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Home > Embassy News > 2011
"The Trend is Your Friend"
2011/11/16

On November 10, when the night fell in the London in early winter, the brightly lit conference hall at Claridge's Hotel was in a warm atmosphere. Over 70 elites from all walks of the society gathered here. They are all clients of PI CAPITAL, a leading investment consultancy in the UK, in finance, trade, investment, media and other industries, and some of them came from the United States. They are looking forward to listening to the voice of China conveyed by Ambassador Liu Xiaoming.

(Ambassador Liu talks with entrepreneurs)

Before Ambassador Liu started his speech, Mr. David Giampaolo, Chief Executive of PI CAPITAL, said to the guests that while the world economic conditions are fluid and Europe is struggling in debt crisis, the Chinese economy remains in good shape. Everyone wants to know the secret of China's success and the investment opportunities in the country.

In the warm applause of the audience, Ambassador Liu Xiaoming began his speech on the topic of "Invest in China". Ambassador Liu said with a smile that PI (派) in Chinese means "elegance" and "gentility", and that he was honoured to be in this club of "elegant gentlemen" to talk about China. He said that the first part of the speech would move the audience's thinking from 'Invest in China' to a new direction of 'Invest in Britain'. Indeed, China has accumulated huge foreign exchange reserves and its outward investment is rising quickly. Then does China need and welcome more inward investment? The answer is yes. China will keep the door open to foreign capital. Also China's pro-investment policy promises more opportunities for foreign investors. Of course, China is quite different today than in the early days of the reform and opening up thirty years ago, and is with a stiffer market competition. To invest successfully, investors must be aware of the general trends in China and seize the opportunities. The Chinese have a saying: "A leader must know the larger picture before taking a specific decision. A strategist must discern the prevailing trend before developing a short-term agenda."

(Ambassador Liu delivers a speech)

Ambassador said that the first trend is about China's economy. In medium to long term, China will continue to industrialize and urbanize, Chinese per capita GDP and consumption is going up and the country's technology innovation and workforce quality will further improve. China has strong internal demand to unleash and its growth drivers may get increasingly powerful. Ambassador Liu reminded the audience not to be misled by the temporary challenges in China's economy. He said all these challenges are manageable and can be effectively addressed and there is no significant risk of 'hard landing' at this moment.

The second trend is China's commitment to further opening-up. China will stay committed to the win-win opening policy. This year, China unveiled the 12th Five-Year Plan, which laid out a more pro-active strategy to deepen our opening-up. We will further open up the services sector. This means China will advance the reform of the Renminbi exchange rate regime, promote its cross-border use, and gradually move toward capital account convertibility. China is adopting a more balanced opening-up strategy tailored to various regions. This will develop a new competitive edge in the eastern seaboard, and at the same time encourage wider opening-up in western China. The aim is that the western region can better leverage its rich resources and skilled workers.

Ambassador Liu then pointed out the opportunities to be seized to invest in China:

First, opportunities from economic restructuring. Under the guidance of the 12th Five-Year Plan, China is moving faster to upgrade its growth model and speed up economic and industrial restructuring. To be specific, efforts have got underway to promote consumer-driven growth and strengthen technology innovation. Our central objective is to pursue resource-efficient and environment-friendly development and achieve coordinated, balanced and sustainable growth. As part of this overarching initiative, the Chinese government encourages more foreign investment to flow to modern agriculture, services sector, hi-tech industries, advanced manufacturing, new energy sectors and the vast inland areas. It supports foreign businesses creating R&D centres in China and bringing in more advanced technologies and human resources. These steps will open up new space for foreign investment in China.

Second, opportunities from an improved investment climate. Thirty three years of reform and opening-up and 10 years as a WTO member have made doing business in China much easier. China's legal infrastructure, policymaking and market environment are becoming more open, transparent and fair. The Chinese government has cleaned up over 2,300 laws and regulations, bringing our legal practices in economic affairs more in line with China's WTO commitments. China has cut its general tariff levels to 9.8 percent, way lower than the average of the developing world. Also China has removed all of the import quotas and certificates and other non-tariff measures. China has liberalized the international trading rights and lowered the threshold for foreign capital. Meanwhile, we have opened up 100 sectors in the services trade. These are close to the level of the western countries. China has made intellectual property protection a national strategy, and developed a sophisticated legal system and law enforcement to provide protection. On innovation and government procurement, all foreign-invested companies are accorded national treatment in China, and the Chinese government treats all companies, Chinese and foreign, as equals.

Ambassador Liu concluded his speech by a famous saying in the investment communities: "The trend is your friend."He expressed his sincere hope that the British businessmen and investors will follow these positive trends, seize the opportunities to establish presence and invest more in China and achieve a win-win future.

Ambassador Liu's wide ranging, well-targeted, reasonable and humorous remarks deeply attracted everyone present. They listened attentively, sometimes nodding in approval, sometimes showing a knowing smile, and sometimes taking notes down. Ambassador Liu's last word was followed by a prolonged applause from the audience.

In the Q&A session, the audience eagerly raised their hands to get this great opportunity. A fund manager asked if China will bail out Europe in the increasingly tense situation in the European debt crisis.

                                  

Ambassador Liu said that as EU's comprehensive strategic partner and major trading partner, China is closely watching the economic situation in Europe. China has confidence in the European economy and supports the efforts made by the European countries in response to the global financial crisis and in strengthening their economic governance. We believe Europe has the ability and wisdom to overcome the current difficulties and move out of the crisis. The solution to the debt crisis in Europe first requires the consensus of EU countries, particularly the euro-zone countries, to implement the relief measures as soon as possible. China has adopted some measures to help the EU to overcome the financial and debt crisis. Meanwhile China also hopes the EU will take concrete measures to ensure the safety of China's investment in Europe and facilitate the investment of Chinese enterprises in Europe.

A media professional asked how China would further promote itself in response to the largely one-sided view on China in most parts in the West.

Ambassador Liu replied: You're right, the West truly needs to understand more about China, and this better understanding requires the joint efforts of both sides. I have served as the Ambassador to the UK for exactly 600 days. During this period I have delivered 200 speeches and published many articles in the British media, with an aim of helping the rest of the world to know more about China. In this regard, we still have lots to do.

Ambassador Liu said that many Westerners who have been in China see a country very different from how it is characterized in press coverage in the West. It seems that the real China and the one in the media are two different countries. This is quite illustrating. The coverage of China in the Western media is often unbalanced and extreme, either excessively praising or demonising the country. The Ambassador suggested that the Western media professionals pay more visits to China, learn more about the life of the general public in the country and show a full picture of China to the world.

Ambassador Liu also answered questions on China's investment environment, environmental conditions and policies, political restructuring, Chinese enterprises to invest in Britain, opening of consumer services, government consultative and advisory mechanism, etc. His open, patient, detailed and reasonable answers not only eliminated the doubts in the minds of the audience, but also improved the listeners' knowledge and understanding of China to a new level.

At the end of the event, the audience offered warm applause again. Many surrounded the Ambassador and talked with him instead of leaving. They thanked and congratulated Ambassador Liu on his speech and said that they would come out of the rewarding event with a deeper grasp of the investment opportunities and political and economic policies of China. And that would bring them stronger confidence in China's economic future.

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