— Address by Xi Jinping, President of the People's Republic of China To the APEC CEO Summit

(Beijing, November 9, 2014)

Good morning and welcome to you, friends from the Asia-Pacific business community. Last year in Bali, we agreed to meet in Beijing this year. So here we are. I am very glad to meet with you again.

According to the traditional Chinese calendar, the winter season started two days ago. The city of Beijing at the turn of autumn and winter can be very colorful, as is described by a Chinese poem, "The water is clear and the mountain is bright, the frost comes in at night; Trees are covered with deep scarlet leaves mixed with yellow that is light." The yellow ginkgo leaves and the red maple leaves add color to this ancient capital. After a year's hard work, China and the other APEC members are looking forward to reaping a harvest at the upcoming 22nd APEC Economic Leaders' Meeting.

Home to ancient civilizations and emerging forces, the Asia-Pacific is a region with a long history and a splendid culture. It boasts hard-working people, beautiful scenery, strong impetus for development and a bright future.

Today's Asia-Pacific accounts for 40 percent of the world population, 57 percent of the world economy and 48 percent of the world trade. As the fastest growing region with the greatest potential and most vibrant cooperation in the world, our region is a major engine for world economic recovery and growth.

Today's Asia-Pacific has entered a new development stage. It has a high level of capital, technology, information and personnel movement. A big Asia-Pacific market is taking shape. Regional cooperation mechanisms are making good progress, while new initiatives and ideas keep cropping up.

Today's Asia-Pacific is enjoying a rising standing in the world. A new round of revolution in science and technology, industries and energy is on the horizon. The increasingly close connection between Asia-Pacific economies has made regional economic integration all the more necessary and urgent.

But today's Asia-Pacific also faces challenges of all sorts. The impacts of the international financial crisis linger. Recovery in some economies remains fragile. The Asia-Pacific has daunting tasks of raising the quality and efficiency of the economy and replacing old growth areas with new ones. There are different directions and priorities in accelerating the regional economic integration process, and various regional free trade arrangements keep emerging, making it difficult for some to make a choice.

The Asia-Pacific stands at a crossroads. Shall we continue to lead the world in creating a bright future, or shall we slow down only to be outperformed by others? Shall we deepen the integration process, or shall we let ourselves slip into a vortex of fragmentation? Shall we embrace openness and inclusiveness to work together for an Asia-Pacific century, or shall we cling to an outdated mindset unfit for the 21st century?

A great era calls for great vision, which in turn requires great wisdom. The development prospect of our region hinges on the decisions and actions we take today. We are duty-bound to create and fulfill an Asia-Pacific dream for our people. This dream is about acting in the spirit of the Asia-Pacific community and out of a sense of shared destinies, following the trend of our times, i.e. peace, development and mutually beneficial cooperation, and jointly working for the prosperity and progress of our region. It is about staying ahead of global development and making greater contribution to the well-being of mankind. It is about having more economic vibrancy, free trade and investment facilitation, better roads, and closer people-to-people exchanges. And it is about ensuring greater security and prosperity for our people and giving our children a better environment to grow, work and live.

To this end, we need to redouble our efforts.

-We need to jointly forge an Asia-Pacific partnership of mutual trust, inclusiveness and win-win cooperation. Those who share the same ideal and follow the same path can be partners. Those who seek common ground while shelving differences can also be partners. More friends, more opportunities. We should enhance mutual trust and remove doubts through sincere and in-depth communication; we should follow the idea of seeking harmony in diversity and respect each other's choice of development path; we should stay committed to mutually beneficial cooperation and fully leverage each other's strengths to promote development for all; and we should replace the "winner-take-all" mentality with an all-win approach and work together for great development and prosperity of our region.

-We need to jointly build an open economy in the Asia-Pacific. Openness brings progress while close-door policy leads to backwardness. Opening-up was, has been and will remain an important prerequisite for the Asia-Pacific to grow. It means greater openness within our respective economies to give full scope to labor, know-how, technology, management and capital. It also means opening-up to each other so that the diversity and variety of member economies can be turned into potential and driver for development. While endeavoring to bring regional economic integration to a higher level and initiate the Free Trade Area of the Asia-Pacific (FTAAP), we should also remain committed to open regionalism and work for new and open economic institutions and regional cooperation architecture, so that the door of the Asia-Pacific will always be open to the entire world.

-We need to explore new drivers for economic growth. Life never favors those who always follow the beaten path and content themselves with the status quo. Instead, life saves opportunities for people who are willing and able to reform and innovate. In this new round of global growth, only the reformers and innovators will emerge stronger and win. We need to be courageous and pioneering, vigorously pursue reform and innovation, actively explore a new path and model that meet our own development needs and look for new growth points and impetus.

