Since the founding of the People's Republic, especially since the beginning of reform and opening up, China has set out on an extraordinary journey, and the Chinese of my generation have had some first-hand experience.
Toward the end of the 1960s, when I was in my teens, I was sent from Beijing to work as a peasant in a small village, where I spent seven years. At that time, the villagers and I lived in earth caves and slept on earth beds. Life was very hard. There was no meat in our diet for months. I knew what the villagers wanted the most. Later, I became the village's party secretary and began to lead the villagers in production. One thing I wished most at the time was to make it possible for the villagers to eat meat to their heart's content. But it was very difficult for such a wish to come true in those years.
At the spring festival earlier this year, I returned to the village. It was a different place now. I saw black top roads. Now living in houses with bricks and tiles, the villagers had Internet access. Elderly folks had basic old-age care, and all villagers had medical care coverage. Children were in school. Of course, meat was readily available. This made me kindly aware that the Chinese dream is, after all, a dream of the people. We can fulfill the Chinese dream only when we link it with our people's yearning for a better life.
What has happened in [my village] is but a microcosm of the progress China has made through reform and opening up. In a little more than three decades, we have turned China into the world's second-largest economy, lifted 1.3 billion people from a life of chronic shortage and brought them initial prosperity and unprecedented rights and dignity. This is not only a great change in the lives of the Chinese people, but also a huge step forward in human civilization, and China's major contribution to world peace and development.
At the same time, we are civilly-aware that China is still the world's largest developing country. Our per capita GDP is only two-thirds that of global average and one-seventh that of the United States, ranking around 80th in the world. By China's own standard, we still have over 70 million people living under the poverty line. If measured by world bank standard, the number would be more than 200 million. Over 70 million citizens life on basic living allowances and number of people with disabilities exceeds 85 million. During the past two years, I have been to many poor areas in China and visited many poor families. I wouldn't forget the look in their eyes longing for distant, happy life.
I know that we must work still harder before all our people can live a better life. That explains why development remains China's top priority. To any one charged with the governance of China, their primary mission is to focus all the resources on improving people's living standard and gradually achieve common prosperity. To this end, we have proposed the two centenary goals, i.e. to double the 2010 GDP and per capita income of the Chinese and complete the building of a moderately prosperous society by 2020 and to build a prosperous, strong, democratic, culturally advanced and harmonious modern socialist country and realize the great renewal of the Chinese nation by the middle of the century. Whatever we do now is aimed at fulfilling these goals. To succeed in completing the building of a moderately prosperous society in all respects, we must comprehensively deepen reform, advance law-based governance, and apply strict party discipline. That is what our proposed four-pronged strategy is all about.
大家都关心中国的发展走向，关心中国的政策取向，这里，我就其中一些主要的问题讲几点意见。
Since you are all interested in the direction of China's development and foreign policy orientation, let me take this opportunity to share with you some of my thoughts in this regard.
China's economy will stay on a steady course with fairly fast growth. The Chinese economy is still operating within a proper range. It grew by 7 percent in the first half of the year, and this growth rate remains one of the highest in the world. This has not come by easily given the complex and volatile situation in the world economy. At present, all economies are facing difficulties, and our economy is also under downward pressure. But this is only a problem in the course of progress. We will take coordinated steps to achieve stable growth, deepen reform, adjust structure, improve livelihood and prevent risks, while strengthening and innovating macro regulation to keep the growth at a medium-high speed. Currently, China is continuing to move forward its new type of industrialization, digitalization, urbanization and agricultural modernization. China has a high savings rate, a huge consumption potential, a hard-working population and a rising proportion of middle-income people. This creates an enormous space for the services sector and offers a big market with great potential. China will focus more on improving the quality and efficiency of economic growth and accelerating the shift of growth model and adjustment in economic structure. We will lay greater emphasis on innovation and consumption-driven growth. In this way, we will solve the problem of unbalanced, uncoordinated and unsustainable development and enable the Chinese economy to successfully transform itself and maintain strong momentum of growth.
