Speech by Premier Li Keqiang at the 21st ASEAN Plus China, Japan and ROK Summit

Speech by H.E. Li Keqiang

Premier of the State Council of The People's Republic of China

At the 21st ASEAN Plus China, Japan and ROK Summit

Singapore, 15 November 2018

Prime Minister Lee Hsien Loong,

Colleagues,

It gives me great pleasure to attend the 21st ASEAN Plus China, Japan and ROK (APT) Summit. On behalf of the Chinese government, I would like to express sincere thanks to the Singapore Government for its thoughtful preparations and arrangements for the Summit.

We are now at a special moment in time. It has been 10 years since the global financial crisis and 20 years following the Asian financial crisis. Exposed to the extensive impact of both crises, we Asian countries have stood the tests and continued to be a leading engine for global growth. ASEAN, China, Japan and the ROK have played a pivotal role in this process, and the APT framework, which was created to meet the Asian financial crisis, can also rightly claim credit for our progress.

As we speak, the world economy is still on the road to recovery, yet factors of instability and uncertainties have notably increased, posing risks and challenges that are deeply concerning. Protectionism and unilateralism are on the rise. With economic globalization suffering setbacks, the rules-based international order and the multilateral trading system are coming under strain. Just as we did before, the APT countries should work together in the spirit of solidarity and mutual help to tackle the challenges head on and turn crisis into opportunities through a collective response. We need to shoulder greater responsibilities for regional stability and play a bigger role in promoting regional prosperity and development. We should remain committed to economic globalization, multilateralism and free trade, and work to advance regional economic integration and build an open world economy. We need to seize the opportunities brought by the new round of technological and industrial revolution to strengthen innovation cooperation and nurture new drivers of growth.

The APT economies have a combined GDP of $21.9 trillion, accounting for 27 percent of the world economy. Having surpassed that of the US and the EU, APT countries carry significant influence in the world economy. With such flagship projects as CMIM, AMRO, APTERR and East Asia Forum under its umbrella, APT cooperation has become more mature in institution building. We have sufficient means and capabilities to handle all kinds of difficulties and challenges. China will work with other APT countries with greater resolve and a longer-term perspective to plan for the future of East Asian cooperation. Together, we will promote a higher level of integrated development in East Asia and inject new impetus into the world economy.

The year 2018 marks the beginning of a second 20-year period for APT cooperation. At this new starting point, all parties need to make full use of APT cooperation as the main channel of East Asian cooperation, step up efforts to advance regional economic integration, and jointly work toward an East Asia Economic Community (EAEC). In this context, I would like to make the following proposals.

We need to move forward the EAEC with concrete actions. The EAEC will facilitate intra-regional cooperation across the board and serve as a useful platform for supporting the growth of APT countries. It has a significant role to play in resolving the challenges we face and steering future APT cooperation. At our meeting last year, my proposal to advance the building of the EAEC received positive response from various parties. To accelerate regional economic integration, I would like to propose that we instruct our trade ministers to work closely through the AEM Plus Three Consultations on the vision and roadmap for the EAEC in order to convert this initiative from vision into actions.

We need to speed up FTA building. East Asia is one of the most dynamic growth areas in the world. With free trade and market opening policies widely pursued in the region, East Asia enjoys huge potential in intra-regional trade. Trade among APT countries has now reached $4.7 trillion, accounting for almost half of our total foreign trade. Regional free trade arrangements have been thriving. ASEAN has established the ASEAN Economic Community and developed bilateral free trade arrangements with China, Japan and the ROK respectively. RCEP, with its extensive membership, will help lay an important foundation for East Asia economic integration, as it reflects the practical realities of our region and seeks to accommodate the interests and concerns of different countries. Substantial progress has been made in RCEP negotiations this year. This has made us more confident in the prospect of an early conclusion. China will work with all other parties to settle the left-over issues as soon as possible in order to conclude a modern, comprehensive, high-standard and mutually beneficial free trade agreement.

It is important for us to step up research and cooperation on supply chain connectivity among APT countries to improve regional supply chain and value chain and enhance resilience in development. At the same time, we will more proactively advance the China-Japan-ROK FTA negotiations to inject a fresh impetus to the building of the EAEC.

We need to enhance financial security. Financial cooperation is the earliest and most fruitful area of cooperation in the APT framework. Faced with rising uncertainties in the international capital markets and growing financial risks in the region, we need to take concrete steps to make the Chiang Mai Initiative Multilateralisation safer, more effective and more readily available, and explore the possibilities of using local currencies. Efforts should be made to support the ASEAN+3 Macroeconomic Research Office in improving its economic surveillance capacity and consolidate regional mechanisms for financial risk prevention and rescue. China will contribute additional funding to the Credit Guarantee and Investment Facility and work with regional countries to develop local currency bond markets for greater regional financial stability.

We need to broaden innovation cooperation. With a new wave of technological and industrial revolution gaining momentum, the burgeoning new technologies and industries such as big data, the internet of things and AI are bringing new opportunities to regional countries in terms of development and cooperation. China, Japan and the ROK are all big innovators and the ASEAN has been actively pursuing a Smart Cities Network (ASCN). In this context, innovation could be a new growth driver to APT cooperation. We need to strengthen innovation policy exchanges and communication, conduct extensive innovation cooperation among industries, universities and research institutes, and make greater efforts in human resource development and in creating networks of innovators. China proposes to host an APT Young Scientists Forum next year and welcomes the active participation of all parties in the APT SME Service Alliance launched in China last August, with a view to developing a regional platform for innovation exchanges and cooperation.

