Consul General Mme. LU Xu's Keynote Speach at the
"Life in the PRC Today" Video Conference
（November 25, 2021）
Good afternoon, everyone!
It is my great honor to be invited to speak today. Thank you Barry for the invitation. My special thanks go to the host of the event and everybody participating. It is you who have always been bringing about healthy ingredients into the China-Canada relations, both in good times and bad times.
Some of you have long been committed to the friendly relationship between China and Canada, especially on the economic and trade front, and also to the understanding and communication between the two peoples. Some of you may want to know where China-Canada relations will head for. Some of you may even question whether China's huge market will remain an opportunity. What I am going to say today is after 3 years of stagnation, it is time for China and Canada to move forward instead of looking back.
My presentation consists of four questions and their answers.
I.Is China safe or not?
Before answering this question, I would like to raise another question first. What are the most prominent China-related keywords in Canadian public opinion in 2021? I bet "arbitrary detention" and "coercive diplomacy" would be on the top of the list. In these narratives, China was portrayed as an evil land from which there is no return if you go, or worse yet, many many people fell for such narratives.
In our view, the question if China is safe or not sounds like we were asking somebody just finishing a big meal if he is hungry or not. Because in fact all foreign companies and law-abiding citizens following Chinese law are very well protected, otherwise there won’t be hundreds of thousands of successful business stories coming out. For example, the American Chamber of Commerce in Shanghai recently released the 2021 China Business Environment Survey Report, saying that 77.1% of the surveyed businesses were profitable in 2020, outperforming market expectations; while 82.8% expected revenue growth in 2021; 77.9% of the respondents were optimistic about their business prospects in China in the next five years; 59.5% expressed plans to increase investment in China; 63.7% intended to hire more staff in China. A large number of companies regard China as the primary destination for investment. If China was not safe and always conducted "arbitrary detention" and "coercive diplomacy" at will, how could these companies decide to continue their operation there with such positive feedback? The report was all about the year of 2020 when China-America relations were intense. Nevertheless, American companies still made good profits in China. Similarly, despite the chill in China-Canada relations over the past 3 three years, Canada Goose's net sales in Asia grew 107.5% year-on-year in the fiscal year of 2019/2020, with the Chinese market contributing most of the share. Entering the Chinese market in early 2019, Tim Horton now runs over 150 stores in 10 cities with a goal to hit 1,500 stores in China to compete with Starbucks.
In the Doing Business Report 2020 released in October by the World Bank, China jumped to 31st place in the global ranking in terms of the business environment, which was 15-places higher than last year and a good news for both big and small businesses. China was among the 10 economies with the greatest business environment improvement for the second consecutive year. The significant improvement of the ranking is the vote of confidence given to China by the world authorities.
According to statistics from China's Ministry of Commerce, 18,497 new foreign-funded businesses were established across China from January to May 2021, an increase of 48.6% year-on-year and 12.4% over the same period in 2019. This means averagely more than 120 new businesses are opened per day. These numbers are the best answer to the safety question.
II.How can Canadian small and medium-sized enterprises invest in or trade with China? How can they get started while COVID-19 is still around?
In 2020, Canadian goods exports fell by 11.8% year-on-year while its exports to China increased by 8.1% year-on-year. This fully demonstrated the highly complementary nature of the Chinese and Canadian economies and the great potential to export to China for Canadian companies.
During the virtual meeting between President Joe Biden and President Xi Jinping on Nov. 15th, President XI said that Opening-Up is a fundamental state policy of China, and China's determination to expand its high-level opening will not change, nor will its decision to share development opportunities with the rest of the world, nor will its resolution to make economic globalization more open, inclusive, and balanced for the benefits of all. China is to form a domestic and international dual circulation on a wider and larger scale, and to improve the market-based business environment that respects the rule of law. This will translate into a larger market and more opportunities for all countries.
For companies looking to invest in China, China is attractive not only because of its optimized business environment, but also the exclusive incentives for foreign-funded business clearly set out by the Chinese Government, concerning tax, land, region, investment, fees, and services, etc. The new Foreign Investment Law taking effect in 2020 legally defined the rights of foreign-invested enterprises to enjoy tax and fee exemptions and more.
