CNN:

You just mentioned about contracts and agreements with a value of more than US$250 billion; however, many critics in the U.S. say these agreements have more symbolic than actual meaning, because many of them have no binding force. They think of them as China's gifts to President Trump so that he can be accountable to his American constituents. I wonder how you would respond to that interpretation, and could you explain how long it will take exactly for these agreements to demonstrate their paper value of US$250 billion? Are all these agreements newly reached, or were they signed before and just officially announced this time?

Zhu Guangyao:

Your question touches on the impact and the basis of commercial contracts. I think commercial contracts can only be reached when the supplier and the recipient both have the intention to fulfill their agreement; and, for intentional agreements, they can only be carried out after the two sides have undertaken sufficient and necessary study on their feasibility. Meanwhile, entrepreneurs of both sides involved were very smart and clever in this process. In terms of weighing up their interests, the two sides in the negotiations actually focused much on how to address their own interests and to meet the shared interests of both sides. Market rules and the dominance of companies are what China has been upholding throughout the contract negotiation, and so has the U.S. As a market economy, market rules must be upheld, and the dominance of companies is a fundamental principle. Without the real intention of the companies involved, it would be impossible to sign and implement big contracts like these.

Among the contracts signed yesterday, the biggest was a strategic cooperation framework agreement between China's National Energy Investment Group Ltd. and the State of West Virginia for a demonstration project with regard to complete industrial chain development of shale gas. It is an intentional agreement as our CNN friend has mentioned just now, but I can make it clear that, as we have heard from a Chinese company, namely the original Shenhua Group, they have made substantial preparations for the investment in West Virginia, including the input of funds. So, although the contract is a statement of intent, it carries high commercial feasibility considering the substantial preparations and prior-period input. A big contract like this really requires the efforts of both sides, which cover studying the market environment: how to create a more favorable environment for the companies. We think this project is indeed a very big one, with a value of more than US$80 billion, so it will take a long time to fully execute; however I value its impact more on the healthy development of China-U.S. economic relations, because President Xi has reiterated that China-U.S. economic relations are the anchor and driving engine for the overall China-U.S. relationship, and President Trump has also made clear that he is very keen on cooperation in big projects. I think the cooperation on such a large project is rare in the histories of China and the U.S. and even in the world history. We sincerely hope that it will become one of the greatest driving forces to ensure the healthy development of China-U.S. economic relations. Of course, the two sides should benefit from the cooperation in the first place. West Virginia wants to improve its employment and investment situation, and China also hopes to benefit from its involvement in the full industrial chain development of shale gas deposits in the U.S.

Meanwhile, I would like to emphasize that, in terms of policy appeals, sometimes it is China that makes the proposal, but eventually it comes down to the two sides reaching an agreement. The long-term contract of liquefied natural gas (LNG) is a good example. In the preliminary outcomes of the 100-day plan concerning the China-U.S. economic cooperation, China has a very clear policy appeal that the U.S. should allow LNG exports, and should allow China and U.S. companies to sign long-term contracts in this regard. Frankly speaking, China had been putting forward this request for a number of years; however, the U.S. did not lift restrictions on LNG exports to China for a variety of reasons, domestic legislation in particular. The preliminary outcome of the 100-day plan had realized LNG exports to China, and the U.S. had begun studying the signing of long-term supply contracts. Now, months later, the appeals of the U.S. have become stronger, hoping to sign a more fixed, long-term and big supply contract, so we can see that the changing process in the appeals of both sides is also a process whereby the economic interests of China and the U.S are closely linked and integrated. I hope very much that the CNN reporter will report this to the U.S. audience. Thank you.

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