Dear Chief Executive Carrie LAM, Mr. Commissioner, XIE Feng, Ronnie CHAN, Excellences, Dear friends, 

It’s a great honour to be here, in HONG-KONG, to celebrate the 40th anniversary of China’s reforms. Let me first pay tribute to all the attendees and those who took the time to set up this conference focused on China’s trade and political expansion across the world.  

Never before has such a meeting been more useful than today. Because in a time of distrust, fuelled by rising protectionism and populism, praising openness and dialogue is both a sign of hope and commitment.  

Today, China offers a model of balance and stability. But we all know that the path taken so far has been full of uncertainties that required determination and commitment.  

I- In only four decades, China has gone through a tremendous transformation of economy, society and global leadership 

- China’s miracle has not been a matter of chance. It’s above all the fruit of a long, comprehensive and ambitious strategy: 

· On the one hand, there is a man of vision we are gathered here to commend the pioneering reforms. The opening-up of China was the combination of three levers which are still available today: 

First, continuity: DENG Xiaoping was keen to reform by respecting the legacy of Chinese authorities since the founding of the People’s Republic; 

Second, ambition: these reforms were promoted with the willingness to position China as a global power of the 21st century; 

Third, imagination: who could have anticipated such a rise of China that represented less than 2 % of global economy at this time?  

· On the other hand, there is a tangible impact. Chinese modernization has been rapidly followed by historic progress: 

Economically, the country achieved a dramatic growth of more than 10 % per year from 1978 to 2011 while multiplying national GDP by 80; 

Politically, China gained ever more legitimacy on the worldwide stage as a strong partner and promising player in global affairs; 

Culturally, Chinese projection abroad has also spread at an ever-faster pace: we can see that in many areas like global universities, think tanks as well as in the art market.  

- But this transformation has also incurred social costs. Today, China is facing critical challenges on the path of stability: 

· The expansion of the GDP has created big threats to nature, society and economy: 

It is the case with the soaring debt that now reaches around 30 trillion dollars; 

It is the case with health and nature which have been increasingly put under pressure by China’s industry. Today, China accounts for 30 % of global greenhouse gases, even if progress has been exceptionally fast with a 46 % reduction of greenhouse gases per GDP units since 2005; 

It is also the case with social organization with the growing pressures of urbanization.　 

· But in all these areas of instability, China has become aware that change was needed to break up the negative spiral of risk 

First, China is initiating a change of growth model with the transition from an exports-based economy to a GDP stimulated by domestic demand and high-quality growth: it’s all about boosting innovation and high technology as promoted by the “Made in China 2025 program”; 

Second, China is giving a dynamic impulse to eco-friendly energy and environmental protection: with around 130 billion dollars in renewable energy last year, China has become the largest investor in this sector; 

Third, the Chinese need of more stability led the country to enhance regulation, especially in finance with the creation of a super regulator, in last April. 

- The economic expansion of China is based on a culture of results and initiatives: 

· Over the last decades, providing people with concrete changes has been the main objective of political authorities: 

China strove to broaden collective well-being by reducing poverty and exclusion: in forty years, around 700 million people were gradually pulled out of poverty; 

Concrete signs of success are also tangible in political stability and social progress with unprecedented expansion of middle classes; 

· Pragmatism and long-term vision have long been the motors of China’s effectiveness in transforming the country and the world: 

The Chinese dream put forward by President XI gave the opportunity to set priorities for the new era, starting with the ambition to become a global innovation leader by the 2030’s; 

Today, this culture of results is seen from abroad as a source of inspiration: China tends to be a model for many countries in Latin America or Africa where the combination of economic openness with the respect of national sovereignty offers an alternative way of development.  

II. In the last decade and especially since 2012, China has entered a new phase of its reforms, opening a three decades endeavour of global responsibility and recognition 

- The last decade has witnessed the growing commitment of China in global governance under the presidency of Xi Jinping: 

· China successively entered the main economic institutions as a major pillar of global prosperity 

It’s true in the WTO where Chinese integration in 2001 has been a great progress for global trade; 

It’s also true in the IMF where the recognition of the Renminbi as an international currency in 2015 has been a new step forward. 

· But China also took a rising responsibility in building a more peaceful and stable globalization: 

We can see that within the United Nations where China became the first provider of peace-keeping forces among the Permanent Members of the Security Council; 

We can also see that in the fight against pollution as shown by China’s commitment to building a more sustainable world with the 13th five-year plan.  

