Thank you very much Mr. Charles Foster, for your very warm welcoming remarks. It is really a great pleasure and honor for me to come to the Asia Society Texas Center. Let me also give my special thanks to Mr. Neil Bush. Thank you for inviting all of us to your important conference on China-U.S. Relations.

Today's event also reminds me of the speech I gave three years ago at the Asia Society Hong Kong Center on how China and the United States should work with each other in the Asia-Pacific. Early last year, I took part in a panel discussion in the Asia Society New York Center on the same subject. In April last year, I gave a speech in Harvard Kennedy School, also on the same subject. All these are only a small part of a much broader, stimulating and sometimes heated debate about the situation in the Asia-Pacific and how our two countries should work with each other in this region. This kind of lasting focus on the subject underscores two things: First, the growing importance of the Asia-Pacific in global affairs. Second, the key role that our two countries should play in shaping the future for the region.

Asia, more specifically the continental Asia, accounts for one third of the world's economic output and 60% of the world's population. The Asia-Pacific region, for instance the membersship of APEC, accounts for nearly 60% of the world's GDP and about 40% of the world's population. By whichever measurement, the significance is so clear.

As for China and the United States, we are the two biggest economies in the world, although the disparities between us are still great. We are both permanent members of the United Nations Security Council. We know that the United States has long standing, extensive and strong presence and interests in the Asia-Pacific. As for China, we are not only a Pacific country but also an Asian country. Geographically, China is situated in the center of the Asian continent. We have been here since the beginning of the human civilization. In a sense, we are more indigenous here. Because of the size and weight of our two countries, the long history the Asia-Pacific has and the great promises it holds, and because the Asia-Pacific is a place where different cultures, political systems and stages of economic development meet, how the Asia-Pacific develops will certainly have a major impact on the world. How our two countries interact with each other in this region will make a difference, not only to the future of the region, but also the world.

Fortunately our two countries are fully aware of the importance of our shared responsibility. There is on-going discussion and coordination between the two sides from the top level to the working level, from think tanks to media, from business community to the general public, about how our two countries should work together in this region and how we can have mutually reinforcing, constructive and positive interaction in the region. This has been on top of the agenda between our two presidents at Sunnylands two years ago, in Beijing last year and I'm sure in September this year. It has also been on top of the agenda for such senior mechanisms as the Strategic and Economic Dialogue and the China-US Asia-Pacific Consultations, not only between the State Department and China's Foreign Ministry, but also between the two militaries. There is emerging consensus that we should work together to seek a very positive way of interacting with each other in the region. This will not only be mutually beneficial to our two countries, but also bring about win-win outcomes for the entire region.

Having said all these, I have to point out that a lot more needs to be done, if we really want to translate such great vision into reality and make it an important part in the joint efforts of building up a new model of major country relationship between our two great countries. Particularly, there is a need for greater conceptual clarity on a number of key issues that will affect the very basis of our interaction, the future of our relationship and the region. Let me try to highlight just a few of these key issues.

First, balance versus imbalance and "re-balancing", which must sounds very familiar to everyone. What we are witnessing today in the Asia-Pacific? A process of balancing or a process to imbalance? This year marks the 70th anniversary of the end of World War II. 70 years ago, we had a very different Asia. Asia at that time was war-torn, impoverished and politically divided. China was one of the winning countries in World War II, but China suffered great lose during the war and very soon China was engulfed in the civil war. Many other Asian countries, including India and most of the ASEAN countries were not independent yet at that time. As for Japan, the militarist regime at that time not only brought untold suffering to Japan's neighbors, but also almost destroyed the nation itself. In the decades that followed, we witnessed two hot wars during the so called Cold War era in Asia. Most of the people in Asia were living in poverty. There were virtually no regional mechanism for economic development and cooperation, only military alliances.

But today's Asia is totally different. Although we still have some tension on the Korean Peninsular and we are still faced with the threat of terrorism, regional security situation on the whole is stable and all the hot-spot issues are contained and under control. Many countries, including China, India and the ASEAN countries are developing very fast and vigorously. The region is seen as the economically most dynamic region in the world and has indeed become one of the main engines driving the global economy. There are so many regional mechanisms engaged in regional integration, economic cooperation, free trade, mutual investment and many other things.

From historical perspective, today's Asia is moving toward much better balance than before. We are witnessing this historical process in the sense that so many countries are growing. China, India and ASEAN countries, have not only lifted their own people out of poverty, but also made ever greater contribution to global development. Asian countries themselves are also taking up greater responsibilities for regional security and prosperity. In terms of regional architecture, we have APEC, ASEAN, East Asia Summit and many others.

