This year is the 35th anniversary of normalization of Diplomatic ties between China and Japan. Premier Wen Jiabao and the then Prime Minister of Japan Shinzo Abe jointly presided over a meeting and launched the China-Japan high-level economic dialogue mechanism during Wen’s visit to Japan in April. On November 20, during the East Asia Summit in Singapore, Premier Wen met with Japanese Prime Minister Fukuda Yasuo and the two countries declared that the first China-Japan high-level economic dialogue would be held in Beijing on December 1, specifically embodying the connotation of building Sino-Japanese strategic and mutually beneficial relations and indicating that the China-Japan economic cooperation mechanism has been elevated to a higher level. The main missions of the mechanism are defined as follows: first, to exchange the development strategies and macro economic policies between each other and deepen mutual understanding; second, to coordinate interdepartmental economic cooperation affairs and discuss the major issues of mutual concerns in cooperation; third, to strengthen the policy communications on important regional and international economic issues, and boost the bilateral cooperation in even wider fields.

Vice Premier Zeng Peiyan was appointed head of the Chinese delegation to the first China-Japan high-level economic dialogue. Representatives concerned from China’s Ministry of Foreign Affairs, National Development and Reform Commission, Ministry of Finance, Ministry of Agriculture, Ministry of Commerce, State Environmental Protection Administration, State Bureau of Quality and Technical Supervision and Quarantine and other ministries and commissions shall jointly attend the meeting. Japanese Foreign Minister Masahiko Komura shall head a high-level delegation, mainly comprised of 6 ministers from Japanese Ministry of Finance, Ministry of Economy, Trade and Industry, Cabinet Office, Ministry of Environment and Ministry of Agriculture, Forestry and Fisheries, to visit China and participate in the meeting.

At present, the two sides are busy preparing for the upcoming meeting. In the spirit of “cooperation for mutual benefits and harmonious development”, China will exchange the in-depth views with Japan on how to work together to establish strategic and mutually beneficial ties in trade and economic fields, and seek to achieve the goal of common economic development and co-prosperity between China and Japan.

In a bid to enrich the meaning of China-Japan strategic and mutually beneficial ties, both sides shall actively develop mutually beneficial cooperation in the following fields:

1. To strengthen exchanges on macro economy and policies.

China deems that presently the China-Japan trade and economic relations have enjoyed a mutually complementary and beneficial situation. Since China’s entry into WTO, China’s increasingly opening market has brought about tremendous consumption demand, which plays an important role in reviving Japanese economy. China is willing to exchange the policies on macroeconomic control and expansion of domestic consumption, as well as the experiences in energy conservation, environmental protection, technology-based country, etc.

2. To enhance trade and investment cooperation.

By the end of the year 2003, Japan had been China’s largest trading partner for 11 consecutive years. In 2006, the total China-Japanese trade volume exceeded US$200 bn and totaled US$207.36 bn, which was 207 times over that of the year1972, when the normalization of diplomatic ties between China and Japan was realized for the very first time. China’s exports to Japan stood at US$91.64 bn, up by 9.1% while its imports from Japan amounted to US$ 115.72 bn, increased by 15.2% over the same period last year. From January to October of the year 2007, the China-Japanese trade has maintained a rapid growth rate, the total trade volume between the two countries totaled US $191.89 bn, up by 14.9% year on year. Japan remains China’s third largest trading partner, only after EU and US. Japanese statistics indicate that the proportion of China-Japanese trade to Japan’s total foreign trade has been increased from 3.4% in the year 1990 to 17.2% this year. China has surpassed US and become Japan’s largest trading partner.

Mutual investment between China and Japan has seen a continuous growth. By the end of October 2007, Japan’s accumulative FDI in China had amounted to US$60.78 bn, which enabled Japan to become China’s second largest import sources. Statistics indicated that most Japanese-funded enterprises in China have been rewarded by fruitful benefits, which has strongly supported the recovery and growth of Japan’s economy and contributed to the development of China’s economy as well. Huawei, Hai’er and other powerful Chinese-funded enterprises have successfully entered into the Japanese market and developed sound cooperation with Japanese enterprises.

Under the new circumstances, how to develop respective potentials and improve the quality of cooperation has become an issue of mutual concern. China hopes to boost bilateral cooperation in new-high technology and small and medium-sized enterprises. In order to promote China-Japan cooperation in new-high technology trade, China intends to set up a “working group on China-Japan high-tech trade” that will be mainly engaged in research on developing technology trade and other important issues.

Aiming at boosting cooperation between small and medium-sized enterprises between the two countries, China’s Ministry of Commerce and Japan’s Ministry of Economy, Trade and Industry have reached consensus in principle and the two sides are negotiating the draft of Memorandum of Understanding on Cooperation between China-Japan Small and Medium-sized Enterprise Zones. It is hoped that China and Japan would continue the communication and negotiation, and strive hard to officially sign and implement the Memorandum of Understanding on Cooperation between China-Japan Small and Medium-sized Enterprise Zones at an earlier date.

3. To strengthen cooperation in energy conservation and environmental protection.

Energy conservation and environmental protection are the common issues that human beings have to face with. China attaches great importance to energy conservation and environmental protection while Japan has accumulated abundant experiences and technologies from the economic growth since WWII. Therefore, the two countries have bright prospects for cooperation.

At the Second China-Japan Forum on Energy Conservation and Environmental Protection held in Beijing in September 2007, the two parties agreed to further broaden areas for cooperation. Presently, China is actively pushing China’s Taiyuan Iron and Steel Group Company (TISCO) to set up a demonstration factory with Japanese enterprises, and develop cooperation on co-designing technology reform plan, technology introduction and equipment purchasing. Meanwhile, China also welcomes more Japanese enterprises engaged in steel, automobile, petrochemistry, construction materials and cement industry to launch trial projects and share the development achievements of China’s energy conservation market.

At the first China-Japan high-level economic dialogue, the two sides exchanged in-depth views on how to further boost cooperation, implement the Joint Statement on strengthening China-Japan Energy Cooperation and the Joint Statement on Strengthening Environmental Protection, and discussed issues of global climate. We sincerely hope that with our joint efforts, China and Japan will be able to achieve evident progress in their cooperation on energy conservation and environmental protection.

4. To enhance multi-lateral and regional economic cooperation.

China, the world’s largest developing country and Japan, the world’s second largest economic power should enhance their communications and negotiation on international and regional cooperation affairs. Through the China-Japan high-level economic dialogue, the two sides will discuss on how to push the Doha Round of WTO negotiation towards an earliest agreement. China and Japan will also exchange views on East Asian regional economic cooperation.

As the bilateral trade and economic cooperation is widened with each passing day, we should also notice that there are still some outstanding issues in our bilateral trade and economic cooperation. China believes that problems are inevitable during the development of China-Japan trade and economic cooperation. Historical experiences wise us that as long as we hold friendly talks and negotiations in the spirit of equality, mutual benefits and win-win cooperation, the disputes and problems will be finally resolved. China is willing to adhere to the spirit mentioned above and conduct positive dialogues with Japan. At the same time, China shall also strive hard to constantly improve its commercial environment in a bid to create a favorable business environment for Japanese and other foreign-funded enterprises in China.

China attaches great importance to the first China-Japan high-level economic dialogue. China sincerely hopes that through the high-level dialogue, China and Japan will expand consensus and develop all-round bilateral, regional and international cooperation, and enlarge mutual benefits and jointly make constructive contributions to the peace, stability and development of Asia and the world at large.