Subic, the Philippines

25 November 1996

Your Excellency President Fidel V. Ramos,

Excellencies,

I am delighted to be here at scenic Subic for the APEC leadership gathering which I hope will give fresh impetus to economic cooperation in our region. I would like to express my heartfelt thanks to President Ramos for his kind invitation and to the Philippine Government for its thoughtful arrangements for our meeting.

The Asia-Pacific region has steadily raised its economic strength and scientific and technical level in recent years. Some developing members of the region, in particular, have maintained a momentum of rapid growth. However, the gains are rather uneven among member economies. Particularly, there is still a big gap in terms of economic level between the developing members and the developed ones.

Economic ties between countries are becoming closer and more extensive nowadays, which presents fresh opportunities as well as new challenges for Asia- Pacific economic development. In order to maintain a sustained economic growth, countries and areas in the Asia-Pacific region need to continue tapping their own potentials while reinforcing economic cooperation at the regional level.

Since the Bogor Meeting, APEC trade and investment liberalization has got off on track gradually and made some positive headway. One important contribution of the Osaka Meeting was to begin placing equal importance on economic and technical cooperation and trade and investment liberalization. Nevertheless, we are yet to work out a consensus on how to push forward economic and technical cooperation.

One opinion only emphasizes the importance of trade and investment liberalization, while allocating a subordinate role to economic and technical cooperation. I am afraid this opinion fails to consider all sides of the matter. In fact, without a fruitful economic and technical cooperation, trade and investment liberalization can not make much headway. In so far as developed members are concerned, market is essential to their continued growth as they must seek new outlets for their capital and merchandise. Such a market will be very limited if economies of the developing members remain stagnant. Economic and technical cooperation will facilitate the growth of developing members, thereby turning potential markets into real ones and widening the growth horizon of the developed members.

I would like to make a few observations in this regard.

---- The basic objective of economic and technical cooperation is to turn diversity into complementarity in the economic development of all members, so as to achieve common prosperity. Hence, we should step up cooperation in the technical field, facilitate the diffusion of technology and know-how, and promote the development and effective use of human and natural resources.

----In both principles and practices, APEC economic and technical cooperation is quite different from development aid in the traditional sense. This cooperation is reciprocal, based on equality, mutual benefit and complementarity. It calls for the rich helping the poor, but also requires all members to make their respective contribution within their means. It stresses the role of government, but also encourages involvement of business sector. It allows appropriate policy guidance, but also applies market mechanism. It opens not only to members but also to non-members. With such an approach, all participants will be able to do their very best.

---- In order to ensure an effective economic and technical cooperation, it is necessary to set a focus, namely, to define certain priority areas. There is a high degree of complementarity among APEC members in the realms of human resources development, science and technology, environmental protection and infrastructure. We should adopt effective measures to strengthen exchanges and cooperation in this regard.

Since its establishment, APEC has accumulated some experience in the course of practice and gradually come up with unique way of cooperation. This has come to be known as the "APEC approach''. It has such features as recognition of diversity; emphasis on flexibility, gradual progress and openness; adherence to mutual respect, equality, mutual benefit, consensus and voluntarity; and combination of individual and collective actions. Guided by the collectively-defined common objectives, APEC members are free to make their respective efforts in light of their own circumstances. These principles and practices take into account of differing development levels and resilience of partners in cooperation, and thus strike an optimum balance among their diverse interests and demands.

This approach should also be adhered to in APEC trade and liberalization. The issue of information technology addressed during this meeting is indeed very important. However, due to the differences among APEC members in terms of levels of economic development, it will be very difficult for them to liberalize the sector within the framework of one timetable. Adequate flexibility should be exercised in the area of product coverage. Moreover, promoting the flow of information technology is not merely a question of reducing tariffs, it also requires efforts to remove impediments to technology transfer.

APEC practice has shown that this approach is viable and effective. Since the Osaka Meeting, all members have submitted their IAPs on trade and investment liberalization. In the context of their respective development levels, many members, including China, have made tremendous efforts to promote regional cooperation and trade and investment liberalization. I have the pleasure to inform you that China has reduced its average import tariff rate from 35.9% to 23% in the current year, and will bring it further down to around 15% by year 2000. China will continue to support the ''APEC approach'', actively participate in Asia-Pacific economic cooperation and make its due contribution to the realization of our common objectives.

There is no precedence which APEC can follow since ours is a new type of economic cooperation. We should go forward, constantly enriching and supplementing our experience of cooperation, so as to blaze a new trail towards even closer Asia-Pacific economic cooperation. May I conclude my speech by quoting Chinese thinker and writer Lu Xun who said: ''For actually the earth had no road to begin with, but when many men pass one way, a road is made.''

Thank you.