— Speech by Li Keqiang, Vice Premier of the State Council of the People's Republic of China, at the Opening Plenary of the Boao Forum for Asia Annual Conference 2012

(Boao, China, April 2, 2012)

It is my great pleasure to join friends from all over the world at the Boao Forum for Asia Annual Conference 2012. A little over 10 years ago, this place was a small fishing village little known to the outside world. Today, it has become a major platform for people to compare notes on issues important to Asia's development. Boao has grown fast through the opening up and development of Asia and China. The opening up and changes of Boao are a good example of how deeply connected China and Asia as well as Asia and the world have become. This gathering gives all of us a good opportunity to look at our world and learn from each other. It is an open and inclusive platform, based in Asia yet with a global perspective. This year's theme, "Asia in the changing world: Moving toward sound and sustainable development" is a highly relevant one. On behalf of the Chinese Government, I would like to extend our warmest congratulations on the opening of the conference and our sincere welcome to all the participants coming from afar.

As the world sets its eyes on Asia, Asia is also looking at the world. Right now, profound and complex adjustment and changes are taking place around the globe. Although the world economy has shown signs of recovery and growth outlook in some countries gives reasons for optimism, the underlying impacts of the international financial crisis are still with us. The sovereign debt crisis in Europe persists. Achieving a full global recovery will remain a long and arduous process. At the same time, worldwide economic restructuring is picking up speed, a new round of technological progress and industrial innovation is in the making, economic globalization and regional integration are moving forward despite twists and turns, adjustment in international political and economic order is going into greater depth and the emerging economies are playing even greater roles.

This forum came into being in the wake of the Asian financial crisis. In the past decade and more, Asian countries have acquired greater resilience in dealing with risks and endeavored to promote sound economic development through adjustment and reform. In the current international financial crisis, Asian economies have been the first to recover and displayed fairly solid fundamentals. Asia now accounts for over 30 percent of global GDP. Its contribution to global growth also surpasses 30 percent. This region hosts more emerging economies than any other part of the world, and its late-development advantages and development potential have become more evident.

Admittedly though, the overall level of development in many Asian countries is still quite low. There are significant development gaps between different Asian countries. Resource and environmental constraints are worsening. Regional security and stability face challenges. The road towards development will not be entirely smooth and there will be plenty of growing pains. Some countries and regions must still come to grips with such problems as economic slowdown, rising prices and mounting employment pressure, which call for serious attention.

We know that in Asia's development, opportunities and challenges and hopes and difficulties exist side by side. We also know that opportunities outweigh challenges and difficulties can be overcome. History recalls that Asia was the cradle of several proud civilizations and the region where splendor was created profusely. In modern times, Asia has gone through trials and tribulations and worked relentlessly for development. Today, Asia is at a new starting point. The resilient and enterprising people of Asia are working together to embrace a new rise, thus bringing themselves to the world, to a better future and to modernity. In this changing world, China is ready to work with other Asian countries to build consensus, meet challenges, overcome difficulties and jointly push forward Asia's sound and sustainable development.

First, we should promote internal drivers of growth. Here lies Asia's unique advantage in achieving sound and sustainable development. It is also the new trend in the open economic development in Asia. Asia is home to around 45 percent of the world's population. Most Asian countries are developing countries. Development is uneven both inside individual countries and among them, which gives a huge potential in their markets of domestic demand. Asia also has the world's largest labor force and the largest pool of engineers and scientific researchers, enjoying a remarkable edge in human resources. While continuing to unleash its comparative advantages in global competition, it is important for Asia to explore and expand markets of domestic demand, and while maintaining measured investment growth and increased factors input, Asia should fully tap the potential of consumer spending, technological upgrading and improvement of labor skills. In so doing, Asia's economy will be able to achieve robust, sustainable and balanced growth.

