It is with pleasure and also a little pride, that I welcome such a large number of distinguished guests from both China and Europe in Luxembourg.
From the outset, I strongly supported the initiative by "Luxembourg for Business" to hold the sixth "Global China Business Meeting" in Luxembourg. It is indeed my firm conviction that for Europe, the 21st century will for a very significant part be shaped by the quality of the relationships it will build with what we up to now still call "emerging economies", among which China is undeniably the most important.
I have to admit to a personal fascination with China. Actually, it increases with every visit. The speed at which China evolves, the changes one can witness from one stay in China to the next are breathtaking. One can only admire the dynamic economic development over the past thirty years, but also the depth of the cultural heritage of this proud nation.
Ever since becoming Prime Minister in 1995, I have insisted on visiting China on a regular basis: Beijing of course, but also both the economic power houses, like Shanghai, as well as less developed regions. I am deeply convinced that for a European leader, time spent to better understand China is time well spent. There are of course political and business aspects, but it is, in order to get a true grip on the Chinese state of mind, at least as important to put effort in understanding the continued deep challenges the most populous nation in the world faces in its development.
Ladies and Gentlemen,
The year 2010 marks the 35th anniversary of the opening of diplomatic relations between the European Union and China. The positive development of Sino-European relations since 1975 is impressive. The European Union has become China’s biggest trading partner, while for the EU, China ranks second only to the United States.
Some people in Europe state such figures with a certain fear. They put the focus on possible negative side-effects or question more generally the development of global trade relations. This is not my line of reasoning.
It is my strong belief that both the European Union and China can only congratulate themselves for the excellence of the relationship developed over the last three decades. International trade is in the interest of both parties involved. It is also a solid basis for a broader association. Even in difficult economic times, I would even say especially in difficult economic times, protectionism is unwarranted. It is actually dangerous. Market access has to remain assured as long as it is honoured by both sides on the basis of a common understanding of the rules of the game.
China and the EU are today strategic partners that stretch far beyond trade. We have regular contacts at the highest level. The annual EU-China summits are not only evidence of the outstanding bilateral relations but also allow for a continued exchange of views on other topics of common interest. China does indeed assume its ever larger role within the international community with great responsibility. Our positions converge on a significant number of issues related to international governance. In addition, Europe has deep esteem for China’s continued support of the interests of developing nations.
This being said, friends can have disagreements. The EU would welcome if China would submit its objectives in relation to climate change to a binding international agreement, as the EU has done. We believe it to be in interest of China, especially because we can witness more and more Chinese companies to make highly valuable technological contributions in this field. Human rights are another topic to be addressed again and again.
As chairman of the Eurogroup, which brings together the Finance Ministers of the Eurozone, I have the pleasure of being able to meet on a regular basis with my Chinese counterparts. Since 2007, the Eurozone and China hold regular "macroeconomic dialogues" at the highest level. No later than last month I had most interesting exchanges with Prime Minister Wen Jiabao and Finance Minister Xie Xuren. As you are aware, the EU is concerned that a significant part of the trade deficit between Europe and China is related to the fact that China’s real effective exchange rate is undervalued. We therefore favour an orderly, significant and broad-based appreciation of the yuan. The EU also encourages China to rebalance its growth model by increasing the contribution of domestic consumption. China has taken some steps in this direction, but the results we could observe up to now were not exactly what we had hoped for. Given China’s important role as one of the world’s largest economies, we call on the Chinese authorities to share our concerns as to the avoidance of global economic imbalances.
We believe such steps also to be in the long-term interest of our Chinese friends themselves. More generally, I am very much encouraged by the fact that the EU and China are able to discuss these matters on the basis of mutual respect and the necessary understanding of each others position. We are not entitled to lecture China but China should engage in a complete political dialogue with the international community.
Ladies and Gentlemen,
Luxembourg lies in the heart of Europe. This is true as far as geography is concerned as well as when addressing international affairs and business matters. While Luxembourg might not offer the largest possible home market, it has proven over the last sixty years that span European integration, to be an ideal entry gate to the European market.
Luxembourg might be best known for its international financial centre, built on business friendliness paired with solid regulation. The first Chinese financial institution to set-up office in Luxembourg is enjoying the friendly business environment for over 30 years now.
But even longer, Luxembourg has positioned itself as a hub for trade and industry in Europe. American firms have learned to appreciate the advantages of a multilingual workforce in the heart of Europe for over 50 years now. While back then it was mostly industrial conglomerates that were attracted, it is today in the field of e-commerce that Luxembourg has succeeded in building up a solid reputation. A reputation that has spread from the US and Canada to Japan and India as well as, I would hope, China.
Luxembourg has longstanding trade relationships with China. Still today, Luxembourg can actually claim, as far as direct trade relations are concerned, to have a trade surplus with China. The Luxembourg Government is a strong supporter of even deeper ties with China. Apart from the broader EU-China relations, we also look forward to strengthening the bilateral relationships between our two nations. As I always say when meeting the Chinese Prime Minister: "Standing together the two of us represent a third of the world population."
Events like the Global China Business Meeting here in Luxembourg are part of this larger strategy to bring the EU and China as well as Luxembourg and China closer one to the other. I am confident that all of you, be it our honoured guests from China or their European hosts, will take from this Meeting a better understanding of the challenges but mostly of the opportunities an ever deeper and stronger relationship between China and Luxembourg represents.
Thank you very much for your attention.