-We need to draw a blueprint for comprehensive connectivity. Connectivity and infrastructure building in the Asia-Pacific is not only a necessity to achieve regional economic integration, but more importantly, it bears on the long-term development of all economies. We should work together to bring about connectivity covering both sides of the Pacific, which includes: hardware connectivity that brings the economies closer and paves the way for an Asia-Pacific connected with each other and the world; software connectivity that enhances alignment and coordination of policies, laws and regulations and creates convenient and efficient supply chains; and human connectivity that promotes people-to-people exchanges and fosters trust and friendship.

As such, China has made "Shaping the Future Through Asia-Pacific Partnership" the theme of this year's APEC meeting and identified three major topics, namely, advancing regional economic integration; promoting innovative development, economic reform and growth; and strengthening comprehensive development in infrastructure and connectivity.

I am convinced that broad consensus to be reached at the APEC Economic Leaders' Meeting in these areas will give fresh impetus to the sustained development of the Asia-Pacific.

At last year's APEC CEO Summit, I expressed our confidence in China's economic development and our commitment to further reform. Now, one year has passed and I am pleased that what we envisioned has come true.

In the first three quarters of this year, China's GDP grew by 7.4 percent on a year-on-year basis with all major economic indicators within the reasonable range. China's economy has been growing steadily, with continuous increase in urban employment and steady rise in household income, business profit and fiscal revenue. More importantly, structural readjustment has seen good progress with the service industry growing with a strong momentum and domestic demand expanding.

A new normal of China's economy has emerged with several notable features. First, the economy has shifted gear from the previous high speed to a medium-to-high speed growth. Second, the economic structure is constantly improved and upgraded. The tertiary industry and consumption demand are becoming the main driver. Urban-rural and regional disparities are narrowing. Household income is going up as a percentage of national income. The benefits of development are reaching more people. Third, the economy is increasingly driven by innovation instead of input and investment. The new normal will bring new development opportunities for China.

First, under the new normal conditions, China's economy has still registered considerable increment albeit the slowdown. After over 30 years of rapid growth, the size of China's economy is nothing like what it was. The increment in 2013 alone is equivalent to the annual economic aggregate of 1994 and big enough to rank as the 17th in the world. Even a growth rate of around 7 percent would place the Chinese economy among the top in the world in both speed and increment.

Second, under the new normal conditions, China's economic growth has become more stable and been driven by more diverse forces. Some worry whether the Chinese economy will see further decline in growth rate and be unable to overcome difficulties. Indeed there are risks, but not that formidable. Resilience best equips the Chinese economy against risks. We have adopted innovative ideas and approaches in macroeconomic management. And given the strategies and policy options at our disposal, we have the confidence and capability to cope with potential risks. We are also advancing the new type of industrialization, IT application, urbanization and agricultural modernization in a coordinated way, which will help relieve "growing pains." Moreover, the Chinese economy is now driven more by domestic consumer demand, thus steering clear of external risks from overreliance on export.

Third, under the new normal conditions, the Chinese economic structure has been improved and upgraded, heralding a more stable development prospect. In the first three quarters of this year, final consumption overtook investment by contributing 48.5 percent to economic growth. The value added of the services industry, accounting for 46.7 percent of GDP, continued to surpass that of the secondary industry. Hi-tech industry and equipment manufacturing industry grew by 12.3 percent and 11.1 percent respectively, notably higher than the average industrial growth rate. The per unit GDP energy consumption dropped by 4.6 percent. These figures show that the Chinese economy is undergoing profound structural changes and improving in quality and structure.

Fourth, under the new normal conditions, the Chinese Government has vigorously streamlined administration and delegated power, further unleashing market vitality. Simply put, we have lifted restrictions on the "invisible hand" of the market and ensured the proper role of the "visible hand" of the government. For example, we have introduced reform in business registration. In the first three quarters of this year, the number of newly registered market entities reached 9.2 million and the number of new enterprises increased by more than 60 percent over the same period last year.

That said, we are also soberly aware that the new normal is accompanied by new challenges and new problems. In fact, some potential risks are already emerging. The intensity of our endeavor to comprehensively deepen reform will determine whether we will successfully adapt ourselves to the new normal.

At the CEO Summit last year, I said that China's reform has entered the deep water zone where tough challenges must be met, and that we need to have the courage to crack the "hard nuts," ford dangerous rapids and take on deep-seated problems that have been built up over the years. To that end, overall arrangements were made at the Third Plenum of the 18th CPC Central Committee, involving 15 areas and over 330 major reform measures. These reform measures are being implemented in an orderly fashion. An arrow shot cannot be turned back. We will advance reform with firm resolve.

To comprehensively deepen reform, we need to stimulate market vitality. Market vitality comes from the people, especially from business leaders and their entrepreneurship. To energize the market, we need to effectively delegate power, foster an enabling environment, and work out necessary rules so that the entrepreneurs feel encouraged to leverage their strengths. We need to stress the importance for the government to better fulfill its role, to be more of a service provider than an administrator, and to offer services to businesses and economic and social development.

