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Uphold Good-Neighborliness for Common Development -Remarks by Ambassador Liu Zhenmin at Caixin Media Breakfast Session

Madame Hu Shuli,

Dear friends, Ladies and Gentlemen:

Good morning. Let me start by expressing my thanks to Caixin Media for hosting this breakfast session.

To be frank, the theme of the session, “China and its neighbors”, is not a hot issue in Davos as compared to global issues such as the international financial crisis, the European debt crisis, nuclear proliferation or climate change. Your generous presence today has demonstrated your great interest in China and its relations with neighbors.

I would like to take this opportunity to share with you, very briefly, my views on three points: (1) situation in the neighboring region of China, (2) China’s determination for good neighborliness, and (3) challenges for China in the region.

I. Situation in neighboring region of China

As we look around the globe, the world today is still far from being tranquil. The international financial crisis continues to ferment and the global recovery gives no reason for optimism. Armed conflicts, nuclear proliferation, terrorism, drug trafficking, transnational crimes, energy and food security, climate change, natural disasters and other global issues continue to pose growing challenges for all governments and international agencies alike.

Against this backdrop and compared with other regions in the world, the situation in the neighboring region of China is not bad on the whole. This could be reflected in three aspects. First, the region generally enjoys political and social tranquility, with countries like Russia, the Republic of Korea, Japan, DPRK and Mongolia witnessed stable power transfers or successions. Second, the region maintains robust economic growth, with an estimated growth rate two percentage higher than the global average last year and attracts world-wide attention. Third, cooperation still predominates in the region, with overall peace and stability maintained and disputes under control.

At the same time, the neighboring region of China is undergoing profound and complex changes, which added new complicating elements to the challenges China is now facing. It is frank to say that there is no other big country across the world facing such a complex surrounding situation as China does. This complexity could be summarized in four aspects.

The first is the big number of neighbors. China shares 22,000 kilometers of land boundary with 14 neighboring countries, in addition to a continental coastline of 18,000 kilometers with 8 neighbors, either adjacent or opposite at sea.

The second is the diversity of neighbors. In terms of territory, we have big neighbors like Russia and India as well as small ones such as Nepal and Bhutan. In terms of development level, our neighbors include developed countries like Japan, rapidly growing developing countries and the least developed countries (LCDs). In terms of political system, there are socialist countries, capitalist countries and monarchies. In terms of religion and culture, this region accommodates Taoism, Buddhism, Shinto, Hinduism, Islam, Catholicism and Christianity.

The third is the complex grievances among neighbors. There exist among the relevant regional countries both prolonged territorial, ethnic, religious and other historical feuds, and disputes over maritime rights and interests. North East Asia is the only region in the world today with cold war legacy, with the situation on the Korean peninsula constantly straining regional security. In recent years, East Asia and the Asia-Pacific region has become the place where major powers interact most intensively and their interests most intertwined.

The fourth is the vast development challenges for the region. On the one hand, many countries in the region are in the period of political transformation, economic transition and social restructuring. Various problems are intertwined and so complicated that it may lead to social instability. On the other hand, countries in the region face increasingly acute common new challenges such as terrorism, transnational crimes, natural disasters and infectious diseases.

II. China's determination for good neighborliness

As a saying goes, you can choose your friends, but not neighbors. From the Opium War in 1840 to the end of the Second World War in 1945, China suffered from repeated invasions, exploitations, cessions and bullying by both western powers and some of its neighboring countries. After the founding of the People’s Republic of China in 1949, the western powers are gone, but our neighbors remained the same. It naturally became our sincere hope and the primary goal to strive for a peaceful and friendly surrounding environment. Over the years, China has always pursued with the policy of promoting friendship and partnership with its neighbors and has made remarkable achievements. This has been manifested in five aspects:

Firstly, being committed to a harmonious neighborhood, China has been an active player in promoting mutual political trust in the region. In 1954, China, India and Myanmar jointly initiated the Five Principles of Peaceful Coexistence, which are still the basic principles of China's foreign policy today. When PRC was founded in 1949, there was no piece of settled land boundary with any neighbor. Over the past 63 years, Chinese government has settled land boundary issues with 12 neighbors through negotiations. Negotiations with India and Bhutan on boundary issues are also underway.

