Distinguished Guests,

Ladies and Gentlemen,

I am so honored and pleased to be invited by the CSIS and the US-China Exchange Foundation to join your discussion today. I am particularly grateful to Mr. C.H. Tung. Thank you for all the time and guidance you have given to me over the years. You and your Foundation have done exemplary work to promote mutual understanding between the great peoples of China and the United States. Your vision on the future China-US relationship and your commitment to it are always the source of strength and confidence for all of us. Thank you very much for all this.

I just came back early this morning from Sunnylands, California. It is a beautiful place. It has been announced that President Xi Jinping and President Obama will have a meeting in about two weeks in Sunnylands. This is indeed a special meeting, a meeting with special significance. It will be the first face-to-face meeting between the two presidents since we finished the leadership change in China and since President Obama started his second term. The meeting has special significance because the two leaders will have opportunities to engage in in-depth exchanges of views on the strategic aspects of our relationship. This is certainly different from a normal state visit. For the state visit, we usually spend so much time on protocol and formality. But this is not the case for this meeting. This meeting has special significance because it may not produce a long list of what we call deliverables. But it will enable us to make much more cooperation and maybe deliver much more in the future. In many ways, this is quite unprecedented. We are confident that this meeting will be the first of many in the future between the leaders of our two countries. It will certainly help us enhance mutual understanding and confidence. It will lay a very good basis for our efforts to build a new type of relationship between our two great nations.

Our presidents have determined that China and the United States should work together to build a new type of relationship between our two great nations. This has attracted attention from all over the world. This is the latest effort by both nations to open up a new part of international relations. But we will not start from scratch. We already have a very solid foundation. In the last four decades, we have learned how to focus on strategic interests while managing our differences in a practical way. In the last four decades, we have learned how to expand our common grounds when the global political and economic structure shifted and the new situation has to be dealt with. And also in the last four decades, we have learned how to broaden our cooperation in many fields so that this cooperation will be based on a stronger foundation and get broader support from our two peoples. Indeed if we look at the development of our relationship in the last four decades, we could see that we have already made tremendous progress. We could take a lot of credit for peace and prosperity in the Asia-Pacific region in the last four decades. It is really amazing to think about it. We still have some flash points in Asia and the Pacific, like on the Korean Peninsula, in Afghanistan and elsewhere. But generally speaking, we now enjoy peace and stability in this region, and Asia and the Pacific is the most dynamic region in the world. Our two countries could and should take credit from this. Now we are working together to respond to so many issues, from the environment to climate change, from counterterrorism to nonproliferation, from trade to finance, and so many other issues. So I am quite confident that this new type of relationship is not an empty concept. It is quite real, already there taking shape. What we should do is to build up on this very good foundation and move forward, to give it more substance, to give it more meaning, and to make new progress.

This new type of relationship, first of all, is for the benefit of our two peoples – for the Chinese people to fulfill the Chinese Dream, for the American people to fulfill the American dream, and for our two peoples to work together to fulfill our common dream of peace and prosperity.

This new type of relationship is also our shared responsibility to the global community, especially when we are witnessing fundamental changes across the globe. In today's world, we can see that a number of developing countries are growing fast and playing a more important role in world affairs. They are termed emerging economies. But I think some of them are not just emerging. For China, we were on the world stage many many centuries ago. We are not emerging. We are revitalizing. But in any case, these developing countries can contribute more to global economic growth and play a greater role in global political and security affairs. So how will the existing order take these new powers in? How will the developed countries or the established powers interact with these emerging powers? If our two countries, the biggest developing country and the biggest developed country, can really turn into reality this new type of relationship, and can really work together on so many issues, it will be a very good example for the world. It might be an opening up of a new era in international relations that the rising or the developing countries will be new partners of the developed ones, making joint efforts in common search for solutions to so many problems. This is the shared responsibility for our two countries.

And also this new relationship is our shared responsibilities for the world economy. This is quite obvious since we are the two biggest economies in the world. The prospect of the world economy is not bright yet. So we can work together more closely. We can certainly put more confidence in the global economic prospects. We are certainly more capable of addressing the consequences of the financial crisis. We are certainly more capable of improving global economic governance. And maybe for the first time in human history, we will have a real global market. It is indeed imperative that our two countries take the responsibility and work together to move forward, and show real progress to our peoples in building up this new type of relationship.

Economic relationship has always been the major pillar of our bilateral relations. It should remain to be the major pillar, and play an even more important role in building up the new type of relationship between of two countries. I think the study sponsored by the China-US Exchange Foundation has made the right point. We should work together for cooperation and mutual benefit. This is the goal we should achieve. This is the direction we should keep going in. Mr. Podesta just gave us a summary of this discussion and the issues before us. There are always issues and disputes, because we are growing interdependent in economic relations. It is no surprise that we will have some disputes, some disagreements, or something we should address. We should still keep our focus on growing mutual benefits and interdependence, identifying new fields for cooperation, identifying new areas for converging interests. There are so many of them, such as green energy, protection of the environment, climate change, infrastructure building, and so on. At the same time, we should work together to make new efforts to improve the global economic governance. The current economic system is not perfect. We should reform it, and make it work better. As for the disputes and disagreements, we should work together on those issues against the background of our growing common interests and benefits. We should not politicize economic issues, because it will only make problems harder to resolve and make economic cooperation more difficult to achieve.

In this context, I would like to offer two small pieces of advice to both sides. To my fellow Chinese, especially to the Chinese business community, I would suggest that we learn from our American friends a strong sense of crisis all the time. The Americans are always wary of possible risks and challenges. Some of these challenges are real, and some are just imaginary. But this sense of crisis motivates the Americans to keep moving forward, to keep opening up to new areas of innovation and production, and enhancing competitiveness. This is something we should really learn from. And to our American friends, especially the US government, I would suggest maybe you could take some time to read the speech that Mr. Deng Xiaoping made at the beginning of China's reform and opening-up. He underscored the importance of being open, of welcoming foreign direct investment. He underscored the values of more competition. Maybe this is the time for the US government and the business community to read these remarks and find some new inspiration from them. So my advice is very simple: Don't worry, be open.

Thank you.