Wen Jiabao, Premier of the State Council of the People's Republic of China, speech at the 2006 China-Europe Business Summit, Helsinki, September 12, 2006

Honorable Prime Minister Vanhanen,

Ladies and Gentlemen,

It gives me a great pleasure to attend the 2006 China-Europe Business Summit in the beautiful city of Helsinki. I wish to begin by thanking the organizers for their warm invitation and thoughtful arrangement. Today, about 500 Chinese and European business leaders are gathered here to discuss strategies for boosting China-EU economic and technological cooperation. This in itself testifies to the vibrant growth of China-EU Comprehensive Strategic Partnership.

I know you are all keenly interested in China's economic development and particularly, its market prospect. So I will give you a brief overview and then share with you my thoughts on what we should do to enhance our business ties.

Over the past 28 years of reform and opening-up, China's economy has grown rapidly, at an average annual rate of 9.6 percent. Its GDP reached $2.23 trillion last year, ranking fourth in the world. The Chinese economy continued to maintain fast yet steady growth in the first half of this year, with GDP increasing by 10.9 percent over the same period last year. This has led to fast expansion of China's trade, both internal and external, and brought about fundamental change in the size and structure of China's market. China's foreign trade last year amounted to $1.42 trillion, making China the third largest trading nation in the world. China's market is thriving and holds tremendous potential for growth.

China's market is increasingly open. Opening-up is a basic policy to which China is committed. Since its WTO entry, China has honored its commitments in good faith. It has increased market openness, ended all non-tariff measures and lowered tariffs on industrial goods to 9.9 percent. If processing trade is included, China's average tariff level is now below 5 percent, even lower than that of some developed countries. In service trade, tourism, telecommunications, transportation, accounting, auditing and legal service are now open to foreign investment, and the banking sector will also be fully open by the end of this year. In central and west China, we have relaxed restrictions on the proportion of foreign equity and the access of foreign investment to some sectors. As a matter of fact, some sectors have been opened even earlier than required by China's WTO commitment. Of the 160-plus service sectors covered by the WTO, China has opened over 100, close to the level of developed countries.

China's market has huge potential for growth. To sustain economic growth by stimulating domestic demand is the long-standing strategy pursued by China. China has a population of 1.3 billion. It is in a crucial period of accelerated industrialization,