country sent to the other country over the next three years and that China and the US will launch a China-US Year of Tourism in 2016. China is working to create even more favorable conditions for people-to-people exchanges.

Ladies and Gentlemen,Friends,Quoting from Dr. Kissinger's book, World Order, “Each generation will be judged by whether the greatest, most consequential issues of the human condition have been faced.” Martin Luther King said, “The time is always right to do the right thing.” We have come once again to a historical juncture. Let us work together to bring about an even better future for China-US relations and make even greater contributions to the happiness of our two peoples and the well-being of people all over the world.Thank you.