Recent abnormal ups and downs in China's stock market has caused wide concern. Stock prices fluctuating accordance with your inherent laws and it is the duty of the government to ensure an open, fair, and just market order and prevent massive panic from happening. This time, the Chinese government took steps to stabilize the market and contain panic in the stock market, and thus avoided the systemic risk. Mature markets in various countries have tried similar approaches. Now, China's stock market has reached the phase of self-recovery, and self-adjustment. On the 11th of August, China moved to improve its RMB central parity quotation mechanism, giving the market a greater role in determining the exchange rates. Our efforts have achieved initial success in correcting the exchange rate deviation. Given the economic and financial situation at home and abroad, there is no basis for continuous depreciation of the RMB. We will stick to the purpose of our reform to have the exchange rate decided by market supply and demand and allow the RMB to float both ways. We are against competitive depreciation or a currency war. We will not lower the RMB exchange rate to boost export. To develop the capital market and improve the market-based pricing of the RMB exchange, is the direction of our reform. This will not be changed by the recent fluctuation in the stock market.
The key to China's development lies in reform. Our reform is aimed at modernizing the country's governance system, and governance capabilities so that the market can play a decisive role in the allocation of resources. The government can play a better role and there is faster progress in building the socialist market economy, democracy, advanced culture, harmonious society, and soundly environment. At the third of the 18th party central committee in 2013, we decided on an over-arching plan for deepening reform featuring over 330 measures. In 2014, 18 major reform items were by-and-large completed. In the first half of this year, we rolled out 70 key reform programs with their effects gradually becoming evident. When it comes to the toughest reforms, only those with courage will carry the day. We have the results and guts to press ahead, and take reform forward. We will stick to the direction of market economy reform and continue to introduce bold and result-oriented reform measures concerning the market, taxation, finance, investment and financing, pricing, opening up, and people's livelihood.
China will never close its open door to the outside world. Opening-up is a basic state policy of China. Its policies of attracting foreign investment will not change, nor will its pledge to protect the legitimate rights and interests of foreign investors in China and improve its services for foreign companies operating in China. We respect the international business norms and practices of non-discrimination, observe the WHO principle of national treatment, treat all market players including foreign-invested companies fairly, and encourage transnational corporations to engage in all forms of cooperation with Chinese companies. We will address legitimate concerns of foreign investors in a timely fashion, protect their lawful rights and interests and work hard to provide an open and transparent legal and policy environment, an efficient administrative environment and a level playing field in the market, with effective ID protection in particular, so as to broaden the space of cooperation between China and the United States and other countries.
China will follow the basic strategy of the rule of law in governance. Law is the very foundation of governance. We will coordinate our efforts to promote the rule of law in governance and administration, for the building of the country, the government and society on solid basis of the rule of law, build greater trust in judicial system, and ensure that human rights are respected and effectively upheld. China will give fair treatment to foreign institutions and foreign companies in the country's legislative, executive, and judicial practices. We are ready to discuss rule of law issues with the USside in the spirit of mutual learning for common progress.
China is a staunch defender of cybersecurity. It is also a victim of hacking. The Chinese government will not, in whatever form, engage in commercial thefts or encourage or support such attempts by anyone. Both commercial cyber theft and hacking against government networks are crimes that must be punished in accordance with law and relevant international treaties. The international community should, on the basis of mutual respect and mutual trust, work together to build a peaceful, secure, open, and cooperative cyberspace. China is ready to set up a high-level joint dialogue mechanism with United States on fighting cyber crimes.
China recognizes the positive role played by foreign non-profit organizations. So long as their activities are beneficial to the Chinese people, we will not restrict or prohibit their operations, but will protect their operations through legislation and protect their legitimate rights and interests. On their part, foreign NPO's in China need to obey Chinese law and carry out activities in accordance with law.
China will continue fighting corruption. As I once said, one has to be very strong if he wants to strike the iron. The blacksmith referred to here is the Chinese Communist Party. The fundamental aim of the Party is to serve the people heart and soul. The Party now has over 87 million members, and unavoidably it has problems of one kind or another. If we let these problems go unchecked, we will risk losing the trust and support of the people. That is why we demand strict enforcement of party discipline as the top priority of governance. In our vigorous campaign against corruption, we have punished both "tigers" and "flies", corrupt officials irrespective of ranking, in response to our people's demand. This has nothing to do with power struggle. It's nothing like what you see in House of Cards. China is ready to cooperate closely with international community in fighting corruption and tracking down fugitives. The Chinese people look to the US for support and coordination so that corrupt elements will be denied an overseas "safe haven".
