On May 5, 2016 local time, Foreign Minister Wang Yi and Minister of Foreign Affairs and International Cooperation Paolo Gentiloni of Italy jointly attended the 3rd meeting of China-Italy Entrepreneur Committee.
Wang Yi gave an impromptu speech. Wang Yi stated that both China and Italy are countries with time-honored histories and cultures. China represents the oriental civilization, while Italy is an important representative of the western civilization. Both sides respect and appreciate each other. The two peoples have a long tradition of friendly exchanges, and the two countries have now established a comprehensive strategic partnership. China appreciates that Italy sticks to its firm and friendly foreign policy towards China and regards Italy as an important cooperative partner in the European Union (EU). The steady development of China-Italy relations provides favorable prospects and a stable environment for business communities of both countries to conduct cooperation. Meanwhile, enterprises from both sides should seize the opportunity to enhance interest convergence through deepening cooperation, which could consolidate the economic foundation of bilateral friendship in return. China stands ready to join hands with Italy to open up a brighter future for bilateral relations.
Wang Yi pointed out that there are broad prospects for China-Italy economic cooperation. First, China's economy still enjoys great potential and vast prospects. During the past three decades, the Chinese economy has maintained a double-digit growth, creating a miracle in world economic growth. Currently, though China's economic growth has slowed down, with a tremendous base of 10 trillion dollars, the economy still enjoys a large number in absolute growth, even if the annual growth rate stands at 6 percent to 7 percent. More importantly, China has determined to transform its economic development mode into a new path featuring green and sustainable development through structural reform. Recently the 4th Session of the 12th National People's Congress (NPC) approved the "13th Five-Year Plan" and identified the concepts of innovative, coordinated, green, open and shared development. As the five development concepts being implemented, China's economy will embrace new and broad prospects and maintain a medium-high growth rate for a long period, which will bring more and greater business opportunities to other countries including Italy.
China has full confidence in this regard. Our confidence first comes from the fact that China is the largest market in the world with a 1.3-plus billion population. Its market size is four times of the US market. Statistics show that China's middle class, or the group with a per capita income over 10,000 dollars, has reached 400 to 500 million in number and it is still rapidly increasing.
Our confidence also comes from urbanization. For now, China's urbanization rate is under 40 percent and is expected to reach over 70 percent in the future. For every 10-percentage-point increase in urbanization rate, there are about 100 million more people entering the city, which will present China and the rest of the world enduring and huge demands as well as business opportunities.
Besides, our confidence also comes from the immense potential of the development of the service industry. Currently the proportion of the service sector in China's economy just reaches 50 percent, which leaves a space for at least 20 percent growth compared with the situation in developed countries. Therefore, looking from any perspective, the development anticipation of China's economy is optimistic and positive.
Wang Yi expressed that the two economies are highly complementary. Italy is known as "the kingdom of small and medium-sized enterprises (SME)". Every small and medium-sized enterprise has its unique technologies and knacks, forming the solid foundation for Italy's status as an industrial power. However, the market scale in Italy is limited, whereas that in China is unlimited. If Italian enterprises combine their technologies with the Chinese market, more opportunities will arise. In the meantime, China's economy has entered the middle and late stage of industrialization, where there is more emphasis on efficiency, and great need for advanced technology and management experiences. As a result, the enhanced SME cooperation between China and Italy can on the one hand promote Chinese enterprises to accelerate the process of transformation and upgrading and elevate their industrial level to a new height, on the other hand tap new market for Italian SME, which will definitely bring mutual benefits and win-win results.
In addition, China-Italy innovation cooperation also enjoys great potential. Innovation is an important development strategy of China as well as a strength and advantage of Italy. Innovation cooperation between the two countries will create more new opportunities for bilateral cooperation. In recent years, China has been vigorously promoting mass entrepreneurship and mass innovation. Nearly 40,000 enterprises are registered in China every day. If these dynamic emerging enterprises can work with Italy's experienced industries, both sides can not only exploit new fields for cooperation, but also join hands to tap third-party markets in Africa, Latin America, the Central and Eastern Europe, Asia and so forth to achieve triple-win or all-win results.
Wang Yi said that although Italy has comparatively complete infrastructures, they are due for an upgrade. Nowadays, China, as a late comer, has outstriped the oldtimers in high-speed railway, nuclear energy and other infrastructure construction and enjoys obvious advantages. The total length of China's high-speed railway has amounted to 18,000 kilometers, accounting for 70 percent of those around the world. The technology of high-speed train traveling over 300 kilometers per hour is quite mature and stable, with a competitive cost performance. China stands ready to cooperate with Italy in this field.
We can also cooperate in China's Belt and Road initiative. China is the starting point of the ancient Silk Road while Italy is one of the important final destinations. It is said that the top of Roman Colosseum at that time was all covered with Chinese silk. Over the past hundreds of years, the Eurasian continent was tortured by wars and turbulence. But today it breeds new vitality. It is hoped that China and Italy will carry forward the Silk Road spirit and jointly build the Belt and Road in the new era with other countries along the route, realize common development and prosperity, and join hands to well construct and develop the ancient continent of Eurasia, so as to make new contributions to both countries as well as human development.
Wang Yi noted that some Italian entrepreneurs had just mentioned steel overcapacity. Your concerns are reasonable since this issue involves industrial shift and employment of many countries. Isn't that the same with China? Indeed, China has surplus steel production capacity, but it is not just a result of China's economic slowdown since there is still a great demand for steel from our medium-high growth. It is also caused by decreasing global demand for steel due to the sluggish global economy. Hence, steel overcapacity is neither a problem for China alone nor a result caused by China. It is a common challenge faced by the whole world and should be dealt with by concerted efforts rather than finger-pointing. Over the past several years, China has cut down steel capacity by more than 90 million tons and will cut another 150 million tons in the future. Resultant re-employment, resettlement and other issues will be addressed by the Chinese government in an appropriate way through its own resource allocation. It is hoped that other countries will also first focus on solving problems on their own and then pursue mutually beneficial cooperation. It is believed that with the gradual recovery of global economy, especially the increasing demands from developing countries, there will still be a broad market space for steel production capacity. All in all, it is hoped that both Chinese and Italian entrepreneurs will make joint efforts to constantly enrich the connotations of China-Italy cooperation and push forward the development of China-Italy relations, so as to benefit the two peoples.