To comprehensively deepen reform, we need to broaden the path for innovation. If innovation is the new engine for China's development, reform is the indispensable igniter. We need to take more effective measures to enable the engine of innovation to run with full power. Committed to leveraging the role of innovation as the original driving force, we have given more support to innovation-driven businesses and vibrant small and medium-sized enterprises, and promoted transformation and upgrading of traditional industry, in a bid to shape new growth areas and driving forces.

To comprehensively deepen reform, we need to advance opening-up at a higher standard. China is committed to building new systems for an open economy. We will ensure greater market access, increase openness of the services sector including the capital market and open up more hinterland and border areas. China is committed to shaping an open economy in the Asia-Pacific featuring innovative development, interconnected growth and integrated interests. We will launch the FTAAP process this year and formulate the Roadmap for APEC's Contribution to the Realization of an FTAAP. We will explore the management model of pre-establishment national treatment plus the negative list, which will help China blaze new trails and gain fresh experience in the process of comprehensively deepening reform and opening-up.

To comprehensively deepen reform, we need to improve people's well-being and promote social equity and justice. Ultimately speaking, all reform measures must benefit the people and deliver a better life. China has introduced a more proactive policy to boost employment and entrepreneurship, and pushed for the continued increase in people's income. In the first three quarters of this year, 10.82 million new urban jobs were created, rise in CPI was kept at 2.1 percent, and urban and rural per capita income increased by 6.9 percent and 9.7 percent respectively. China is building a more equitable and sustainable social security system, improving its public service system and making innovation in the social management system.

In a word, comprehensively deepening reform will not only liberate the productive force but also unleash the vitality of the society. It will serve as a strong driving force for China's economic and social development.

The Chinese economy is increasingly interconnected and interdependent with the Asia-Pacific and world economies. China will stay focused on managing its own affairs well and endeavor to bring more benefits to the Asia-Pacific and the world with its own development. China will continue to build friendship and partnership with its neighbors, implement the policy of harmony, security and common prosperity in its neighborhood and uphold the principles of amity, sincerity, mutual benefit and inclusiveness in its neighborhood policy. China wants to live in harmony with all its neighbors.

According to statistics, between 2005 and the first half of 2014, six of the top 10 destinations of Chinese investment overseas are APEC members, with an aggregate volume of over $200 billion. It is estimated that China's outbound investment will total over $1.25 trillion over the next 10 years. Meanwhile, in the next five years, China will import over $10 trillion of goods, and the number of outbound Chinese tourists will also exceed 500 million. For the Asia-Pacific and the world at large, China's development will generate huge opportunities and benefits and hold lasting and infinite promise.

As its overall national strength grows, China will be both capable and willing to provide more public goods for the Asia-Pacific and the world, especially new initiatives and visions for enhancing regional cooperation. China is ready to work with other countries to promote the building of the "Silk Road Economic Belt" and the "21st Century Maritime Silk Road," get more engaged with regional cooperation, and make new contribution to the connectivity, development and prosperity of the Asia-Pacific.

Here, I am pleased to announce that a substantive step forward has been made in the preparatory work for the establishment of the Asian Infrastructure Investment Bank (AIIB). An inter-governmental memorandum of understanding was signed by the founding members of the bank not long ago here in Beijing. China will commit $40 billion to the establishment of a Silk Road Fund to provide investment and financing support for countries along the Belt and Road to undertake relevant projects in infrastructure, resources development and industrial cooperation. We are ready to work with all other parties to push for the early operation of the AIIB, and build the bank into a new platform for cooperation in connectivity, finance and other areas.

The business community is an important engine of economic development in the Asia-Pacific and the world. It has played a positive role in driving economic growth in the Asia-Pacific and leading the recovery of the world economy, and made significant contribution to China's reform, opening-up and modernization. We welcome Asia-Pacific business leaders to take an active part in China's reform, opening-up and modernization process and share in the fruits of China's reform and development.

As Asia-Pacific regional economic cooperation deepens and becomes more substantive, some of APEC's cooperation initiatives are already yielding positive results. I hope that you will leverage your unique strengths in information, technology and capital and proceed from the actual needs of the business community to actively contribute your views and suggestions on such important issues as trade and investment liberalization and facilitation, deepening regional economic integration and APEC's long-term development.

Looking ahead, the Asia-Pacific and the world face both unprecedented historic opportunities and more complicated risks and challenges in pursuing development and prosperity. The various parties of the Asia-Pacific must follow the trend of the times, and work together to shape the future through Asia-Pacific partnership, strive for greater progress in regional cooperation and usher in a brighter future for the Asia-Pacific region.