We need to promote inclusive development. Given APT countries' different development stages, unbalanced and inadequate development remains a prominent challenge in our region. It is, therefore, incumbent on us to work out ways of delivering more benefits of regional development to our peoples. Our joint effort to advance the Belt and Road Initiative (BRI) offers a new platform for advancing inclusive development. China will work to further synergize the BRI with the Master Plan on ASEAN Connectivity (MPAC), promote greater connectivity across the region and build stronger transport, energy and information infrastructure. This will be conducive to stronger growth and to narrowing the development gap in our region. China, Japan and the ROK are exploring a "China-Japan-ROK+X" model to prioritize cooperation with ASEAN countries in industrial capacity, environmental protection, disaster management, health and poverty reduction, with a view to promoting sustainable development of our region.

We need to forge closer ties among our peoples. The friendly exchanges among our peoples are deeply rooted in history and have lent strong support to closer regional cooperation. We need to strengthen cooperation in culture, education, tourism, media and youth, expand people-to-people exchanges and deepen mutual trust and understanding. China proposes to develop an APT cultural cities network on the basis of East Asian Cultural Cities and the ASEAN City of Culture. We will expand cooperation between our youths, implement the Memorandum of Cooperation on APT Tourism Cooperation, and carry out education cooperation including running joint universities and mutually recognizing credits and diplomas. We can make full use of APT Cooperation Fund to promote cultural exchanges. The East Asia Forum and the Network of East Asian Think-Tanks should be fully leveraged to facilitate East Asian cooperation. China will continue to run the APT Rectors' Conference, the APT Media Cooperation Forum and the "Understanding China" program to foster an enabling environment for open dialogue and mutual learning.

On the Korean Peninsula, we have seen continued momentum of dialogue and de-escalation on the whole, with various parties maintaining dialogue and interactions. This has presented opportunities for political resolution of this issue, yet challenges remain. China stays committed to denuclearization, to peace and stability of the Peninsula and to resolution through dialogue and consultation. We have endeavored to promote dialogue for peace and move toward the goal of a nuclear-free and peaceful Peninsula. As a close neighbor, China will continue to do its part for lasting peace and stability on the Peninsula and in the wider region.

Colleagues,

This year the Chinese economy has on the whole maintained stable development, with major indicators performing within a proper range. GDP grew by 6.7 percent year-on-year in the first three quarters. More than 11 million new jobs were created in towns and cities, which kept the surveyed urban unemployment rate stable at round 5 percent. CPI registered moderate growth. Foreign exchange reserves have been maintained at above $3 trillion. Structural adjustment has picked up pace, with consumption and services playing a stronger role as the main engine of growth. High-tech, equipment manufacturing and IT services industries have all seen fast expansion. Profits of large-scale companies have been growing at double-digit rates. Over 18,000 new businesses are set up on an average day. New drivers now contribute over 30 percent to economic growth. All in all, China’s economic fundamentals remain sound.

That said, affected by factors such as shifting dynamics in its external environment, China is also faced with notable challenges in maintaining growth. Nevertheless, thanks to ever stronger internal engines of growth, the Chinese economy has acquired great resilience, huge potential and broad room for maneuver. We are seeing parallel progress in the new type of industrialization, IT application, urbanization and agricultural modernization. We have a 900 million-strong labor force, over 170 million of whom have had higher education or professional training, providing abundant supply of human capital. With the swelling ranks of middle-income earners, there has also been accelerated upgrading of consumption in the market of over 1.3 billion people. With ample policy tools and means for macro regulation at our disposal, we are well-placed and well-equipped to tackle all kinds of risks and challenges, and we will be able to deliver our targets for economic and social development, and move the Chinese economy toward high-quality development.

This year marks the 40th anniversary of reform and opening-up in China. In the past four decades, China has not only realized fast development at home but also created development opportunities for countries around the world. China's foreign trade grew at an average annual rate of 14.5 percent, making China a major trading partner for most countries in the world. For many years now, China has contributed over 30 percent to world growth. We will continue to press ahead with reforms to streamline administration, delegate government powers, enhance regulation where necessary and improve government services. Our policies will be more transparent and our regulations fairer and more impartial. We will further widen access by foreign investors to China's financial and other services sectors as well as the manufacturing sector and cut import tariffs on goods. Efforts will also be made to strengthen IPR protection, create a level-playing field and foster a world-class business environment.

The first China International Import Expo held successfully in Shanghai a few days ago represented a major step by the Chinese government to advance a new round of high-quality opening-up. It was also meant to show support for economic globalization and promote free trade. At the Expo, China reached intended deals worth $10.9 billion with the ten ASEAN countries and Japan and the ROK. And Japan and the ROK became the top two countries in the number of participating companies. It is estimated that in the coming 15 years, China will import more than $30 trillion worth of goods and $10 trillion in services. It will create bigger and greater opportunities for businesses all over the world to access the Chinese market, which will contribute to the growth of our region and the world.

Colleagues,

APT cooperation, which is now at an important stage of further expansion, faces a rare opportunity for even faster progress. China will work with all other parties to build consensus, enhance collaboration and deepen practical cooperation across the board to advance the building of the EAEC and deliver a better future for our region.

Thank you.