This movement toward better balance in Asia not only benefits the Asia-Pacific itself, but also benefits the global structure. For instance, in G20, there are 5 major Asian countries playing a significant role in the process, contributing to a more balanced growth of the world economy and better global economic governance. So I believe we are witnessing a process of much better balance in our region. This also helps us to achieve much better balance in the world. When we talk about any "re-balancing", if it helps us to promote or enhance this historical process of balancing, such efforts should be welcomed. If it is to the contrary, then it is on the wrong side of the history.

Second, inclusiveness versus exclusiveness. We have very different circumstances in our region. Countries are at different stages of economic development, have very different political systems, cultures and religions. We are faced with a choice. Shall we give full play to the diversity of our region and focus on our common interests, making sure that our development will surely benefit all countries? Or are we going to divide countries along the lines of stages of economic development, political system, ideology, culture or religion? In other words, are we going to have an inclusive approach or exclusive approach? This is a fundamental choice we have to make.

For China, we stand for community building, as highlighted by President Xi Jinping at the Boao Asia Forum in March this year. We believe that we should build a community among the regional countries, for common security, for widespread prosperity, and for our joint response to such regional issues like the Korean Peninsular, Afghanistan, counter terrorism, and also for response to such global issues like climate change, disease control and disaster relief. We really want to see a growing community in our region and China will certainly do its best to help facilitate the building of such community.

We are aware that when we talk about "Asia belongs to Asians", some people get worried. They are concerned whether this is an attempt to exclude others, maybe particularly the United States, from Asia. This is a misperception and misinterpretation of our intention. What we actually mean is that people in Asia should take up the primary responsibility to solve Asian problems and build a much better future for ourselves, because Asia is our homeland, because this is where our roots are. If we cannot help ourselves, how can anybody else help us? It is only natural and logical to say "Asia belongs to Asians" , just as we say "America belongs to Americans", "Africa belongs to Africans" and "Texas belongs to Texans". This does not mean that we are excluding others. On the contrary, we very much welcome others to take part in this joint efforts and make their contribution. In this regard, United States is an essential partner for us. We believe that Asia also belongs to the world. If we can be successful here, we are also contributing to global success.

Third, win-win cooperation versus zero-sum game. There are people who believe that success of one country would mean loss for another. And the development of China would be a challenge to the interests of other countries, maybe particularly the interests of the United States. This kind of zero-sum perception is certainly not in line with facts and with what we have witnessed in the last few decades. If we look at the history of the last four decades, ever since President George H.W. Bush became chief of the U.S. Liaison Office in Beijing, it's quite clear that China's reform and opening-up, the normalization of relations between China and the United States and between China and Japan are the important turning points for the process of moving toward greater regional stability and prosperity. China's development in the last three to four decades has really brought about great opportunities for everyone, including the United States. For instance, today the bilateral trade between our two countries is about 230 times the bilateral trade in the beginning of our relations. The trade between Texas and China was almost nothing 40 years ago. Now, its over 53 billion dollars annually.

Beyond these specific figures and tangible results, China's development and the growing relations between China and the United States have brought about much better mutual understanding, greater confidence in each other and much better predictability of the future, not only for our peoples, but also for the entire world. Such benefit is beyond any measurement. As President Xi said time and again, the Pacific is vast enough for our two great countries to develop together. In China, we believe that the rising tide will lift all boats. China's development is making the cake much bigger for everybody. We are not moving anybody else's cheese.

These are three of the key issues on which we must have a clear perception and make the right choice, so that the Asia-Pacific region will maintain and enhance the momentum of the last three to four decades, so that our relationship will move on a very positive and win-win track. Fortunately the two Presidents of our two countries have agreed that we should combine our efforts to build a new model of relationship between our two countries, characterized by non-conflict, non-confrontation, mutual respect and win-win cooperation.

This vision is already delivering. We already see progress on so many fronts, such as security cooperation, military to military relations, on-going work on the Bilateral Investment Treaty, growing mutual investment and bilateral trade as well as very promising cooperation in the area of clean energy and infrastructure building. We are working together effectively to deal with so many regional and international issues like the Korean Peninsular, the Iran nuclear issue and counter terrorism. We are also taking an important part in the global efforts to respond to global issues such as climate change and disease control.

I believe what we are doing to build this new model of relationship will certainly give us very good guidance for our interaction in the Asia-Pacific and what we are doing in the Asia-Pacific together will give more substance to the new model of relationship. We will show to the people that if we are really working together for such a new model, it will benefit our two peoples, everybody in the region and the entire world. I hope and I believe this on-going effort for constructive interactions between our two countries in the Asia-Pacific will be an important pillar for this new model of relationship. And the Asia-Pacific region will be a testing ground for a successful new model of relationship.

Thank you!