Speech by H.E. Li Keqiang
Premier of the State Council of
The People’s Republic of China
At the Second Lancang-Mekong Cooperation Leaders’ Meeting
Phnom Penh, 10 January 2018
Prime Minister Hun Sen,
I’m pleased to join you in the beautiful city of Phnom Penh for the Second Lancang-Mekong Cooperation (LMC) Leaders’ Meeting. I wish to thank the Cambodian government for its thoughtful preparation and arrangements for our meeting. My thanks also go to other Mekong countries for your contribution to the LMC.
Our six countries are close neighbors enjoying a deep bond of cultural and people-to-people affinity. These natural connections have been reinforced by our sharing of the Lancang-Mekong River. In the spring of 2016, the LMC process was officially launched at the first leaders’ meeting in Sanya. Two years on, thanks to our concerted efforts, we have substantiated the LMC initiative with solid steps. Most of the early harvest projects identified at the first leaders’ meeting have been completed or have made substantial progress. We have put in place an LMC framework guided by leaders and underpinned by all-round cooperation and broad participation. With progress and results delivered daily, monthly and annually, we have created an LMC speed, and fostered an LMC culture featuring equality, sincerity, mutual assistance and kinship.
The 19th National Congress of the Communist Party of China held over two months ago reaffirmed China’s commitment to the path of peaceful development, to international cooperation on the Belt and Road Initiative and to the building of a community with a shared future for mankind. China will continue to deepen relations with its neighbors in line with the principle of amity, sincerity, mutual benefit and inclusiveness and the policy of building friendship and partnership with its neighbors. We will increase assistance to other developing countries, especially the least developed ones, and do our part in reducing the North-South development gap. China’s initiation of and participation in the LMC reflects its commitment to building a community with a shared future for mankind. It is also an example of the relationship of amity, sincerity, mutual benefit and inclusiveness that we have endeavored to develop with our neighbors.
The LMC, like a powerful locomotive, is propelling the cooperation between China and the Mekong countries into a stage of high-speed growth. Let me cite a few figures in this regard. China is now the largest trading partner to Cambodia, Myanmar, Thailand and Vietnam and the second largest to Laos. According to preliminary statistics, China’s trade with these countries in 2017 increased by 16% to more than US$220 billion. China’s investment topped US$42 billion in cumulative terms and rose by more than 20% in 2017. Since the first leaders’ meeting, over 330 flights were added between China and the Mekong countries. In 2017, about 30 million visits were made between us.
The LMC, as one of the most vibrant and productive frameworks in the region, is bound to provide stronger support and broader platforms for regional economic and social development. China is ready to discuss and plan our future cooperation from a new starting point and on the basis of existing achievements. Let us work together to build an LMC economic development belt, and a community with a shared future of Lancang-Mekong countries to strengthen the forces for peace and development in our region.
The Lancang-Mekong Cooperation, as the first new type of sub-regional framework initiated by riparian countries, is an important platform for advancing the Belt and Road Initiative through consultation and collaboration. Over the past two years, under the “3+5 cooperation framework” set up at the first leaders’ meeting, we have put forward cooperation initiatives covering more than 200 projects. With the joint efforts of all sides, the LMC has outperformed our expectations.
Institution building has made steady progress, with a four-tiered meeting mechanism in place consisting of meetings among leaders, foreign ministers, senior officials and working groups. All the six countries have set up an LMC National Secretariat or Coordination Unit. Joint working groups have been established in all six priority areas, namely, connectivity, industrial capacity, cross-border economic cooperation, water resources, agriculture and poverty reduction. The Lancang-Mekong Water Resources Cooperation Center, the Environmental Cooperation Center and the Global Center for Mekong River Studies are all up and running, providing an effective platform for policy dialogue, training, project cooperation and joint research.
