On the 17th of February this year, Her Excellency Madam Fu Ying, Ambassador of the People’s Republic of China to the United Kingdom, was invited to speak to the members of the Foreign Press Association in London. Her subject, ‘China’s role in the world and how it is combating the current world financial crisis’, was not only important, but most timely, as the world’s eye focuses on the steps China is taking to stimulate its domestic as well as the world’s economy. The speech came just prior to the important visit of Mrs. Hilary Clinton to the Chinese capital.
Addressing a full house, Her Excellency said that China’s economic stimulus package is aimed at improving domestic demand and the quality of life through infrastructural, social, and technological programmes; the aim is to maintain growth at 8%, which, according to Premier Wen, is a difficult task.
She disclosed that the Chinese government had unveiled a 4 trillion yuan investment package to stimulate domestic consumption demand. A significant amount is being invested in the infrastructure, such as the rail network, as well as in social and ecological improvement programmes. Science and technology are to receive 600 billion yuan, but with an emphasis on energy saving and emission reduction technologies. 650 billion yuan have been allocated for developing basic health care. “With these strong measures, 8% growth may be possible. However, the bigger challenge of employment cannot be met by investment alone,” she pointed out.
There is debate in China, whether the economic downturn will be reversed by the end of the year. The 6.8% growth of 2008’s last quarter was shockingly low for many years. Madame Fu Ying then turned to some honest home truths, “According to the latest figures, 20 million migrant workers – i.e. 10% of the total Chinese workforce – have become redundant, due to closures of export oriented factories. The majority have returned to their native villages. Of the 5.5 million college graduates last year, only 70% have found jobs; by July 2009, another 5 million graduates will be job seeking. Thus creating jobs is the priority of our macroeconomic policy alongside maintaining growth.”
Madame Fu Ying continued, “Economists are predicting a more difficult first half of this year, but we remain cautiously optimistic about the second half. Some initial signs of positive turnaround showed last December, as enterprises reported rising sales and inventory reductions. The feeling in China is that it is not possible for China to control the risks and the uncertainties of the external environment, but we have reasons to be confident about the challenges facing China.”
The Ambassador stated that since the financial crisis started in the US, the world has seen greater attention and reporting on China. Many in China are puzzled about the ups and downs of these views – swinging from expecting China to save the world to the concern that China itself is going to crash. “The feeling in China is that while we cannot control external factors, we have reason to be confident about our own challenges. We have a strong fiscal position and have enjoyed double digit growth for years; there is still considerable fiscal room for stimulus.”
She pointed out that China’s long term trends remain unchanged. Rapid industrialisation and urbanisation will continue to generate huge demand; there is an enormous market waiting to be explored in rural China. All this will help sustain China’s long-term growth. Although Chinese business as a whole is suffering from operational problems, she said that some companies are already beginning to see slight improvements in sales while electricity use is up, as is the stock exchange. Although it is too soon to know how fast the Chinese economy will recover, economic pundits are optimistic for improvement in the third quarter with 8% growth by the end of 2009.
Working with international communities
Madame Fu Ying said that China realises the importance of working with the international community to combat the economic crisis and resist the urge for protectionism. She said China’s stimulus package is not only good for China, but for the world, as investment will go straight into the global economy and not simply to banks.
She also touched upon Premier Wen Jiabao’s visit to Europe, which had been aimed at emphasising Chinese confidence in its ability to fight the crisis and continue projected growth. He also wanted to raise confidence of the world in the economic prospects of China. Premier Wen had many discussions on this subject with Prime Minister Brown in addition to meeting with members of Britain’s business, academic and media circles. The two countries share much in common in the reform of international financial institutions and in increasing the representation of emerging economies. Both oppose trade and investment protectionism. China is working closely with the UK in the preparations for the G20 Summit in London.
British Prime Minister Brown has called for doubling UK’s exports to China by 2010. A Chinese purchasing mission is expected soon and the UKTI is preparing a list of potential export items to China.
Learn more about China
Madame Fu Ying called for people in the West to obtain more knowledge about China; its history and culture. She said that although every Chinese youth knows Shakespeare’s Macbeth, few British people have heard of famous Chinese literary titles such as Dream of the Red Chamber. She said that a lack of understanding and a “deficit” in the West’s understanding of China has led to most problems in recent years. “China is at a crucial juncture in its relations with the world. China grew out of isolation and backwardness and embarked upon the track of industrialisation. It is learning to engage with a world that is ready to work with it. However, the concern is often expressed in the Western world about what kind of power China will become and what will become of the world with a strong China?
Such a concern is hardly surprising. China was separated from the world for too long and it has only been 30 years since reforms were implemented. Many things in China cannot be explained by Western traditions and theories. For China, the task of identifying itself and defining its role in the world is equally formidable. After the Olympics, there was a lot of talk of China being a world power. Many in China do not believe that. The majority’s view was that China should try to achieve peaceful development through cooperation and gain greater understanding and acknowledgement from the world. They also realized that as China becomes stronger, it should play a greater role in dealing with the common challenges of the world and in building a harmonious world.
Lastly, Madame Fu Ying turned to the audience and ended on an encouraging note, “The media has an important role to play in bridging China with the world. I am glad to see that balanced reporting about China is on the increase.”
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Her Excellency, Madam Fu Ying, China’s Ambassador to the United Kingdom is her country’s leading diplomat. Elegantly turned out, candid and concise, with an excellent command of the English language, Madam Fu Ying has held important posts as the Ambassador to the Philippines, Australia and headed the UN team in Cambodia in 1990.
Box, Side quote:
Mme Fu Ying emphasized the introduction of a new ruling, requiring 30-day advance discussions with the trade union for layoffs of over 20 workers or 10% of any workforce