Keynote Speech by Chinese Ambassador to Sweden Cui Aimin at the Working Lunch Hosted by Sweden-China Trade Council

On 8 May, 2024, Chinese Ambassador to Sweden Cui Aimin attended the working lunch hosted by Sweden-China Trade Council and delivered a keynote speech entitled：”Joining Hands for the Win-Win Future, Bringing China-Sweden Economic and Trade Cooperation to a New Level”. The excerpts are as follows：

It gives me great pleasure to attend the working lunch with SCTC again. Now I'd like to exchange views with you on China's economy and China-Sweden economic and trade cooperation.

Firstly, China's economy has maintained recovery momentum and performed well this year.

In the first quarter of 2024, despite the severe and complex international environment and the challenging domestic tasks of promoting reform, development and stability, China's economy still grows above expectation. With continued optimization of economic structure, enhanced quality and efficiency, basically steady prices, generally improving market expectations, China got off to a good start in economic and social development. In the first quarter, the year-on-year GDP growth rate was 5.3%. Import and export of trade in goods exceeded 1.43 trillion USD for the first time in history for the same period. The manufacturing PMI in April was 50.4%, indicating that the manufacturing industry is picking up. Several international institutions have raised their forecasts for China's economy. Goldman Sachs raised its forecast for China's GDP growth rate in 2024 from the previous 4.8% to 5.0%, and Morgan Stanley raised its forecast from 4.2% to 4.8%. Foreign media believe that the good performance of China's economy has provided more new opportunities for the development of foreign enterprises and injected new impetus into the growth of world economy.

After taking multiple measures, the issues such as weak real estate sector, not so strong recovery in consumption, and the slight decline in foreign investment are being steadily addressed and the effects are continuously emerging. In the first quarter of this year, transactions in several residential real estate markets have successively stepped out of the downward range, showing signs of stabilization and recovery. Domestic demand contributed 85.5% to economic growth and consumer confidence continued to rebound. 12,000 foreign invested companies were newly established, up by 20.7% year-on-year. The actual use of foreign capital exceeded 43 billion USD, of which nearly 5.7 billion USD were invested in the high-tech manufacturing industry, further optimizing the structure of foreign investment. Recently, A.T. Kearney, an American management consulting firm, released its Global Foreign Direct Investment Confidence Index for 2024, indicating that China's ranking rose to the 3rd from the 7th, reflecting the willingness of multinational companies to continue to expand investment in China. In general, China's economy enjoys strong resilience, tremendous potential, great vitality and the fundamentals sustaining its long-term growth remain unchanged.

Secondly, China has bright economic prospects and would like to share the development opportunities with the world.

As the largest engine of world economic growth, China has a sound foundation underpinning the development and many favorable conditions. First, China's economic development has a solid foundation. After 40 years of reform and opening up, China has made great strides forward, from "crossing the river by feeling the stones" to "boldly try and break through", from the establishment of the first special economic zone in Shenzhen to the countdown of the customs closure operation of Hainan Free Trade Port, China has accumulated a strong material and technological foundation, as well as valuable experience in the fields of economy, science and technology, culture, society and ecology, providing solid support for maintaining steady economic growth and coping with risks and challenges. Second, China is developing new quality productive forces according to local conditions. At present, China's economy has entered a new stage of high quality development, where innovation plays an increasingly important leading role. In 2023, China's innovation index ranks 12th in the world, and its R&D expenditure exceeds 469 billion USD, accounting for 2.64% of GDP. High quality development driven by innovation will promote the emergence of new market demands, investment opportunities and cooperation projects, providing vast space for all kinds of enterprises to achieve mutual benefits and common development in China.Third, China is always committed to opening up. China cannot develop in isolation from the rest of the world, and the world also needs China for its prosperity. China has always been promoting opening up, upholding free trade, and actively integrating into the world. The World Economic Outlook report released by IMF on April 9th shows that over the past two decades, G20 emerging economies have become much more integrated with the global market, among which China generates the largest economic "spillovers" to the rest of the world. A more open China will no doubt bring more opportunities for win-win cooperation to the world.