China will keep to the path of peaceful development. We have just commemorated the 70th anniversary of the victory of the Chinese People's War of Resistance against Japanese Aggression and the World Anti-Fascist War. An important lesson history teaches us is that peaceful development is the right path, while any attempt to seek domination or hegemony through force is against the historical tide and doomed to failure. The Chinese recognized as early as 2,000 years ago that "though a country is now strong, bellicosity will lead to its ruin." China's defense policy is defensive in nature and its military strategy features active defense. Let me reiterate here that no matter how developed it could become, China will never seek hegemony or engage in expansion. To demonstrate our commitment to peaceful development, I announced not long ago that the size of China's military will be cut by 300,000. China is ready to work with other countries to build a new type of international relations with win-win cooperation at its core, replacing confrontation and domination with win-win cooperation, and adopting a new thinking of building partnerships, so as to jointly open up a new vista of common development and shared security.
As far as the existing international system is concerned, China has been a participant, builder and contributor. We stand firmly for the international order and system that is based on the purposes and principles of the UN Charter. A great number of countries, especially developing countries, want to see a more just and equitable international system, but it doesn't mean they want to unravel the entire system or start all over again. Rather, what they want is to reform and improve the system to keep up with the times. This would serve the common interests of all countries and mankind as a whole.
China has benefited from the international community in development, and China in turn has made its contribution to global development. Our "Belt and Road" initiative, our establishment of the Silk Road Fund and our proposal to set up the Asian Infrastructure Investment Bank (AIIB) are all aimed at helping the common development of all countries rather than seeking some kind of spheres of political influence. The "Belt and Road" initiative is open and inclusive. We welcome participation of the U.S. and other countries and international organizations. We have vigorously promoted economic integration in the Asia Pacific and the Free Trade Area of the Asia Pacific in particular, because we want to facilitate the shaping of a free, open, convenient and dynamic space for development in the Asia Pacific. We call for an outlook of common, comprehensive, cooperative and sustainable security, because we want to work with other countries in the region and the rest of the international community to maintain peace and security in the Asia Pacific.
In our Sunnylands meeting in 2013, President Obama and I reached the important agreement to jointly build a new model of major country relationship between the two countries. This was a major strategic choice we made together on the basis of historical experience, our respective national conditions and the prevailing trend of world.
Over past two years and more, the two sides have acted in accordance, with the agreement steadily moving forward by actual coordination and cooperation in various fields, and made important progress. We worked hand-in-hand to cope with aftermath of international financial crisis and promoted global economic recovery. We deepened pragmatic exchanges and cooperation in all fields, which brought about tangible benefits to the two people's. Last year, actual trade, two-way invesment stock, and total number of personnel exchanges all hit a record high. We maintain close communication and coordination on such international and regional issues, as the Iranian nuclear issue, the Korean nuclear issue, south of Sudan, Afghanistan and the Middle East, as well as such global issues as fighting against Ebola and countering terrorism. As an old Chinese saying goes, peaches and plums do not talk, yet a path is formed beneath them. These worthy fruits of cooperation across the Pacific Ocean speaks eloquently to the vitality and potential of China-US relations.
This leads to the question: what shall we do to advance the new model of major country relationship between China and the US from a new starting point and how can we work together to promote world peace and development? The answer, in my view, is to stick to the right direction of such a new model of relationship and make gradual yet solid progress. An ancient Chinese said, "A decision can be properly made after taking into account the past, the future and the normal practices." A number of things are particularly important for our efforts.
First, we must read each other's strategic intentions correctly. Building a new model of major-country relationship with the United States that features non-conflict, non-confrontation, mutual respect and win-win cooperation is the priority of China's foreign policy. We want to deepen mutual understanding with the U.S. on each other's strategic orientation and development path. We want to see more understanding and trust, less estrangement and suspicion, in order to forestall misunderstanding and miscalculation. We should strictly base our judgment on facts, lest we become victims to hearsay, paranoid or self-imposed bias. There is no such thing as the so-called Thucydides trap in the world. But should major countries time and again make the mistakes of strategic miscalculation, they might create such traps for themselves.
