China’s New Normal and Its Relevance to the EU

Written by H.E. Ambassador Yang Yanyi, Head of the Mission of the People’s Republic of China to the European Union

Ambassador Yang Yanyi, Head of the Mission of the People’s Republic of China to the European Union

Lately, with the closing of the annual sessions of China’s top legislative body–the National People’s Congress (NPC) and its top political advisory body–the Chinese People’s Political Consultative Conference (CPPCC), China’s “new normal” and its comprehensive reforms in various sectors have drawn widespread attention. 

For the sake of helping our European readers to grasp the main thrust of China’s transformation and its relevance to the EU integration, I wish to briefly touch upon some key points transpired from the two sessions.

First, new normal. Being fully aware of the limitations of the old model of development heavily relying on fixed asset investment and exports, China aspires to steer its economy to a more sustainable track, valuing the quality over the quantity of the economic growth. While maintaining a medium-high-level growth rate, with the GDP increasing by approximately 7% this year, China is moving toward a medium-high-level development featuring quality and efficiency, and a more advanced stage of development with more sophisticated division of labor and a more optimized structure.

Second, deepening reform. Deeply convinced that reform and opening up is crucial for driving development, China is comprehensively deepening reform and structural adjustment. Among others, China is stepping up efforts in streamlining government administration and mandating more power to lower-level governments to remove roadblocks and further boost market vitality. China is also accelerating price reform, reform of the fiscal and tax systems, and reform of state-owned enterprises and state capital, as well as transforming and upgrading its foreign trade. As reflected by China’s performance last year, the new round of comprehensive reform has produced desired results and will continue to deliver desirable dividends.

Third, growth and adjustment. To ensure that steady growth and structural adjustment complement each other, China is moving faster to foster growth areas of consumption, increase effective investment in public goods, modernize agriculture, promote a new type of urbanization, upgrade industrial structure and promote scientific and technological innovation. To drive the economy by new engines, China, while upgrading traditional engines, is implementing such strategies and initiatives as “Made in China 2025”, “Internet Plus” and the Silk Road Economic Belt and the 21^st Century Maritime Silk Road, seeking innovation-driven development, extensively applying information and smart technologies, and launching major projects on high-end equipment and information networks.

Fourth, social progress. Last year, in spite of the complicated and challenging international and domestic environment, China created 13.2 million new urban jobs, increased per capita income by 8%, and reduced the number of people living in poverty by more than 12 million. In the coming year, China will continue to give top priority to employment and creation of jobs, strengthen social security, increase individual income, promote fair access to and strengthen the quality of education, improve the basic medical and healthcare systems and promote the fine tradition of the Chinese culture. Equally important, China is pressing ahead with energy conservation, environmental protection and sustainable development and actively responding to climate change. 

Fifth, improving government. The building of an innovative, clean and service-oriented rule of law government is a key element of China’s success. With this in mind, China has doubled its efforts to enforce the rule of law, including strengthening administrative law enforcement system. We draw wisdom, strengths and inspiration from our civilization and fine tradition and make sure that integrity, diligence and thrift are internalized in our values, ethos and culture, and institutionalized in our public service processes and framework. We also see to it that corruption, formalism, bureaucracy, hedonism and extravagance be guarded against and fought against persistently and consistently.

Last but not least, common development. China pursues an independent foreign policy of peace and remains fully committed to peaceful development, seeking mutual benefits, reciprocity and win-win. In this intertwined world, one can only stand to prosper by prospering together with others, the old practice of “going it alone” and the mentality of “the winner takes all” is no choice for China now or in the future. China strives to build a sound and stable framework for major-country relations, create a community of common future with our neighbors, strengthen unity and cooperation with other developing countries, and strive to make both the international system and the international order more just and equitable.

China’s transformation into a balanced, high quality and sustainable economy in an orderly and well-thought-out manner will have far-reaching implications.

Now China and the EU are solid trade partners with bilateral trade reaching over US$ 615 billion. Every single day China and Europe trade more than 1 billion Euros. Last year investment stock of EU enterprises to China stood at over US$ 95 billion, and China’s investment stock to the EU registered US$ 49 billion.

Combined China’s speeding up of a new type of industrialization, IT application, urbanization and agricultural modernization and adjustment of economic structure, its US$10 trillion import of goods, US$500 billion outbound investment, 500 million overseas visits in the coming five years and the EU’s relaunch of the process of structural reforms to build the medium-term growth potential will create broader converging interest and generate greater market, investment and cooperation opportunities.

It is very encouraging that as we celebrate the 40^th anniversary of China-EU diplomatic relations, both China and the EU are not only taking stock of our relationship, but most importantly setting the course for the future. The two sides are building up the momentum of high-level exchange of visits and strategic dialogue. The most exciting development in our strategic relationship is the negotiation on an ambitious and comprehensive bilateral investment agreement, the fifth round of which has just been successfully concluded.

In short, what is taking place in China and the EU and what is happening between China and the EU are of much relevance to each other. The past four decades of China-EU relations have told a telling story, i.e. countries might differ in history, culture, ideology and social systems, but so long as they are prepared to respect each other, reach out and treat each other on an equal footing, and work on joint interests while putting aside differences, they can engage more widely and build a very important relationship. With this in mind, let’s redouble our efforts to forge stronger ties between China and the EU, not only for the sake of our peoples, but also for the sake of world peace, prosperity and progress.