- The Belt and Road initiative is a signal of China’s ambition to internationalize its economy and take responsibility in the global balance of powers: 

· I really do believe that this project outlined five years ago by President XI Jinping could have a massive impact on the future of cross-border stability. The New Silk Road is both a comprehensive and international initiative: 

First, it’s a political game-changer keen to develop remote areas like Central Asia and Africa while stimulating dialogue between States and people. The creation of the AIIB in 2015 is a strong sign of commitment to multilateral cooperation; 

Second, it’s an economic game-changer betting on sustainable sectors such as energy, transport, digital industry and infrastructures. Only in Asia, the need of investment to create infrastructure would be around 26 trillion dollars by 2030;  

Third, it’s a cultural game-changer promoting mutual understanding and diversity.  

· I am also convinced the Belt and Road initiative is enabling China to enter a new age of economic globalization: 

First, China’s take-off has occurred in the age of trade and industry: from 1978 to 2013, China has become the largest trading nation thanks to massive exports of manufactured products; 

The second milestone of China’s rise has been the age of investment: in 2015, for the first time in history, Chinese investment abroad has been higher than the incoming flow of capitals with a volume of 150 billion dollars overseas; 

Today, China is entering the age of partnerships: the ability to build up connections between States, people and companies will be key to achieve the New Silk Road on a cooperative basis.  

III. In a time of rising threats and global divisions, China’s reforms can show the way of global reforms based on initiative and cooperation. We need to address the risks through common solutions.  

- We should not underestimate the risk of a global confrontation. Risks have heightened in recent years and we are all living in a dangerous environment. China and America have now entered a time of strategic rivalry in all fields which is a major threat of instability for the rest of the world and for each one of them: 

· On security issues in Asia, misunderstandings are rising and lead more and more to strategic stand-offs: 

These tensions could spiral into open conflict if there is not a mechanism of global security cooperation comparable to what had to be invented during the Cold War after 1961; 

But this cannot be done alone by China and the United States. I strongly believe a lasting solution needs to integrate the European Union as a global partner of security and stability; 

· On trade, currency and economy, we need to find compromises and long-term solutions, but this relies on an efficient dialogue and guarantees of stability as well as monitoring of the implementation of common decisions: 

We cannot base a policy endangering the whole world’s trade on series of tweets; 

Here also, I believe Europe needs to be part of a discussion that could, within the WTO, represent a large majority of the world’s trade flows.  

-A second risk is a new meltdown of the economic engine of globalization. Everyone knows there will be a new credit crisis. The only questions are when and where?　 

· We need more anticipation and more capacity of reaction, because we know that this time, we will have fewer margins of manoeuvre in terms of classic responses, as interest rates remain extremely low in Europe or Japan. When the next crisis hits, we need “financial firemen’ with the capacity to mobilize large funds to create localized and coordinated stimulus of industry and consumption;  

· We need more planification on the global scale in terms of financial stability to avoid the exchange rate crisis we witness in Turkey or Argentina: 

The system that was created unintentionally in 1971 by repealing the convertibility of the dollar in gold is deeply flawed and has led during the forty last years to more intense currency exchange crisis than ever before; 

I believe a strong system of the three major currencies, dollar, renminbi and euro through strong cooperation of the central banks would allow to create trust and support global growth. That’s why I wish the G20 could set an agenda to organize a mechanism of structured dialogue as a G3 of Central Banks. 

- The third risk is the threat of isolationism and selfishness:  

· First, because selfishness is contagious. It is a classic prisoner’s dilemma where the belief in a zero-sum game shifts to a loose-loose game.  

· Isolationism is also a risk because it lets local crisis prosper, waiting for another power to take the risky and costly initiatives. But, as the case of Syria shows, crisis easily get out of control and crisis always beget more crisis: 

Syria was first a political division within Syria, then a Civil War, then a Regional War and finally a battlefield of rival global powers. We cannot allow this to happen again. I believe today China can show the way to renewing the spirit of the UN in a moment of deep crisis of the multilateral institutions; 

I believe China could become a provider of solutions by taking joint initiatives of resolution in the Security Council with France and Great Britain on specific crisis, for example in Africa. This would be a major signal to the world. 

· Isolationism, last of all, creates a world without common rules. And without rules, we are without confidence in the future. The Brexit has shown the risks of trying to free oneself from common discipline. That’s why I believe common regulation is the way forward to organize our complex globalization: 

If China and Europe don’t become rule-setters, jointly with the United States when they will be ready to join, we will all become rule takers; 

We should, Europe and China, make propositions in many areas like data protection and environment preservation with shared and concrete guidelines.　 

If we don’t act, in each major country and all together, these roadblocks will endanger all the achievements of the past 

Ladies and gentlemen, Excellences, 

Forty years after economic reforms have been successfully launched, we can learn the lessons from Chinese opening-up. The first lesson is that there is no change without a long-term ambition rooted in pragmatic and gradual projects. The second one tells us that openness and cooperation are crucial in building development.  

But let me conclude with a prospective view: since the 1980’s, the world has been increasingly surprised by the rise of China. Over the coming forty years, my conviction is that we’ll be ever more struck by its ability to keep on surprising. 

Thank you.