Second, we must firmly advance win-win cooperation. Cooperation is the only right choice to bring about benefits, but cooperation requires mutual accommodation of each other's interest and concerns, and the quest of the great common ground of converging interest. If China and the UScooperate well, they can become a bedrock of global stability and a booster of world peace. Should they enter into conflict or confrontation, it would lead to disaster for both countries and the world at large. The areas where we should and can cooperate are very broad. For instance, we should help improve the global governance mechanism and work together to promote sustained growth of world economy and maintain stability in the global financial market. We should conclude as soon as possible a balanced and high quality BIT, deepen the building of a new type of mill-to-mill relations, expand pragmatic cooperation on clean energy and environmental protection, strengthen exchanges in law enforcement, anti-corruption, health, and local affairs, and tap the corporation potential in infrastructural development. We should deepen communication and cooperation at the United Nations A-PEC, G-20, and other multi-electoral mechanisms, as well as our major international and regional issues and global challenges so as to make a bigger contribution to world peace, stability, and prosperity.
Third, we must manage our differences properly and effectively. As a Chinese saying goes, "The sun and the moon shine in different ways, yet their brightness is just right for the day and the night respectively." It is precisely because of so many differences that the world has become such a diverse and colorful place, and that the need to broaden common ground and iron out differences has become so important. A perfectly pure world is non-existent since disagreements are a reality people have to live with. China and the United States do not see eye to eye on every issue, and it is unavoidable that we may have different positions on some of the issues. What matters is how to manage the differences. And what matters most is that the two sides should respect each other, seek common ground while reserving differences, take a constructive approach to enhance understanding and expand consensus and spare no effort to turn differences into areas of cooperation.
Fourth, we must foster friendly sentiments among the peoples. People-to-people relations underpin state-to-state relations. Though geographically far apart, our peoples boast a long history of friendly exchanges. Some 230 years ago, Empress of China, a USmerchant ship, sailed across the vast oceans to the shores of China. Some 150 years ago, tens of thousands of Chinese workers joined their American counterparts in building the Transcontinental Pacific Railway. Some 30 years ago, China and the United States, as allies in World War II, fought shoulder-to-shoulder to defend world peace and justice. In that war, thousands of American soldiers laid down their precious lives for the just cause of the Chinese people. We will never forget the moral support and invaluable assistance the American people gave to our just resistance against aggression and our struggle for freedom and independence.
The Chinese people have always held American entrepreneurship and creativity in high regards. In my younger years, I read the Federalist Papers and Thomas Paine's Common Sense. I was interested in the life story and thinking of George Washington, Abraham Lincoln, Franklin Roosevelt and other American statesmen. I also read works of Henry David Thoreau, Walt Whitman, Mark Twain and Jack London. I was most captivated by Ernest Hemingway's The Old Man and the Sea and its descriptions of howling wind, driving rain, roaring waves, small boat, the old man and sharks. So when I visited Cuba for the first time, I paid a special visit to the breakwater in Cojimar where Hemingway wrote the book. And in my second visit of Cuba, I dropped by the bar Hemingway frequented and ordered a mojito, his favorite rum with mint leaves and ice. I just wanted to feel for myself what was on his mind and what the place was like as he wrote those stories. I believe that it is always important to make an effort to get a deep understanding of the cultures and civilizations that are different from our own.
The Chinese character Ren, or people, is in a shape of two strokes supporting each other. The foundation of the China-US friendship has its roots in the people and its future rests with the youth. I want to announce here that China supports the initiative of sending a total of 50,000 Chinese and American students to study in each others' countries over the next three years. China and the US will launch a year of tourism in 2016. China on its part will create more favorable conditions for closer people-to-people exchanges.
Dr. Kissinger wrote in his book, World Order, that, and I quote, each generation will be judged by whether the greatest and most consequential issues of the human condition have been faced. And Martin Luther King said, "the time is always right to do the right thing. Today we have come once again to a historical juncture. Let us work together to bring about an even better future for China-US relations and make an even greater contribution the happiness of our two people's and well-being of the world. "
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