[Editor’s note: CAFIU Vice-President Ai Ping delivered a speech at the Oxford University China Centre during his visit to the United Kingdom from 16 to 19 of March at the invitation of the 48 Group Club. The following is the full text of the speech. ]

Respected Professor Rosemary Foot, Ladies and Gentlemen

Good Afternoon!

I’m very happy to come to your country and attend this function. For me this is a long-cherished dream that comes true.

I have all along regarded myself as one of the luckiest persons among my generation-people born in China in the  early nineteen-fifties. Basically for two reasons. First, just a few years before China adopted the opening up policy, I was enrolled in Beijing Foreign Languages Institute in 1973, majoring in English Language and Literature. And secondly, as the name of my organization would inform you that “international understanding” has been my life career. In the early 70s, China’s universities and colleges were not yet fully recovered from the turmoil of the so-called “cultural revolution” and every year no more than 150,000 young people would be enrolled in the institutions of higher learning -now it is around 7million. In 1976, just about one year before my graduation, the “gang of four” was smashed and the “revolution” came to a stop. And after a very important meeting- Third Plenary Session of the 11th Central Committee of the Communist Party of China (CPC)-in December 1978, the attention of the ruling party, CPC, the government and the whole nation was gradually shifted to something more practical: economic development and improvement of the people’s living standards. Talented people of any kind were badly in need everywhere and I was assigned a job in the International Department of CPC’s Central Committee (IDCPC). Two years later, I was sent to study in Canada in a college named Lester B. Pearson College of the Pacific. It was a very small college but it’s very international in nature: there were only 200 students, but they came from more than 50 countries. The motto of the college was “international understanding”. And when I returned to China in 1981, it so happened that CPC and other political parties, mass organizations and important personages of all walks of life jointly initiated the Chinese Association For International Understanding (CAFIU). And from then on, international understanding had become my life career and, for me, English language was mainly a tool to promote international understanding.

I worked in IDCPC for more than three decades, first as an interpreter, then a desk-officer (for Zimbabwe and Somali), later a director (of the section that in charge of Anglophone-Africa), deputy-director general and director general (of the African bureau), not missing any “layer” in the entire hierarchy. After the reform and opening-up, CPC’s international relations was no longer part of the so-called “International Communist Movement”, but that of the country’s “comprehensive diplomacy”. Party-to-party relations were not based on similar ideologies but four principles of Independence, Equality, Mutual-respect and Non-interference into each other’s internal affairs. So, basically what we were doing was to promote international understanding: informing each other the latest development in the country and the region, sharing ideas on the world situation and exploring possibilities of bilateral cooperation in various sectors.

These efforts have, actually, also served our own need to understand China’s national conditions and its relation with the outside world.

The prerequisite to promote international understanding is that you yourself should have at least a rudimentary understanding of your own country, your interlocutor’s country and the world in general. During 1980s and 90s, we were also engaged in international academic exchange and comparative studies with Africanists from the United States, the United Kingdom, France and the USSR. One point to prove that I had been a lucky person was that my effort to understand Africa led to a culmination of serving as China’s Ambassador to Ethiopia between March, 2001 and August, 2004. When I returned home, my responsibility was changed to neighboring countries in the South and South-east Asia. To sum up, my life career of international understanding has taken me to more than 90 countries.

Now, What can I say about international understanding

I believe that first of all one must have a strong interest and desire to learn about other peoples and their countries. In this globalizing world, there are plenty of opportunities for cooperation. Secondly, one must respect other people and treat them as equals, particularly those from the least developed countries.It is not their fault to be poor and underdeveloped. To the contrary, they will have a good chance to catch-up so long as they avail themselves of the comparative advantages of the latecomers’. Thirdly, one must try his or her best to accumulate necessary knowledge about the target areas such as history, tradition, culture, etc. And a short-cut is to cooperate with other people that share the same interests in the area studies.