Secondly, being committed to a stable neighborhood, China has been a firm upholder for regional peace and security. We stay committed to the road of Peaceful Development, promoting the new security concept of “mutual trust, mutual benefit, equality and coordination”. With regard to regional hotspots, China has played a positive role of promoting reconciliation and facilitating talks. In the 1990s, China made great contribution to the peaceful resolution of the Cambodian issue. Since the beginning of this century, China has played an important role of maintaining peace and stability in the Korea Peninsular by actively promoting the establishment of the six-party talks on the DPRK nuclear issue. The peaceful reconstruction of Afghanistan is closely related to the security of China’s northwest borders. China has consistently provided support and necessary assistance in this regard. Furthermore, China has actively participated in the regional security dialogue and cooperation, covering areas ranging from defense, disaster relief, prevention and control of infectious diseases, to counter-terrorism, peacekeeping, maintaining the safety of sea lanes and combating transnational crimes.

Thirdly, being committed to a prosperous neighborhood, China has been an important contributor to common development of the region. Over the past 10 years, China’s trade with its neighbors registered a six-fold increase, growing from 170 billion to over one trillion US dollars. Today, one third of China’s foreign trade, half of its overseas labor contract, and two thirds of its outbound investment is with its neighbors. China is now the No.1 trade partner, largest export market and investor for most of its neighbors. According to statistics, China’s contribution to Asian economy exceeds 50%.

Fourthly, being committed to a cooperative neighborhood, China has been a strong promoter of regional cooperation. With concerted efforts over the past 20 years, China along with 10 ASEAN countries has set up the FTA covering 1.9 billion people. The Shanghai Cooperation Organization has developed into an important platform among China, Russia and central Asian countries in safeguarding regional security and stability, and promoting economic development since its establishment 11 years ago,. For years, China has consistently strived to promote regional cooperation, making great contribution to the cooperation within the framework of “10+1”, “10+3”, cooperation among China, Japan and ROK, as well as cooperation in the East Asia Summit. Late last year, the negotiations for the establishment of Regional Comprehensive Economic Partnership (RCEP) and a FTA covering China, Japan and the ROK started in parallel. The RCEP extends to 16 neighboring countries, with ASEAN, China, Japan, ROK, India, Australia and New Zealand included.

Fifth, being committed to promoting cultural and people-to-people contacts in the region, China has been an active participant in exchanges with neighboring countries. China believes that close people-to-people exchanges could create solid foundation for good neighborly relations. There are thriving interactions at the people-to-people level between China and its North East, South East and South Asian neighbors, reaching nearly 30 million people last year. Taking the Republic of Korea for an example, nearly 7 million people traveled between the two countries every year with 20,000 people travelling on 120 flights daily. Last year, Asian students in China exceeded 170,000, accounting for three fourths of all overseas students in China.

III. Challenges for China in the region

Ladies and Gentlemen,

When we talk about China and its neighbors, I know issues such as South China Sea, Diaoyu Dao and China-US interaction in Asia-Pacific are very much on your mind. These issues are really challenges for China, which have definitely complicated China’s relations with its neighbors, but will not affect China’s determination to develop good-neighborliness. Now I would like to say a few words on these issues.

First, the issue of South China Sea. This issue is a matter between China and some of its neighbors. It has also been connected with the emergence of the new order of the Law of the Sea in the 1970s. On this matter, China has been committed to safeguarding peace and stability as well as freedom of navigation in the South China Sea. On the disputes of sovereignty over some islands and reefs and differences of maritime boundary delimitation, China has consistently championed proper resolution through negotiations by countries directly concerned. Pending resolution, parties should commit themselves to maintain stability in the South China Sea.

In 2002, China and ASEAN countries signed the Declaration on the Conduct of Parties in the South China Sea (DOC), committing themselves to resolving the disputes peacefully and safeguarding regional peace. In July 2011, China and ASEAN countries reached agreement on the guidelines for the implementation of the DOC, and started pragmatic cooperation under the DOC framework. During the China- ASEAN summit held last December, leaders from China and ASEAN countries conducted fruitful discussions on enhancing further cooperation.