Second, we should stay open and inclusive. Here lies the necessary requirement for Asia's sound and sustainable development. The fast growth Asia has achieved in the past is due to its openness. Asia should stay open, both to the world and among its members. Practices of opening regional policies with mutual learning is crucial to the sustained development of Asia. Countries in Asia should enhance their mutual trust, draw on each other's strength, advocate inclusive growth, maintain communication and coordination on major international and regional issues, and get actively involved in addressing climate change, food, energy and resources security and other global challenges as well as adjustment and reform of the global governance structure and international financial system. At the same time, we welcome involvement of countries outside the region in Asia's development and a constructive role they play in this process, for this can help promote prosperity in Asia, facilitate deeper cooperation between the emerging and developed economies and contribute to peace, stability and development of the world. The fact that one third of the participants of the Annual Conference are from Europe and the United States also signals the increasing openness of Asia.

Third, we should go after mutual benefits and win-win results. Here lies the effective way for Asia's sound and sustainable development. In recent years, Asian countries have deepened their practical cooperation of various types through fruitful cooperation programs in Southeast Asia, Central Asia, Northeast Asia and South Asia. Intra-Asian trade has accounted for over half of Asian countries' total foreign trade, allowing them to reap handsome dividends for development. Under the new circumstances, Asian countries need to further enhance their consultation and cooperation, promote global trade liberalization and investment facilitation, oppose all forms of protectionism, upgrade the connectivity and networks of transport, communication and energy infrastructure, deepen regional and sub-regional cooperation, and work to promote common development between Asia and the rest of the world. Openness and cooperation benefits all and leads to win-win progress.

Fourth, we should advocate solidarity and harmony. Here lies the strong guarantee for Asia's sound and sustainable development. Given the Asian countries' differences in social systems and development models, and diversity in ethnic structure and cultural heritage, solidarity and mutual assistance in Asia is of particular importance. A peaceful, united and harmonious Asia requires that we continue working together like passengers traveling in the same boat and make concerted efforts to respond to the impact of financial crises and challenges of economic risks, mitigate major natural disasters and address development bottlenecks. We are also required to place greater importance on social equity and justice while pursuing economic development, give greater help to underdeveloped areas and distressed groups and ensure that people of all countries can share the fruits of development.

Fifth, we should stay committed to peaceful development. Here lies the vital cornerstone for Asia's sound and sustainable development. Asia's success in development is largely attributable to the overall peace and stability the region has enjoyed over the years. With ongoing economic globalization and the changing international system, Asia and all countries should and must achieve their growth and prosperity through peace and cooperation. Countries will have their fundamental and long-term interests served if they view their relations with each other from a strategic perspective, seek common ground while preserving differences and seek the maximum convergence of interests. As long as the parties concerned proceed from the larger picture of friendly relations among Asian countries and the development of Asia as a whole, respect history, and abide by the basic norms governing international relations, we will be able to solve our problems through dialogue, consultation and peaceful negotiation, be it issues left over from history or differences and disputes of the day. It will be a blessing for both Asia and the world.

As a member of the Asian family, China is closely interdependent with Asia economically. China that is committed to scientific development, which features comprehensive, coordinated and sustainable economic and social development, will contribute to sound and sustainable development in Asia. In recent years, China's economy has grown in line with macroeconomic management. The economic growth has been steady and fairly fast and people's lives have been improved. The fundamentals of China's economy are sound. The country has not changed its course of development and is capable of maintaining long-term, steady and fairly fast development.

This being said, we should be mindful that China remains the largest developing country in the world. There is a serious lack of balance, coordination and sustainability in its development, and some outstanding structural problems need to be addressed gradually. At present, we will seek progress while maintaining stability as we work to promote scientific development and move faster in changing the growth model. We will address the immediate needs by ensuring steady growth, controlling price level and promoting harmony while keeping an eye on the future by ensuring fresh progress in structural adjustment, improvement in people's livelihood, continued reforms and other areas with a view to promoting a comprehensive, coordinated and sustainable economic and social development in China.

A faster shift of the growth model holds the key to continued economic and social development in China. China's 12th Five-Year Plan calls for faster change of the growth model, which makes strategic adjustment of the country's economic structure a top priority. The primary task of the structural adjustment is to expand domestic demand, and the best way to do that lies in urbanization. China has a large population and vast areas. The country as a whole is in the middle of ongoing industrialization and urbanization. Last year, China's urbanization rate for the first time exceeded 50 percent. Each additional percentage point in this figure means more than 10 million rural residents becoming city dwellers, along with their enormous demand for consumption and investment. At the same time, upgrading industries and speeding up the development and raising the share of the service sector can provide a strong industrial support for larger domestic demand and more job opportunities. What is more, better food security, better protection of the ecosystem and development of a modern agriculture can lay a solid material foundation for larger domestic demand. In a word, continued industrialization, urbanization and agricultural modernization pushed in a balanced way is the necessary path for China's modernization. It is also a strategic move to ensure the shift of the growth model, structural adjustment and larger domestic demand. This move will help China maintain fairly rapid economic growth in the 12th Five-Year Plan period and beyond while improving the quality and cost-effectiveness of development.