Major development projects are moving forward smoothly. The financial support China has pledged is being delivered, from the concessional loans, the preferential export buyers’ credit to the special credit line for industrial capacity cooperation, supporting over 20 major infrastructure and industrialization projects in the Mekong countries. Construction has got underway at the China-Laos Railway and China-Thailand Railway. Equipment installation has started at the Vinh Tan thermal power plant in Vietnam with an investment of US$1.7 billion. The first phase of the Nam Ou River Cascade Hydropower Plant of Laos has been put into operation, and river closure has been completed for the second phase. When fully operational, the plant will supply 12% of the total electricity consumption in the country. Construction is expected to start soon for a new airport in Siam Reap with an estimated passenger volume of five million a year.
People-to-people exchanges are flourishing. With a special focus on education, health, culture, poverty alleviation and other areas bearing on people’s lives, we have carried out multiple cooperation projects to reach out to and benefit our people. Let me run through some of them. Through the China-initiated “Brightness Action” scheme, nearly 800 cataract patients in Cambodia, Laos and Myanmar have had their eyesight restored. Over the last two years, more than 12,000 students from the Mekong countries have received Chinese government scholarships and over 3,000 staff members have attended seminars or training sessions in China. The Lancang-Mekong Vocational Education Base was opened in Yunnan and has so far trained over 10,000 professionals for the Mekong countries. The University Friendship Games in the Lancang-Mekong Region, held in Yunnan last May, was a great success in fostering understanding and friendship between our young people.
In short, the LMC has made a good start, seen rapid growth and delivered extensive benefits, showing strong vitality. This is down to our cooperation philosophy of development first, equal consultation, pragmatism and efficiency, and openness and inclusiveness. Let me briefly address each of these in turn.
Development first demonstrates the high priority we place on development in promoting the LMC. Our efforts should be focused on cooperation and development and on boosting each other’s development by leveraging our economic complementarity. In this process, care should be taken to protect the broader interests of development and cooperation from any issues or challenges that may arise.
Equal consultation reflects our belief in the equality of countries regardless of their size, strength or wealth. We should always consult each other and fully accommodate each other’s comfort level in advancing cooperation, rather than attaching any political strings or imposing one’s own will upon others.
Pragmatism and efficiency underscore our results orientation. Our cooperation should be measured by how many projects we are able to undertake. We need to cut red tape and readily make special arrangements where need be. Instead of highbrow orators, we would rather be down-to-earth doers who can make a real difference for our people.
Lastly, openness and inclusiveness. We approach our cooperation with sincerity and an open door. As we have no intention to form any exclusive club, we are open to any initiative or mechanism that serves development in the region.
As we can see, the LMC is rooted in our traditional friendship and built on our shared interests. It conforms to the trend of our times and the expectation of our people. It is most solidly-based and therefore can be most enduring. The three pillars of LMC dovetail with those of the ASEAN Communities. It would help narrow the development gap among ASEAN members, boost ASEAN integration, and complement China-ASEAN cooperation. It will not replace other sub-regional cooperation frameworks. Instead, it can develop side by side with the GMS and other mechanisms in a mutually reinforcing manner.
The world today is undergoing major development, transformation and adjustment. Peace and development remain the call of our times. The global economy is picking up. China and the Mekong countries are having sustained and robust economic growth. All these have brought the LMC new opportunities and vast potential for further development. We must seize the opportunities and build on the momentum with greater resolve, better coordination and more effective measures. It is time to steer the LMC from a phase of nurturing to one of further growth toward setting an example of sub-regional and South-South cooperation. To make that happen, let us work together in the following areas:
First, do a good job in water resource cooperation. Water is essential to life, to production and to the environment. The Lancang-Mekong River has ample water resources to bolster economic and social development in our region. The key lies in our mutual trust, understanding and support. We need to have better upper- and down-stream coordination to take care of each other’s concerns and strike the right balance between the economy and the environment. Over the past 15 years, China has provided without fail hydrological data of the Lancang River during the flood season. Cascade development of hydropower in the Lancang River will not deplete the river; it can help adjust the water level in dry and rainy seasons. This would be conducive to the efforts by down-stream countries to fight floods and droughts.