From May 5 to 10, Chinese President Xi Jinping pays a state visit to three European countries and the visit is still ongoing. This is the first visit by the Chinese head of state to Europe in the past nearly five years, which is of great significance to the development of Sino-EU relations and practical cooperation between the two sides. President Xi Jinping pointed out that, as the world enters a new period of turbulence and transformation, China and the EU, as two major forces, should continue to see each other as partners, stay committed to dialogue and cooperation, deepen strategic communication, enhance strategic mutual trust, build strategic consensus, carry out strategic coordination, work for steady and sound growth of China-EU ties, and continue making new contributions to world peace and development.

China follows a win-win strategy of opening-up, holds the view that everyone should appreciate others and promote shared prosperity, and constantly brings new opportunities to the world through China's new development. First, China's complete industrial system provides foreign enterprises with efficient production and logistics solutions and reduces their operation cost. China is a country with vast territory and complex geological location conditions. Extensiveness and comprehensiveness are unique advantages of China's manufacturing industry. China not only has a relatively sound and comprehensive basic industrial system, but also has the world's leading industrial layout, which enables a rapid response to global supply and demand changes with its advantages in scale and cost. All types of enterprises can find ideal partners in China. Second, China's abundant high-caliber talents pool provides high-quality human resources for foreign enterprises. Every year, more than 5 million students majoring in science, technology, engineering, and math (STEM) graduate from universities, and the number ranks top in the world. According to international think tanks, Chinese universities have trained about 50% of the world's top artificial intelligence (AI) researchers, ranking the first in the world. With more than 250 million people receiving higher education, China's total talent resources, scientific and technological human resources, and R&D personnel resources rank the first in the world. This has become an important power to support China's manufacturing and innovation, and enables more "Chinese wisdom" continuously flowing to the rest of the world. Third, China's super-size market has become a fertile land for many multinational companies to promote global innovation. China has built up a moderately prosperous society in all respects, with more than 800 million people having been lifted out of poverty. 400 million people are now in the middle-income bracket, and the number is expected to reach 800 million in future, forming the largest and most potential middle-income group in the world. China also has a high-degree integration of "applicable technology plus market application", which amortizes the costs of technology development and production. The advantage of the huge market not only provides broad space for China's industrial development and consumption upgrading, but also brings massive market opportunities to countries around the world.

Here I would like to talk about the topic of the So-called "China exporting overcapacity" which has gained attention recently in the media. In a market economy,the balance of supply and demand is relative, and the imbalance of supply and demand is universal. Moderate overcapacity is conducive to full competition and survival of the fittest. Overcapacity in specific industries in a certain period of time is the result of many factors, such as market competition, economic periodic fluctuation and so on. In fact, China's overcapacity is a structural one, and the capacity of many high-end industries such as chips, bio medicines, are not excessive, but insufficient. Let's take the new energy industry as an example. The advantages of China's new energy-related industries are the embodiment of multiple advantages such as technology, market and industrial chains. The output of related products is mainly consumed at China's domestic market, and there is no large-scale export. For example, in 2023, the export volume of new energy vehicles accounted for only 12.7% of the total sales. From a practical point of view, China's exports of new energy-related products have helped European countries survive the energy supply crisis, reduce inflation and strongly support the green and low-carbon transition. We hope to enhance global productivity and efficiency through open cooperation, to maintain the stability of the global supply and industrial chains, and to better promote common development.

Thirdly, the economic and trade cooperation between China and Sweden has a solid foundation, great potential and promising prospects.

China and Sweden have a long history of economic and trade exchanges. At present, more than 10,000 Swedish enterprises are conducting trade with China and more than 600 Swedish enterprises are operating in China. Many well-known enterprises such as Scania, ABB and AstraZeneca have been expanding their investment in China and the Chinese market has increasingly become the main engine of their growth of performance. By deeply cultivating the Chinese market, Swedish enterprises have not only contributed to China's development, but also realized their own development.

In 2023, the bilateral trade volume in goods between China and Sweden reached 18.85 billion USD. By the end of 2023, Sweden's accumulated investment in China totaled 6.88 billion USD and China's accumulated investment in Sweden totaled 19.48 billion USD. Although the two-way trade and investment between China and Sweden declined slightly in 2023 compared with the previous year,the trade structure has been constantly optimized and adjusted, and the proportion of cooperation in emerging areas has been increasing.