Improved livelihood is the ultimate goal of continued economic and social development in China. The fundamental goal of our efforts to accelerate the transformation of the growth model and adjust structure is to ensure and improve people's livelihood. This would increase people's income, stimulate consumption and expand market demand. Our efforts to promote growth and our endeavor to improve people's lives reinforce each other. China is implementing such projects as employment support, social housing, full coverage of health care and other major programs of health care reform as well as large-scale poverty alleviation. These major projects are important to people's livelihood and China's development. Aimed at ensuring people's basic livelihood and raising the income of the low-income groups, these are also major measures to regulate income distribution. We will, with a view to raising the level and quality of people's lives, build a social safety net, promote equal access to basic public services and encourage the people to go for employment or to create jobs. We will raise people's income in tandem with economic growth and expand household consumption and domestic demand. Our purpose is to make steady progress in China's modernization drive and bring benefits to the entire population.

Reform and innovation provide the driving force for continued economic and social development in China. It is reform and opening up that has delivered the remarkable progress in China's development over the past 30-odd years and its significant strides forward in modernization in the 21st century. Faced with the profound changes in international and domestic landscapes, we must let reform and opening up continue to lead the way in removing the institutional obstacles that hamper the shift of the growth model. China has entered the critical stage of reform. We will deepen reform of the fiscal sector, taxation, finance, pricing, income distribution and enterprises, endeavor to make breakthroughs in the key areas and key links, better bring into play the fundamental role of the market mechanism in resource allocation and advance institutional, technological and management innovation in an all-round way and focus on increasing the internal driving force and dynamism of development. China's efforts to expand domestic demand are made in the context of continued opening up. Going forward, we will adopt an even more proactive opening-up strategy, attach equal importance to export and import, continue to welcome foreign investment while promoting investment overseas, increase import on a priority basis, promote balanced development of foreign trade and endeavor to raise the level of an open economy. China gives equal treatment to domestic and foreign-invested enterprises. China is dedicated to creating an open, transparent, fair, competitive and predictable marketplace and legal environment. China will step up intellectual property right protection and promote the common development of all types of enterprises through innovation and shift of the growth model.

China makes greater openness to Asia the strategic priority in its opening-up policy. China is now Asia's largest importer, the largest trading partner of many Asian economies and an important source of investment for Asia. China enjoys highly frequent exchanges in various fields with the rest of Asia. We are ready to work with relevant countries to improve such regional cooperation mechanisms as China-ASEAN (Association of Southeast Asian Nations) cooperation, the Shanghai Cooperation Organization, the China-Japan-ROK (Republic of Korea) cooperation, ASEAN Plus Three and APEC (Asia-Pacific Economic Cooperation), advance the building of bilateral and multilateral free trade areas and expand cooperation in emerging industries, infrastructure, finance, science and technology and other areas. We are ready to expand people-to-people exchanges, particularly youth and non-governmental exchanges, promote contacts and dialogues between different cultures and civilizations and enhance the friendship among peoples.

China will be unswerving in following the path of peaceful development. It will remain dedicated to the cultivation of a peaceful and harmonious international and neighboring environment and it will never seek hegemony. Going for peaceful development is a firm strategic decision China has made in light of its national conditions and cultural tradition, its fundamental and long-term interests as well as the prevailing trend and law of world development. China is committed to the policy of building good-neighborliness and friendship and will be a good neighbor and good partner of Asian countries forever. We will join you in promoting prosperity, development, harmony and progress in Asia and beyond.

We are confident that the vast continent of Asia will provide ample space for the development of all countries. Facing an ever-changing world, we the Asians are fully capable of seizing the opportunities, achieving Asia's sound and sustainable development and creating a better future for mankind!