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| While assisting the Minister in guiding the overall work of MOFCOM, Mr.Yu's portfolio also covers the Department of General Economic Affairs, Department of European Affairs, Department of Foreign Affairs, MOFCOM Party Committee, Department of Retired Cadres’ Affairs, China Foreign Trade Center and China-Europe Association
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| Speech of Vice Minister Yu Guangzhou at the Electromechanical Workshop under the China-Russia Business Summit Forum |
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It is my great pleasure to co-chair the Electromechanical Workshop together with Mr. Savelyev, Vice Minister of the Ministry of Economic Development and Trade of Russia. First of all, on behalf of the Chinese sponsor—the Ministry of Commerce of China (MOFCOM), I would like to extend my warm welcome and sincere greetings to all delegates from China and Russia.
In recent years, Sino-Russia trade and economic cooperation showed a good momentum of rapid development. Since 1999, the bilateral trade has been increasing for 7 consecutive years with an annual growth rate of over 30%. The bilateral trade in 2005 amounted to a historical high of US$29.1 billion, and is expected to set a new record this year.
Certainly, while the size is trade is quickly expanding, we also take note of the outstanding problem with respect to the structure of trade. In 2005, electromechanical product trade was only 12% of the total bilateral trade. Although China’s export of machinery and electronic products to Russia grew, the main part was electronic home appliance and other consumer products with low added value. Russia’s export to China of electromechanical products slowed down in recent years, which accounted for only 2.2% of its total export to China in 2005. The above-mentioned situation is not compatible with the manufacturing capacity as well as the scientific and technological strength of the two countries. If it remained unredressed for a long time, it will definitely hinder the improvement of the level and quality of bilateral trade, and moreover, damage the long-term steady development of bilateral economic and trade cooperation.
At the plenary meeting this morning, both heads of states of China and Russia expressed their serious concern about the improvement of trade structure in their speeches. Chinese President Hu Jintao particularly pointed out that while expanding the scale of bilateral trade, we should attach more importance to improving the trade structure, enlarging the share of electromechanical products. This is the direction for the future development of China-Russia trade, which is also an essential approach to realize the transformation of the growth mode of bilateral trade, and is very important to ensure that bilateral trade will reach US$60 to US$80 billion in 2010. Recently, China and Russia have taken a series of effective measures, including holding exhibitions of and symposiums on electromechanical products, and MOFCOM and the Ministry of Economic Development and Trade of Russia are drafting annual programs for the promotion of electromechanical product trade. The Electromechanical Workshop organized as a working group of the China-Russia Business Summit Forum aims to further highlight the significance of the cooperation in the electromechanical product trade, and encourage enhanced cooperation among businesses of the two countries. It also demonstrates the determination of the two governments in improving the trade structure, and level of cooperation.
China and Russia have great potential in the area of electromechanical products. Russia boasts strong machinery manufacturing basis and scientific and technological capability. In such areas as aerospace, aviation, nuclear energy, power equipment and mining machine, Russia has clear advantages. In the past years, China imported a lot of Russian power station equipment, general machinery, transportation vehicles and other electronic equipments, many of which played important roles in the development of relevant industries in China. With a big market, China made an import of US$660 billion in 2005, among which the import of electromechanically products was US$350 billion, up by 16% compared with the previous yea, representing 53% of China’s total imports. With the steady growth of the Chinese economy, it is predicted that import in 2010 will hit US$1 trillion, representing a large market for technologies and equipment of various countries including Russia. As President Hu Jintao pointed out at the opening ceremony, so long as Russian companies give full play to their advantages, they can surely win a place in the Chinese market with their competitive products and technologies.
In recent years, the Chinese manufacturing industry has been developing rapidly with rich research results on major equipments, and ever-improving innovation capability. Electromechanical products have been China’s biggest export category for 10 years in a row. In 2005, the export volume was US$426.8 billion, accounting for 56% of the country’s total export. Recently Chinese companies in areas like communication, home appliances, electronics, shipbuilding and automobiles have been actively exploring the Russian market, and made certain progress. We have reasons to believe, while the mutual understanding is deepening, the cooperation channels are widening, and the companies are more active in adapting themselves to the changing market, presenting suitable and competitive goods and technologies, we can definitely transform the advantages we have in cooperation into tangible result, that is, electromechanical product becomes a new highlight in bilateral trade.
In order to further promote the bilateral trade in electromechanical products, I would like to put forward the following suggestions.
1, Vigorously launching cooperation in big projects of electromechanical products.
At this moment, some large-scale economic and technical cooperation projects between China and Russia have been successively completed or are close to end up. I hope companies of both countries can consolidate their linkages to explore more cooperation opportunities focusing on such areas as power, nuclear energy, aviation, machinery, communication, home appliance, electronics, shipbuilding and automobiles so that more big influential projects can be finalized. In addition, companies will be encouraged to take part in public tendering of major procurement projects in order to help them obtain their due market share with good quality products and creditability.
2, Promoting trade in electromechanical products by expanding investment cooperation.
Investment is an important way to push forward trade growth. Taking China as an example, foreign-invested enterprises take over 75% of China’s total import of electromechanical products, which fully indicates that enhanced investment cooperation can effectively promote the growth of bilateral trade in electromechanical products. However cross investment between China and Russia is still small in scale, which is obviously not strong enough to drive up bilateral electromechanical product trade. I hope the two sides can make more efforts in this respect, encouraging companies to make investment in each other country by means of capital, equipment, technology, etc in order to push forward the development of trade in electromechanical products.
3, Strengthening the publicity and promotion of electromechanical products. .
The lack of understanding between Chinese and Russian enterprises is a major constraint to the development of bilateral trade in electromechanical products. Therefore, it will be helpful for the two countries to hold special trade fairs, exhibitions or match-making conferences. The China-Russia Economic and Trade Cooperation website co-sponsored by MOFCOM and the Ministry of Economic Development and Trade of Russia should also be fully utilized to recommend renowned brands of key companies with a view to promoting the cooperation in this area. Under the framework of Russia Year, Russia National Exhibition will be organized in Beijing, where we hope the Russian side can prioritize on displaying Russian electromechanical products and new technologies so as to take it as a platform to increase the promotion efforts in the Chinese market. MOFCOM will give active support to the Exhibition.
4, Intensified support from government departments.
To develop electromechanical product trade requires not only the mutual efforts of Chinese and Russian enterprises, but also efforts of the two governments in improving the trade and investment environment as a way to grant greater support. The two governments should help resolve the practical problems of the businesses in the aspects of policy, capital and cooperation channel. Export credit and other financing support should also be made available to the companies. Currently MOFCOM and the Ministry of Economic Development and Trade are drafting the 2006-2007 annual program for promoting the electromechanically product trade. Moreover, a inter-governmental consultation mechanism between China and Russia has been set up, which can also help companies of the two countries to timely settle problems arisen in the process of cooperation.
It is a long-term and arduous task to expand the trade in electromechanical products, and to improve the trade structure, which needs better cooperation from both sides. I am very delighted to have such a great number of electromechanical product manufacturing and trade companies, financial institutions as well as government officials to come to this Workshop. I hope this platform can be fully utilized to increase publicity, explore cooperation opportunities, and to make proposals in order to reach the common goal of promoting the bilateral trade in electromechanical products. I sincerely hope today’s event can lay a good foundation for the future cooperation between the two sides.
To conclude, I wish the Workshop a great success!
(Source: Network Center of MOFCOM)
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