Speech by Chinese Premier Wen Jiabao at the opening ceremony of the Hannover Messe 2012

(Hannover, Germany, April 22, 2012)

It gives me great pleasure to attend the Hannover Messe on the occasion of the 40th anniversary of China-Germany diplomatic relations. Known as the barometer of global industry, the Hannover Messe is the world’s largest and most influential comprehensive industrial fair. Twenty-five years ago, China became the partner country of Hannover Messe for the first time, which gave a strong boost to China’s trade, investment and technical exchanges and cooperation with other countries. This year, China has once again become the Hannover Messe’s partner country. As two of the most important manufacturing countries in the world, China and Germany are committed to working closely to promote dialogue and cooperation of the global industries, and this will surely play a more important role in advancing global industrial innovation and development. I wish to express warm congratulations on the opening of the Hannover Messe 2012 and wish this event a great success! I also express my heartfelt appreciation for the warm hospitality extended to us by Chancellor Angela Merkel and the German Government.

Since the founding of the People’s Republic of China, and especially since its reform and opening-up program started, China has achieved tremendous progress in industrialization. From 1978 to 2011, China’s GDP grew at an average annual rate of 9.9 percent, moving from the 10th place to the second in the world. We have established a complete industrial system. China leads the world in the output of about 220 out of more than 500 major industrial products. Its total export and import volume surged from $20.6 billion to $3.64 trillion in 2011, rising to the second place in the world from the 29th in 1978. All this shows that China has become a major manufacturing country. Rapid industrialization has greatly enhanced China’s overall national strength, significantly improved the lives of Chinese people and greatly bolstered China’s international standing and influence.

It has just taken China over 30 years to achieve what took developed countries 100 years to accomplish in industrialization. In this process, China has not only created enormous material wealth, but also gained important historical experience.

We should firmly carry out market-oriented reform. Reform is the unending source of power driving China’s economic development and social progress. What has made rapid industrialization in China possible is the country’s transformation from a highly centralized planned economy to a vital socialist market economy. The reform has energized Chinese companies and turned them into self-operating market participants responsible for their own profits and losses. The reform has also released immense potential in society. Several hundred million members of the rural labor force have found non-farming jobs and moved to cities. China’s urbanization rate, which was just 17.9 percent in 1978, reached 51.3 percent last year. By fully tapping the role of labor, capital, knowledge, technology and managerial expertise, China has created strong impetus for its industrialization process.

We should continue to open China to the world. To speed up China’s industrialization, it is important to fully participate in the international division of labor, exchange and competition, and to fully utilize both domestic and foreign markets and resources. Since its accession to the WTO, in particular, China has fully integrated itself into the world economy, thus accelerating its industrialization. By the end of 2011, foreign direct investment in China had totaled $1.16 trillion. Last year alone, China absorbed $116 billion in foreign direct investment. For 19 consecutive years, China led developing countries in attracting foreign investment. Foreign companies have brought advanced technical know-how and managerial expertise to China and become an important force driving China’s industrialization. Indeed, they have become an integral part of China’s economy. At the same time, more Chinese companies have entered the global market and are becoming a new force for promoting global economic growth.

We should promote scientific and technological innovation. We have closely followed the trend of the development of science and technology in the world and pursued innovation at home. We have developed a number of key technologies with independent intellectual property rights, which have greatly narrowed China’s technological gap with developed countries in the manufacturing sector. China gives high priority to education. There are now over 23 million students in Chinese universities and colleges, 27 times as many as in 1978, and they provide a huge pool of educated personnel for industrialization. In 2011, the number of authorized patents in China rose to the third place in the world, and the total value of China’s technology trading market reached 476 billion yuan ($75.4 billion). Science, technology and education are playing a major role in advancing leapfrog industrial development in China.

We should promote industrialization, urbanization and agricultural modernization in a coordinated way. For a big country like China with a population of over 1 billion, to ensure the domestic supply of grain and other major agricultural products is crucial to maintaining its stability and prosperity. Despite the drop of agriculture’s share in GDP and decrease in rural population, the fundamental role of agriculture in China’s economy will not change. We are committed to promoting the modernization of agriculture in the process of industrialization and urbanization. This has laid a solid foundation for ensuring steady and robust economic growth.

China is still in the process of industrialization. “Made in China” products are generally still at the medium and low rungs of the international industrial chain, and have a long way to go to catch up with the advanced level. China is confronted with major challenges and problems in industrialization, including an inefficient model of industrial development, lack of market competitiveness, weak capacity for scientific and technological innovation and low efficiency in the use of resources. We are keenly aware that to realize industrialization is still an arduous historic task China faces in its modernization drive. So we will continue to build an innovation-driven country, accelerate the shift of growth model and adjustment of economic structure, and work hard to achieve transition from “made in China” to “created by China.” We will ensure that the development of an information-based society and industrialization will reinforce each other and thus embark on a new path of industrialization based on the development of science and technology, with good economic returns, low resource consumption and less pollution, and which fully taps into our strength in human resources.

The international financial crisis has not ended, and the path to world economic recovery is full of potholes. While this crisis has dealt a heavy blow to global industrial development, it has also created new opportunities for it. To overcome the international financial crisis is an important mission for global industries.

We should vigorously grow the real economy. This is crucial for achieving the stable growth of the global economy. A major cause of the financial crisis is that the virtual economy in some developed countries has expanded excessively and become divorced from the real economy. And the lack of new growth areas in the real economy has hindered recovery of the world economy. China and Germany have taken the lead in fighting the crisis and realizing steady growth, because we have always given priority to growing the real economy and thus have a solid real economy as the foundation for growth. We should draw lessons from the international financial crisis, put more human resources as well as financial and material input into the real economy, foster an environment that can create more jobs and facilitate the growth of the real economy, and ensure strong, balanced and sustainable growth of the global economy.

We should work hard to promote scientific and technological innovation. This will create a powerful impetus for promoting world economic recovery. Historically, major economic crises were followed by new scientific and technological revolution, and economic recovery was not possible without technological innovation. The world is entering an age of intensive innovation and industrial revitalization never seen in history. Technological innovation in various sectors is flourishing, and new markets, new demand and new economic growth areas are emerging. Every country and every company should have a broad vision, closely follow the latest progress in science and technology and new demand created by economic and social development, and boost innovation-based growth of the global economy.

We should energetically enhance openness and cooperation. This is the right choice to promote common development and prosperity. An important mission of the Hannover Messe is to strengthen economic and technological cooperation and exchange among countries. Every year, a lot of scientific and technological advances presented here are absorbed by the market and the world. This has not only greatly increased the appeal of the Messe, but also showed us the right approach to take. We should continue to deepen international business cooperation and resolutely reject protectionism in all forms. We should move faster to improve global economic governance and make it fairer and more equitable. We should work together to meet global challenges such as climate change, ecological degradation, epidemics, natural disasters, and energy, resource and food security, and make the world a better place for all of us.

China’s industrialization will continue to advance rapidly for a long time to come. This will create huge development potential and business opportunities for both Chinese and foreign companies. I wish to reiterate here that China will remain unchanged in its commitment to the basic state policy of opening up. We will continue to improve our laws, regulations and policies, expand market access, strengthen intellectual property rights protection, ensure there is a level playing field for all companies legally registered in China when it comes to the accreditation of products of indigenous innovation and government procurement, and foster a more equitable, transparent, stable and predictable business environment for foreign companies. Companies attending the Hannover Messe are both leaders and promising newcomers in global industries. We sincerely welcome foreign companies to actively participate in China’s reform and opening-up endeavor and share both the opportunities and fruit of China’s prosperity and progress.