Objectively speaking, as one of the most important sea lanes, the freedom of navigation of the South China Sea is fully guaranteed and has benefited all trading partners including China, Japan, ROK and ASEAN countries. Today, it is critical that all parties concerned should abide by the spirit of the DOC in real earnest, and refrain from taking actions that may complicate or escalate the disputes and undermine regional peace and stability. China believes that negotiations are the only way for parties concerned to resolve their disputes. In this regard, the proposal put forward by Mr. Deng Xiaoping of shelving differences and conducting joint development may still well be a practical approach to tackle the difficult issues. China also believes that the issue of South China Sea will not affect the increasing cooperation between China and ASEAN countries.

Second, the issue of Diaoyu Dao. This is an issue between China and Japan left over from history. Diaoyu Dao and its affiliated islands have been an inherent part of Chinese territory in historical, geographic and legal terms. The dispute between China and Japan over the Diaoyu Dao has been existing since 1895. This can not be denied. In 1895, Japan stole these islands by taking advantage of the Japan-China War. But the results of the Second World War laid the legal basis for the return of Diaoyu Dao islands to China. In the negotiations of normalization of relations between the two countries in 1972 and the Sino-Japanese Treaty of Peace and Friendship in 1978, leaders of both countries, proceeding from the overall interests of bilateral relations, agreed not to raise the Diaoyu Dao issue for the time being and leave it to solution in the future. The above consensus has played an important role in the development of China-Japan relations over the past 40 years.

The Chinese government has all along attached great importance to resolving the Diaoyu Dao issue through negotiations. However, in September last year, the Japanese government, by taking actions of "purchasing" and “nationalization” of the Diaoyu Dao islands, has seriously encroached upon China's sovereignty. Such action is also an outright denial of the outcomes of the victory of the world anti-fascist war and poses a grave challenge to the post-war international order and the purposes and principles of the Charter of the United Nations.

The current serious difficulties in China-Japan relations were solely caused by the Japanese side, which has made very negative impact on regional cooperation in East Asia. China remains committed to developing friendly relations with Japan. Japan needs to reciprocate positively. It is important for Japan itself to learn to live together in peace with all its neighbors. We hope that the new Japanese government will face up to history and reality, make the right decision and take concrete measures to overcome the difficulties in its relations with China and bring the relations back on track of normal development.

Third, the interactions between China and US in Asia-Pacific. Many people keep a close eye on this issue. China and the United States, one as the world's largest developing country and the other as the biggest developed country, are also the two largest economies in the world. That makes their relationship one of the most important yet complex in the world. Their cooperation has increasingly important influence not only on bilateral relations, but also on regional stability and resolution of global issues at large.

Looking back in history, it is obvious that China-US cooperation and the flourishing of the Asia Pacific go hand in hand. One of the most valuable lessons we should draw is that both sides should have an open mind, respect the legitimate regional interests of each other, and embrace constructive contribution from any party.

China respects the legitimate interests of the United States in the region and welcomes its constructive role. Likewise, the United States needs to respect China's interests and concerns in the region. The two sides need to increase candid discussions on issues concerning situation in the region and their respective Asia-Pacific policies so as to boost mutual understanding, expand common ground, increase mutual trust, and appropriately handle and manage differences.

As far as the differences and frictions between countries in the region are concerned, we hope the United States will take an objective and impartial position by avoiding taking side with one party or doing things that are of disservice to settling the issue. It is of our belief that the Asia-Pacific region should not be an arena for China-US competition or confrontation. Instead, the region should be a trial field for a new type of major-country relationship and a grand stage for China-US cooperation.

Ladies and Gentlemen:

Reviewing the past, we could say that the friendship and mutually beneficial cooperation between China and its neighbors have brought real benefits to all countries in the region. It has also given a strong boost to peace, development and cooperation in the region and the world at large.

Looking into the future, we can tell that China cannot develop in isolation from its neighbors, nor can the neighbors develop without China. China will follow the guidelines of the Eighteenth Congress of the CPC, continue to promote friendship and partnership with our neighbors and strengthen good-neighborly relations and cooperation with them. We will act to ensure that China's development will bring more benefits to neighboring countries. China is determined to be the good neighbor, good friend and good partner of the neighboring countries.

Ladies and Gentlemen,

As the Chinese Lunar New Year is approaching, I would like to take this opportunity to wish you all good health, good luck, success in your work and happiness in your family.

Thank you very much.

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