Dr. Calleya,

Ambassador Lubrano,

Ladies and Gentlemen,

Good Morning.

I feel delighted today to have a chance to meet friends from 15 countries, for which, I should particularly thank the Mediterranean Academy of Diplomatic Studies (MEDAC) for sponsoring the course for the recent years. MEDAC not only is a distinctive institute for higher learning in diplomacy focused on and beyond Mediterranean issues, but also now serves as a bridge building understanding and friendship among diplomats from Europe, North Africa, the Middle East and China far in the east. Therefore I do appreciate this opportunity to share with you thoughts on "Changing China, its foreign policy and relations with the EU".

The year 2008 is of particular importance for China. It marks the 30th anniversary of the implementation of the reform and opening-up policy. So it is a rightful moment for us today to review the changes that have taken place in China.

30 years over, China has now embarked on a path of development that suits its national conditions. Conforming to the trend of the times, it is a path of building socialism with distinctive Chinese features, aiming at establishing socialist market economy, democracy, culture and a harmonious society.

30 years over, China has sustained fast economic growth. Growing at an average annual rate of 9.7 per cent, China's GDP has increased by 16 times in the past 30 years, jumping from the 15th to the 4th place in the world. With its imports and exports seeing a 100-time increase during the same period, China has now become the 3rd largest trading nation from the 32nd.

30 years over, life has been significantly improved for the Chinese people. GDP per capital has grown by nearly 10 times from 226 U.S. dollars to 2,100 dollars. Effectively, over 100 million Chinese has been lifted out of poverty.

30 years over, the Chinese society is undergoing profound transformation. Diversified thinking, discussion of such concepts as competition, efficiency, democracy, rule of law have open to the public. Chinese people are enjoying greater freedom in thinking, making choices on their own and deciding their own way of life.

Ladies and Gentlemen,

The past 30 years have also witnessed phenomenal changes in China's relations with the rest of the world. It's now closely interconnected with the outside world and has assumed the role of active player and constructive contributor in the international system.

30 years on, China has become an important engine for world economic growth. In recent years, China has contributed over 10 per cent to world economic growth. It surpassed that of the US for the first time in 2007 and reached a remarkable 17 per cent.

30 years on, China has been a major driving force for global trade. From 2003 to 2007, more than 15 per cent of global trade growth has been attributed to China, the same level as that of the US. In the coming years, China will import over 1 trillion U.S. dollars worth of goods every year, providing huge potentials for her trading partners.

30 years on, China's market has provided valuable opportunities for global investors. Last year, China used a remarkable 74.8 billion U.S. dollars worth of foreign investment with a year-on-year increase of 7.78 per cent. As a result, over half of China's export of industrial products was made by foreign-invested businesses inside China. Statistics also show that from 1990 to 2005, foreign-invested businesses had close to 300 billion U.S. dollars worth of profits transferred from China.

Ladies and Gentlemen,

For all the remarkable achievements I mentioned above, yet China's economic foundation is still not strong enough. Its achievements cannot yet fully meet the need of a big population of 1.3 billion. China's GDP is just 5.7 per cent of the world total and the country ranks after 100th place in terms of per capita GDP. More than 20 million people remain in poverty and 100 million people still live on less than one US dollar a day. With only 9 per cent of the world's arable land and 1/4 of natural resources in per capita terms, China needs to ensure that 23 per cent of the world population has enough food and other basic necessities. China also faces enormous pressure in terms of employment, resources, energy and the environment. It has enormous amount of work to be done in social development which other countries just rarely haven't met before.

So to sum up, looking ahead, although being confident, we are sober-minded that it will take the efforts of several generations to build China into a modern and medium level developed country.

Now, looking back on the past 30 years, there's one precious conclusion we Chinese would never forget, which has been learned, practiced and treasured throughout the years. That is, for developing itself one country should not only rely on its own efforts, but also carry out reform and opening-up and pursue win-win progress and common development with other countries. This conclusion, as once again expounded on the 17th National Congress of the Communist Party of China last year, has clearly defined our country's foreign policy. It emphasizes that China will unswervingly follow the path of peaceful development, adhere to the opening up strategy of win-win progress, and promote the building of a harmonious world of durable peace and common prosperity. To elaborate:

First, China will as ever stay on the course of peaceful development. This is our strategic choice and its essence is that we seek to develop ourselves in a peaceful international environment and contribute to the cause of world peace through our own development.

Second, China will follow a comprehensive opening-up and win-win strategy. Relying mainly on our own effort to achieve, yet under today's interconnected world, we shall also get actively involved in international economic and trade cooperation. We will endeavor to enable economic globalization to produce prosperity for all.

 Third, China will be committed to building a harmonious world of enduring peace and common prosperity. Deeply rooted in China's philosophy and culture, the concept gives full expression to our desire for peace, our commitment to be a responsible member of the international community, and our willingness to work with other countries to achieve peace and prosperity.