To make sure that water resources are used in a sustainable way, we can work on a five-year plan of action for water resource cooperation, step up emergency response to droughts and floods, conduct joint research on water resources and climate change, and improve the monitoring system for water quality. China suggests that we make full use of the Water Resources Cooperation Center, hold the Water Resources Cooperation Forum, conduct more policy dialogue, information sharing and technical cooperation, and put in place a water resource cooperation platform that all of us stand to benefit from. Our cooperation came into being because of our shared river, and harnessing the river for our common good is essential to our future success.
Second, enhance industrial capacity cooperation including the building of water conservancy facilities. Given their rapid industrialization, urbanization and agricultural modernization, the Mekong countries are all in pressing need of more water conservancy infrastructure. For its part, China has cost-effective electrical equipment and construction capacity and a wealth of experience in building mega water conservancy projects, wells on plains, small- and medium-sized reservoirs in mountainous areas, which are well suited to the needs of the Mekong countries.
China supports its companies in undertaking hydropower plants, reservoirs, irrigation and drinking water projects in the Mekong countries. Such cooperation should follow the principle of sustainable development and aim at win-win results. In railway, highway, port, airport and communications, we also see vast prospects for industrial capacity cooperation. It is important that we implement the Joint Statement on Production Capacity Cooperation, and draw up a connectivity plan and a plan of action for industrial capacity cooperation. An alliance for the promotion of industrial capacity and investment cooperation among Lancang-Mekong countries and a Lancang-Mekong Business Council can be explored and established.
We need to join efforts in ensuring the success of existing economic, trade and cross-border cooperation zones while striving to set up new industrial parks based on distinctive local strengths. China proposes that we initiate the first phase of the BeiDou Positioning and Navigation Satellite Service System Construction and Civil Application Project in the Area of Lancang-Mekong River. While continuing to deliver the concessional loans and preferential export buyers’ credit it pledged at the first LMC Leaders’ Meeting, China will offer additional concessional loans and the second batch of special loans on international industrial capacity and equipment manufacturing cooperation to be used on agreed projects. In this connection, incentives on tax and land use by partner countries would be helpful.
Third, scale up agricultural cooperation. Agriculture is a key sector for all Lancang-Mekong countries in terms of ensuring food security and raising farmers’ income. China and the Mekong countries are important partners in agricultural cooperation. Mekong countries’ fruit exports to China have risen by 21% annually on average in the recent decade. Notwithstanding our trade deficit with the Mekong countries in agricultural produce, we will not go for protectionism. Rather, China is ready to import more quality agricultural products to meet the diverse consumer needs at home.
China supports its companies in carrying out downstream processing cooperation in the Mekong countries to raise the added value and competitiveness of agricultural products and jointly explore third markets. China is ready to deepen cooperation with the Mekong countries on agricultural science and technology, and work together to build joint agro-technology laboratories and technology demonstration centers, develop a set of standards for agricultural products, and implement key projects including artificial releasing and enhancement and insect control. China proposes setting up a Lancang-Mekong Agriculture Cooperation Center to serve as a platform for technological exchange, joint research and investment and trade cooperation. China will host the second LMC Village Head Forum in Yunnan, and welcomes the active participation of your countries therein.
Fourth, step up human resource cooperation. A well-educated work force is critical for faster development and poverty reduction in the Lancang-Mekong countries. We must turn our rich labor pool into a reservoir of high-caliber human capital. China is ready to enhance human resource cooperation with the Mekong countries to help train more urgently-needed professional talents.
This year China will provide the Mekong countries with 2,000 opportunities for short-term workshops and on-the-job education with degree or diploma and 100 scholarships for four-year undergraduate study. We will invite your medium and senior ranking officials to China for training courses in agriculture, medical and health care, water conservancy and other areas. China will also provide staff training courses for the national secretariats/coordination units of the five Mekong countries.