Of course, realizing international understanding would not be a smooth sailing. There could be many obstacles and difficulties. All the people tend to understand other peoples and countries  according to their own experience, their own “national interests”, their own terms, concepts, categories, theories and discourses. And there are “established ideas”, “consensus” and “mainstreams”, interest-groups to support particular ideas. My personal experience is to follow traditional Chinese epistemology, or theory of knowledge: to integrate seeking knowledge with practice. The way to judge different theories is to see which could best explain the present and predict the future. In helping others to understand China, I believe, it is also necessary to have a sympathetic and considerate mind, try to provide as much information as possible of the latest development, offer them various “theories” and let them “judge” which would help them understand the present situation the best. The most important thing is to help them understand the “fundamentals” of our “national conditions”: where did we come from and where to go, what made us to choose the present path of development, the strategy and related policies. It’s in the sense of integration of practice with knowledge-seeking that I say I was very lucky to be lucky to be the Chinese Ambassador to Ethiopia, for that I was not just writing about “African development” but trying it together with my Ethiopian friends through Sino-Ethiopian cooperation in various fields.

But, my life career has not brought me to the most important “brain-storming” yet. When I retired from the “front line job” in IDCPC in 2014 and became a vice-president of CAFIU, I realized that all along I had taken English language as a tool to understand other people and help other people to understand China. Yet, so far, I had missed the most important group: those real native speakers of English, people of Anglo-sphere in general, those from Britain in particular. But now I would have very little time to prepare for such a trip. For sure, I had been to Canada and United States, and I made a trip to Australia and New Zealand last year, and I tried to read as much as possible about the Britain, its history, its politics, its society, even “English school” of international relations. I realized that many things we have labeled “West”, or even “mainstream” were actually first came into being on the British Isles. So a meeting between Chinese and British would also be a meeting between the east and the west. And if we put major countries in the world in to a spectrum in terms of the relations between the market and the state in their institutions, Britain and China would be very close to the two extremes. So, this trip to the UK, in intellectual terms of international understanding, would be a one of the most important.

Both China and Britain are important countries in the world, and President Xi Jinping had just made a very successful visit to the UK towards the end of last year, thus ushering in a “golden time” in our bilateral relations. Still, there is real need to improve our mutual understanding. The two countries are very different in many ways. China had a very brilliant ancient civilization, but missed the industrialization and become a prey of then newly emerged industrial powers. Among them, Britain was the first hegemony of world importance. Now Britain is still a world power, I would like to say, in terms of finance, media, education and creative ideas. So, your objective and correct understanding of a rejuvenating China is important worldwide.

So that is the more personal part of my speech. Now with your permission I’ll talk about the latest development in China.

How is the economy? China’s growth rate of 2015 is 6.9%, the lowest in 25 years, and that of the last quarter 6.8%. Most people believe that this is still within a reasonable range, with its structure further optimized, transformation and upgrading accelerated, new growth drivers strengthened and people’s livelihood improved. For sure, China still faces troublesome challenges such as a complicated external environment, ongoing domestic structural reform and so on, but what is more encouraging is that a structural change to the economy’s growth engine is underway. The value-added output of the service accounted for 50.5% of the GDP, a year-on-year increase of 2.4 percentage point, and 10 percentage points higher than that of the manufacturing industry. Consumption contributed 66.4 percent to economic growth, 15.4 percentage points higher than that in 2014. Per-capita disposable income surged 7.4% in real term, outpacing GDP growth, with that of rural and urban residents going up by 7.5% and 6.6%respectively. Thus, China’s Gini coefficient stood at 0.462, the seventh year in a row of drops.

In part because China’s economy is embroiled in a complicated and constantly changing situation, there is a possibility of its slowing down even further amid the supply-side structural reform, though the chances are that stable growth will be maintained in 2016. To promote the quality and efficiency of economic growth, the supply side reform should be pushed forward to boost innovation and total factor productivity, shift dependence from factor input to scientific and technological progress and improvement of labor quality. On demand side, reform will be advanced to expand domestic consumption and encourage spending. Strategically, it is believed, the economy should continue growing at a proper pace and with adequate momentum, while simultaneously ensuring stability. Tactically, the government efforts would be divided in five ways: cutting excessive industrial capacity, lowering financing cost for companies, destocking housing inventories, financial de-leveraging and improving weak links to increase effective supply.