Fourth, in developing relations with other countries, China would observe the following principles:

Politically, all countries are equal no matter what's the size and strength. Countries have the right to choose their own social system, development path and enjoy equal participation in international affairs to promote democracy in international relations.

Economically, we should cooperate with each other, draw on each other's strengths and make joint efforts to ensure balanced progress of economic globalization so that it can benefit all.

Culturally, we should learn from each other, expand common ground while shelving differences, respect diversity, and advance the progress of human civilization through a common endeavor.

On security front, we should build mutual trust, strengthen cooperation, settle international disputes by peaceful means, and work together to safeguard world peace and stability.

On environmental issues, we should help and cooperate with each other and take good care of the Earth, the only home of mankind.

Ladies and Gentlemen,

Having sketched out the big framework of China' foreign policy above, now let me dwell a bit further on Sino-EU relations.

With over 30 years since the establishment of diplomatic relations in 1975, despite twists and turns, China-EU relations as a whole have been growing stronger and more mature. China-EU cooperation now covers more than 40 sectors. Politically, our relations have gone through from constructive partnership to comprehensive partnership and then to today's comprehensive strategic partnership. On the economic and trade front, the volume of trade between China and Europe has increased 100 times in 30 years, 356 billion U.S. dollars in 2007. The EU has been China's largest trading partner for three consecutive years.

So looking ahead, we are confident about future China-EU relations. We also have all the more reasons to see more potentials to explore and bright future to expect in both relations on the following observations,

Firstly, there is no fundamental conflict of interest between China and the EU. History has proven whatever the differences existed in historical background, cultural heritage, political system and economic development level, the relations of mutual trust and benefit would not be affected when two sides be in a spirit of equality and mutual respect.

Secondly, the political, economic and cultural common understanding and interaction between two sides offer a solid foundation. To number a few, we both advocate multilateralism. Our two economies are highly complementary. And we both stand for more cultural exchanges and mutual emulation. As the smallest yet the first European country Malta to host a China Cultural Center in 2004, the success of it has spoken a lot for how much we attract each other in the cultural dialogue between civilizations.

Thirdly, being both in a crucial stage of development, our interests increasingly overlap. Internally, in keeping with the country's advocations of Scientific Outlook on Development to build a harmonious society and ensure sound and fast economic growth, it's essential for us to draw upon the successful practices of the European countries. Meanwhile, European countries benefits in its integration progress by intensifying cooperation with China in all fields. Externally, in meeting global challenges as terrorism, proliferation of weapons of mass destruction, trans-national crimes, environment and climate change etc, one simply could hardly dismiss the valuable existence of the other.

Ladies and Gentlemen,

The world today is undergoing major changes and readjustments. To pursue peace, development and cooperation constitutes an irresistible trend of the times. However, the world is far from tranquil. Local conflicts and hotspot issues flare up one after another. Global economic imbalance is aggravating. North-South gap is widening, and non-traditional security threats have emerged on top of traditional security threats. So it is in light of this new international situation that we are not exaggerating to say, the fundamental factors that contribute to the growth of China-EU comprehensive strategic partnership are increasing rather than decreasing, the shared interests between China and Europe are expanding rather than diminishing. We practically need each other more, but not less.

So, both China and the EU should make efforts to elevate the comprehensive strategic partnership to a new high. To that end, we have proposed the following priorities to work with.

First, to strengthen strategic mutual trust. As two important forces in the world, China and Europe shoulder the responsibility of safeguarding world peace and promoting common development. The two sides should keep close high-level contacts and make full use of the multi-level political dialogue and consultation mechanisms to strengthen communication and coordination on major international or regional issues as well as other key issues concerning our immediate interests.

Second, to enhance pragmatic and beneficial cooperation. The growth of Sino-European relations serves the immediate, long-term and fundamental interests of both sides. Both sides should actively look for new opportunities for cooperation, further enhance bilateral exchanges and collaboration in all areas, and jointly face up to global challenges including climate change, energy security and environmental protection.

Third, to expand common ground for the benefit of pushing forward all-round strategic partnership. We agree that China and European countries could not always see eye to eye on everything. However, the discords, put in a different light, prove powerfully how close our cooperation is. We need more dialogue, more consultation and more cooperation.

Ladies and Gentlemen,

In the new century, mankind faces both opportunities and challenges for development. And I firmly believe there are more opportunities than challenges. We all have an obligation to carry on and push forward the friendship and cooperation between our countries, and to make joint efforts to deal with common opportunities and challenges. In 4 months time, we'll usher in Olympic games in Beijing. Now let me finish my speech by using our slogan for the game. "One world, One dream". Let's wish a brighter future for all of us.

Thank you.