China proposes the setting-up of a joint working group on education to map out an overall plan for our cooperation in this field. We need to encourage our universities to conduct joint training programs and explore a mechanism for mutual recognition and transfer of study credits. Cooperation between vocational education institutions should be enhanced and China supports the opening of Lancang-Mekong vocational education centers in the Mekong countries.
Fifth, advance medical and health care cooperation. Good health is central to the happiness of each individual and the prosperity of every nation. The Lancang-Mekong region still faces a daunting task of tackling infectious diseases such as malaria, dengue fever, tuberculosis, and HIV/AIDs, which respect no national borders. China is ready to put in place joint prevention and control mechanisms for combating infectious diseases and carry out cross-border actions and programs with countries concerned. We need to build a malaria elimination network in the Lancang-Mekong sub-region to enhance the health security of this region. Chinese medical workers will continue to carry out free operation and treatment of patients with cataract, heart disease and dental defects in the Mekong countries through programs such as the Brightness Action, Love Heart Journey and Smile Action. We will also provide free eyesight tests and optometric services to local primary and middle school students of your countries.
China is ready to do what it can to help partner countries improve their medical and health care systems by building hospitals and public health institutions, formulating medical services programs, undertaking programs for women and children’s health, conducting joint medical research and promoting traditional Chinese medicine.
China will implement the “LMC targeted poverty reduction program”, which involves 100 medical and health care projects in the Mekong countries in the next three years. China welcomes people from the Mekong countries to China for physical checkup and medical services, and will offer help wherever possible.
As the Lancang-Mekong cooperation deepens, we must keep pace with the times. Building on the “three plus five” cooperation framework, we need to expand our cooperation on the digital economy, environmental protection, health, customs and youth to gradually enrich our cooperation through a “three plus five plus X” format.
We need to improve institution building. China suggests that a liaison mechanism be set up for the six national secretariats/coordination units and the possibility of an LMC International Secretariat be explored. The level of some joint working groups can be elevated as needed. To support our cooperation in practical fields, China is ready to start the annual application process for the LMC Special Fund in the first half of 2018. In addition, China suggests designating the week of 23 March, the date of the first leaders’ meeting, “the LMC Week” every year to publicize the LMC among our people.
China has benefited from a sound neighborly environment for its own development, and China in turn has been a source of stability and growth in its neighborhood. Over the past year, China’s economy has sustained a steady, upward momentum, posting a better-than-expected performance. GDP growth for 2017 is expected to reach about 6.9%. Surveyed unemployment rate in big cities is at a many-year low. Consecutive declines in imports and exports for the past two years have been reversed. A visible upturn has been registered in fiscal revenue, household income and corporate profits. The bond, stock and housing markets have been stable. Foreign exchange reserves continue to increase. Corporate leverage ratio has stabilized with modest decline.
Such sound performance of the Chinese economy can be attributed to our supply-side structural reforms, the introduction of new approaches to macro economic regulation, and the fostering of new drivers of growth, as we have refrained from employing massive stimulus. The Chinese economy has shifted from high-speed growth to high-quality development, a stage featuring a stronger role of innovation, fast upgrading of the consumption and industrial structures, coordinated regional and urban-rural development, and new progress in the all-round opening-up. This is a time of tremendous opportunities in terms of market, growth, investment and cooperation. As a Chinese proverb says, “One gets a better view of the moon-rise on the lake from a waterfront location.” By the same token, China’s neighboring countries, the Mekong countries in particular, will be better-placed to gain earlier and greater benefits from China’s development.
We the Chinese believe that action speaks louder than words. Our friends in Cambodia often say, ten talkers are no match for one doer. Let us act together to nurture the flowers and harvest the fruits of the Lancang-Mekong cooperation. Through our efforts, the seedling of our cooperation will grow into a towering tree, and we will embrace an even brighter future of sub-regional cooperation.