A few words about the Thirteenth Five-Year Plan for Economic and Social development. I wish to emphasize three points. First, China’s 13th, Five Year Plans are very much different from each other. Some Chinese scholars have differentiate them into four “generations”, but not a linear development. Instead, there were some major set backs, particularly during the “cultural revolution”. So, the first one, made in early 1950s under the planned economy system could be regarded as Plan 1.0. The second one, made during the so-called “great leap forward”, and the third and fourth ones made during the cultural revolution should be regarded as Plan 0.0-0.2. The fifth and sixth plans made during the late 1970s and early 1980s, when the CPC started to correct the mistakes and restore the proper institutions, should be regarded as Plan 1.1-1.2. For the three plans made during the earlier stages of the reform, the nature, content and forms of the plan changed with the general trend prevailing in the country, so they should be regarded as Plan 2.0-2.2. The three plans from the tenth to the twelfth were made after China had decided to make “socialist market economy” the targeted economic system for the country and they can be labeled as Plan 3.0-3.2. To follow this logic, the Thirteenth Five Year Plan should be regarded as Plan 3.3.

The second point I wish to make is that the period covered by the plan, 2016-2020, will be decisive whether China can achieve CPC’s first Centenary Goal- to make Chinese society moderately prosperous in all respects. The Goal was first decided on the 16th National Congress of the Party in 2002 and some new objectives for the next five yeas were added, including maintaining a medium-high rate of growth, improving standards of living and quality of life, promoting well-rounded development of the people and the general level of civility throughout society, improving the quality of the environment and ecosystems and ensuring institutions become more mature. 

The third point is about the “philosophy of development” expressed through the plan, namely a philosophy of innovative, coordinated, green, open and shared development. To be innovative, means rely less on factor inputs and more on scientific and technological progress. Coordination means properly handling relationships between major areas of development, focusing on promoting balanced development between urban and rural areas as well as between different regions; promoting coordinated economic and social development and promoting the synchronized development of a new type of industrialization, information technology, urbanization and agricultural modernization.Green represents an eco-friendly outlook, meaning greater efforts to build a resource-conserving, environmentally friendly society and bring about a model for modernization whereby humankind develops in harmony with nature. Opening up means, in adapting to China’s ever deepening integration into the global economy,  to pursue a mutually beneficial strategy, coordinate domestic and foreign demand, balance imports and exports, allow for reciprocal exchange between China and the outside world, and simultaneously attract foreign investment, technology and talent. And China should participate actively in global economic governance and the global supply of public goods, seek to have a greater say in the institutions for global economic governance and look to build communities of common interests with more international partners. Sharing means to ensure that development is for the people, that it is reliant on the people, and that its fruits are shared by the people and that the people have a greater sense of benefit as they contribute to and share in development.   

Now if you so wish, I’ll say a few words about the value and regime of Renminbi Yuan. There have been some speculations and worry about Yuan’s value but there is actually no  real base for continuous devaluation if we look into China’s balance of payments, the competitiveness of the Chinese economy, Yuan’s value with a basket of currencies as well as the amount of cross-border capital. For quite some time, Chinese Yuan had been pegged to the dollar, so its value with some other currencies was dragged up by the stronger dollar and with all hot money resulted from the QEs it was no surprise to find speculating forces concentrated on the Yuan. And there is also no point to say that the Chinese Government would allow its currency to go down further so as to promote export and increase GDP, since the trade surplus of 2015 was a record of $595 billion. China will adhere to its target of market-based RMB exchange rate formation, i.e. a regime of managed floating system based on supply and demand of the market, and with a reference to a basket of currencies. We have to respect the market even if there are, for the short terms speculative forces; but we would not have a blind faith in the theory of the “perfect and effective market”, so there is also the need for management. We hope and strive to realize a relatively stable rate based on rational balance. The irrational one could not be stable, while not seeking stable one would not be able to find the real balance. Reform in a big country like China will take time. When there is a “window”, one must dare to push forward the reform, and when the necessary conditions are not available, one should not follow the theory in a dogmatic way.

That’s all I want to say for the moment. I hope there will be a real brainstorming and will try my best to answer your questions if you have any. Thank you for your attention!