In recent years, more and more Chinese enterprises have come to Sweden for cooperation, and the cooperation in the sectors such as new energy, electric vehicles has increased its share. For example, Senior Material and several other Chinese companies are providers of lithium battery for Northvolt. Shanghai PTL is about to land in Sweden and start cooperation with Northvolt too. At present, economic and trade relations between our two countries are generally stable. China remains Sweden's largest trading partner in Asia, and Sweden is still China's largest trading partner in the Nordic region. Mutually beneficial cooperation between China and Sweden is not a risk, but a guarantee for the stability of bilateral relations and an opportunity for the future.

China and Sweden share similar ideas in green and sustainable development, and complement each others' industrial advantages. We both attach great importance to scientific and technological innovation and sustainable development. We have broad space for cooperation in the fields of technological application, green and low carbon development. Thus, I would like to make a few suggestions on  strengthening  bilateral cooperation.

First, jointly practice green and sustainable development. At the China-France-EU trilateral leaders' meeting on May 6, President Xi Jinping pointed out that China and EU have extensive common interests and broad space for cooperation in green and digital transition. European Commission President Ursula von der Leyen commended China for its efforts and progress made in green transition and development, acknowledged China's legitimate right to develop, and wished to continue candid dialogue with China and strengthen the cooperation between China and the EU. On the basis of maintaining traditional trade and cooperation, China and Sweden should make the best use of their resources and technological advantages to strengthen the division of labor and cooperation in global green industries, actively lead the reshaping of the global green value chain, give full play to the complementary advantages in areas such as green, low-carbon and environmental protection, strengthen synergy and jointly promote the realization of our respective carbon reduction goals to contribute to global green transition and sustainable development.

Second, jointly benefit from scientific and technological innovation cooperation. China is currently upgrading its industry, and vigorously developing new quality productive forces with innovation as the core driving force. There is great potential to be tapped in areas such as new materials, innovative medicines, bio-manufacturing, AI and big data. What China needs is just what Swedish enterprises can provide, and both sides can benefit from such cooperation. We hope that Swedish high-tech enterprises, especially small and medium-sized enterprises could better participate in China's innovation-driven development strategy, display their strength in China, and harvest their own success in China's high quality development process.

Third, jointly share the pie of development and interests. As the economy develops, the structure of people's demand keeps changing, and multi-tiered and diversified demand keeps emerging. I hope that enterprises from both sides could pay close attention to the shifts of the market demand, and continuously produce  marketable  and differentiated products. In order to accelerate the implementation of the United Nation's 2030 Agenda for Sustainable Development, China upgraded the South-South Cooperation Assistance Fund to the Global Development and South-South Cooperation Fund, and established Global Development Project Pool and Capital Pool. Recently the Swedish government also released a new strategy-Development Assistance for a New Era. The two sides should encourage and support enterprises to play an active role, work together to explore third markets, make the pie of shared interests bigger, and achieve mutual benefits and win-win results.

Fourth, jointly promote economic and trade personnel exchanges. Maintaining strong personnel exchanges is conducive to strengthening ties between our two countries and provide more opportunities for future cooperation. China has established a number of opening-up platforms which are the first ones in the world, such as China International Import Expo, China International Supply Chain Expo, and China International Fair for Trade in Services. Sweden also has many distinctive exchange platforms. I hope that Chinese and Swedish enterprises and chambers of commerce can make full use of these platforms to have more exchanges and communication, enhance friendship, deepen cooperation, and bring more benefits to our two peoples. Chinese embassy in Sweden is willing to provide assistance within our capacity for mutual group visits, field inspection and business networking between the two sides.

Finally, I would like to take this opportunity to express my gratitude to our old and new friends present, for your efforts in promoting better development of China-Sweden economic and trade relations. I hope we will further strengthen exchanges and cooperation, continuously enhance popular support and public opinion for growing China-Sweden relations, grow respectively in market competition,  achieve  common development by cooperating in various fields, foster a partnership on industrial and supply chains featuring stability and mutual trust, and create a better future for China-Sweden economic and trade cooperation.