|Speech By Ambassador Cao Zhongming at The Exclusive Dinner Hosted by The Flanders-China Chamber of Commerce|
16 June 2022
De Warande, Brussels
Distinguished President Kurt Vandeputte,
Ladies and Gentlemen,
Friends from the Flemish Business Community,
Good evening. It is my pleasure to attend this exclusive dinner hosted by the Flanders-China Chamber of Commerce (FCCC), which gives me the opportunity to meet face-to-face with friends from the business community for the first time after over two years. I was also invited to another important event tonight. But I believe this event by the FCCC should be prioritized. Under the compound impact of COVID-19 and major geopolitical changes, the world economy is facing severe tests and most countries are dealing with a downward economic pressure. A moment like this calls for greater dynamism and contribution from the business community and makes it all the more important to heed the views of the business community. Before we start our discussion, I want to first brief you of some important information about China of your interest.
Since March this year, due to the impact of both changes and a pandemic unseen in a century, some unexpected factors have affected the Chinese economy. Let me share with you some figures. From January to April, China’s total retail sales of consumer goods dropped by 0.2 percent year-on-year, the Consumer Price Index (CPI) increased by 1.4 percent, and residential housing sales fell by 29.5 percent. These numbers show that the negative effect of the recent resurgence of infections on China’s consumption has begun to be felt. Having said that, there are still many highlights in the first four months. For example, China’s investment in hi-tech manufacturing grew by 25.9 percent, and trade in goods was RMB 12.58 trillion, increasing by 7.9 percent year-on-year.
Our assessment is that the impact of the recent increase of COVID cases on China’s economy is only short-term and external. The fundamentals sustaining China’s long-term, steady economic growth remain unchanged and the prevailing trend of transition and upgrading toward high-quality development remains unchanged. We are fully confident about this. I am particularly happy to see the solid progress made in China-Belgium practical cooperation in the first four months of this year. Our bilateral trade in goods reached USD 13.7 billion, up by 17.9 percent year-on-year. Non-financial direct investment from China to Belgium was USD 3.59 million, and 18 new Belgian companies were set up in China, with a paid-in investment of USD 56.23 million.
On this occasion, I want to discuss three topics with you.
First, why has China been committed to the dynamic zero-COVID policy?
The right to life is the most important human right. The overall principle of dynamic zero-COVID does not mean zero infection, but to keep the spread of the virus under control within the shortest period of time and at the lowest social cost. It is aimed at protecting people’s health and ensuring normal life and production to the fullest possible extent. With its new variants, Omicron has been highly transmissible and difficult to detect. There are 267 million people aged above 60 in China. Given the unbalanced development of different regions and an overall shortage of medical resources in China, adopting a “living with the virus” strategy will bring the risk of running out of medical resources, threatening the health of patients with underlying conditions, the elderly, children, and pregnant women, among others.
Necessary measures are indispensable to achieving dynamic zero-COVID. They may bring temporary impacts or challenges to foreign-invested companies, but they are needed to effectively stem the spread of the virus and realize business reopening in an orderly way. The Chinese government has always put people and their lives front and center and has been committed to dynamic zero-COVID. As a result, China has been able to minimize the impact of the pandemic and ensure stable economic and trade cooperation with foreign partners. And it is on such a basis that China has been able to harness the strengths of its fairly complete industrial system and vast market to provide urgently needed supply and demand for the world economy. Since the start of COVID-19 over two years ago, practical cooperation between China and Belgium has not been notably impacted. Rather, bilateral trade has made further progress. This is one of the best examples.
Second, has China become less attractive for foreign investment?
Some in the West claim that China’s COVID policy is undermining it competitive edge as a global manufacturing center and its attractiveness to foreign investment. Foreign investors are leaving China at a faster pace to look for substitutes. The truth is, despite the fact that some foreign investors have adopted a diversified approach due to the pandemic and geopolitical influence, they have not slowed down their investment in China. According to reports of the German Chamber of Commerce and American Chamber of Commerce in China, over 70 percent of German companies and over 60 percent of American companies plan to increase investment in China. In 2021, China attracted a record volume of foreign investment, up by 14.9 percent compared with the previous year. In the first four months of this year, paid-in foreign investment in China went up by 26.1 percent year-on-year, and 185 large projects each with foreign investment of over USD 100 million were added.
The Chinese government has been accelerating opening-up. It has granted national treatment to more foreign companies in more areas, kept shortening the negative list, unleashed more benefits of openness, further strengthened services for foreign investment, improved the business environment, coordinated efforts to help foreign companies resume operation, and ensured faster implementation of major projects. Foreign investors who are determined to maintain long-term presence in China will gain high growth and return by being deeply rooted in the Chinese market. Vision decides results. Whether to focus only on immediate interest and turn away for substitutes or to bear in mind the long-term interest, stand with China to tide over the difficulties and create a future together, I believe you will make the wise decision.
Third, is there more growth space for China after the pandemic?
On 25 May, a national teleconference on ensuring stable overall economic performance was held in China. Premier Li Keqiang stressed at the conference the need to implement policy measures set out at the Central Economic Work Conference and in the Government Work Report within the first half of this year. This is the latest move in the Chinese government’s package measures for steady economic growth. China has a population of over 1.4 billion, a 900 million strong labor force, and over 170 million people with high-level education and professional skills. In recent years, China has been integrating into the global industrial division of labor and moved its advanced manufacturing steadily to the medium-high end, giving the Chinese economy a greater adjustment space. China has a per capita GDP of over USD 12 thousand, a middle-income group of over 400 million people and more than 150 million market entities. China is the world’s second largest consumption market and the largest trader of goods. I don’t believe anyone would want to miss such a big market.
I have been working in Belgium for over three and half years. One thing I always find impressive is that despite the big progress in China-Belgium practical cooperation, there is still great potential to tap. The business community of Flanders has always had a pioneering spirit in cooperating with China. We hope that in areas where Belgium has strengths and China has demands, such as innovation, digital economy, healthcare, agriculture, food, chemical industry, green and low-carbon transition and sustainable development, you will continue to enhance cooperation with Chinese partners to further explore the Chinese and Belgian markets, jointly explore third markets, ensure stable global industrial and supply chains, and achieve mutual benefits.
Friends from the Flemish Business Community,
At the Global Trade and Investment Promotion Summit on 15 May, Chinese President Xi Jinping reiterated that China’s resolve to open up at a high standard will not change, and that the door of China will open still wider to the world. We will continue to provide necessary facilitation for you to do business in China. We hope you will stay fully confident in sustained development of the Chinese economy and society and stay resolved in investing in China. To conclude, I wish China-Belgium practical cooperation greater achievement; I wish you good health, all the best to your family and every success in your business.