Some may wonder how to overcome the COVID-19 for economic and trade interactions with China?
I have some recommendations.
1. Sign up for large-scale trade shows.
Some annual shows are well known, for example, China International Import Expo(CIIE), China Import and Export Fair(Canton Fair), China International Fair for Investment & Trade(CIFIT). These are perfect platforms for Canadian businesses to promote themselves and to find their Chinese partners. With a population of over 1.4 billion and the largest middle-income group in the world, China has an immense market size and huge potential for any products consumption. My office is glad to assist companies that wish to go. In case of the COVID risks, we are pleased to offer the online trade show options. For example, in recently held China International Import Expo, a virtual trade fair was kick off on the second day. With live streaming to audiences across the country, the 4-hour event was so successful that more than 110 million viewers mainly Chinese were attracted and over 120, 000 cans of Afghan pine nuts, coffee beans and cheese from Serbia were sold out.
2. Try E-commerce.
E-commerce is a booming industry in China, with 782 million online shoppers in 2020 and twice the size of the United States in terms of market scale. To my knowledge, there are 2 major Chinese online retailers allowing foreign companies to easily sell their goods to the Chinese customers without applying for a Chinese business license. They are Tmall International by Alibaba and JD Worldwide by Jingdong. Cross-border E-commerce is a low-risk access to the Chinese market.
3. Look into Bonded Zones. China has set up Bonded Zones at some ports of entry, where Canadian businesses are welcome to carry out trade activities and enjoy preferential policies.
III. What does the Chinese market need and what do the Chinese people crave?
There was a drastic change in customer demand among the Chinese population in recent years. With the rising of 400 million middle class, the demand has shifted from the low end to the middle and high end, which can be met by increasing either domestic production or imports from the international market.
China will continue to provide a large and stable market for Canadian products in energy and minerals, agriculture and forestry, and science and technology. Great collaborative opportunities are available in areas where China-Canada economies are complementary, such as information and communications, novel energy, and environmental protection as well as high quality agricultural products, seafood, IT products, cultural and creative products, financial services, education, and tourism. Beside, healthcare, retirement homes, leisure industries are well-positioned for the next boom. The developing inland regions of China are also drawing the world's attention. Canadian companies are welcome to participate in the development and opening-up of China's inland provinces.
IV. What does China really look like today?
In short, the people of China are happier than they have ever been in history since we have historically eliminated absolute poverty; they are prouder than ever as they witnessed their country accomplish in just 70 years what the United States has done in 190 years. China also survived several recent major global crises including COVID-19. What could make the Chinese happier and prouder than that?
China's irreplaceable ruling party deserves all credit. Two weeks ago, the Communist Party of China held the Sixth Plenary Session of the 19th Central Committee. Key achievements made and historical lessons learned while the Party led the Chinese people through hard work in the past 100 years since its founding were comprehensively summarized at the conference. China's successful sailing was primarily powered by the Chinese people's aspiration for a better life. The Party served as the captain steadfastly holding the steering wheel in this journey.
I often came across discussions on China's political system among Canadians. Unfortunately, most of these opinions were far from the reality in China. The fundamental reason for such misinterpretation was that most people relied on Western historical experience and Western social thinking to look at what happened in China. They refused to believe that there was any other way, system, or model in the world to achieve the thriving and prosperity without colonial occupation or capital expansion.
Differences and contradictions between countries are inevitable due to disparities in history, culture, and social systems. However, we believe it is entirely possible to achieve common development through dialogue and cooperation based on mutual respect and equality.
The economic and trade cooperation between China and Canada over the past 51 years has fully demonstrated that the multi-facet China-Canada collaboration based on complementary advantages and mutual benefits was a powerhouse to bring tangible welfare to the people of both countries. We welcome Canadian investors to set up your next venture in China. We hope that China and Canada should work together to safeguard the positive political setting that facilitates the quick restoration of bilateral collaboration.
Thank you!