Since you are all interested in such issues as the direction of China's development and China's policy orientation, let me take this opportunity to share with you some of my thoughts in this regard.
-- China's economy will stay on a steady course with fairly fast growth. The Chinese economy is still operating within a proper range. It grew by 7 percent in the first half of the year, and this growth rate remains one of the highest in the world. This has not come by easily given the complex and volatile situation in the world economy. At present, all economies are facing difficulties, and our economy is also under downward pressure. But this is only a problem in the course of progress. We will take coordinated steps to achieve stable growth, deepen reform, adjust structure, improve livelihood and prevent risks, while strengthening and innovating macro regulation to keep the growth at a medium-high speed. Currently, China is continuing to move forward its new type of industrialization, digitalization, urbanization and agricultural modernization. China has a high savings rate, a huge consumption potential, a hard-working population and a rising proportion of middle-income people. This creates an enormous space for the services sector and offers a big market with great potential. China will focus more on improving the quality and efficiency of economic growth and accelerating the shift of growth model and adjustment in economic structure. We will lay greater emphasis on innovation and consumption-driven growth. In this way, we will solve the problem of unbalanced, uncoordinated and unsustainable development and enable the Chinese economy to successfully transform itself and maintain strong momentum of growth.
Recent abnormal ups and downs in China's stock market has caused wide concern. Stock prices fluctuate in accordance with their inherent laws. And it is the duty of the government to ensure an open, fair and just market order and prevent massive panic from happening. This time, the Chinese government took steps to stabilize the market and contain panic in the stock market and thus avoided a systemic risk. Mature markets of various countries have tried similar approaches. Now, China's stock market has reached the phase of self-recovery and self-adjustment. On 11 August, China moved to improve its RMB central parity quotation mechanism, giving the market a greater role in determining the exchange rate. Our efforts have achieved initial success in correcting the exchange rate deviation. Given the economic and financial situation at home and abroad, there is no basis for continuous depreciation of the RMB. We will stick to the purpose of our reform to have the exchange rate decided by market supply and demand and allow the RMB to float both ways. We are against competitive depreciation or a currency war. We will not lower the RMB exchange rate to stimulate export. To develop the capital market and improve the market-based pricing mechanism of the RMB exchange rate is the direction of our reform. This will not be changed by the recent fluctuation in the stock market or the foreign exchange market.
-- The key to China's development lies in reform. Our reform is aimed at modernizing the country's governance system and governance capabilities, so that the market can play a decisive role in the allocation of resources, the government can play a better role and there is faster progress in building the socialist market economy, democracy, advanced culture, harmonious society and sound environment. At the third Plenary Session of the 18th Party Central Committee in 2013, we decided on an overarching plan for deepening reform featuring over 330 measures. In 2014, 80 major reform items were by and large completed. In the first half of this year, we rolled out over 70 key reform programs, with their effects gradually becoming evident. When it comes to the toughest reforms, only those with courage will carry the day. We have the resolve and the guts to press ahead and take reform forward. We will stick to the direction of market economy reform and continue to introduce bold and result-oriented reform measures concerning the market, taxation, finance, investment and financing, pricing, opening-up and people's livelihood.
-- China will never close its open door to the outside world. Opening-up is a basic state policy of China. Its policies of attracting foreign investment will not change, nor will its pledge to protect the legitimate rights and interests of foreign investors in China and improve its services for foreign companies operating in China. We respect the international business norms and practices of non-discrimination, observe the WHO principle of national treatment, treat all market players including foreign-invested companies fairly, and encourage transnational corporations to engage in all forms of cooperation with Chinese companies. We will address legitimate concerns of foreign investors in a timely fashion, protect their lawful rights and interests and work hard to provide an open and transparent legal and policy environment, an efficient administrative environment and a level playing field in the market, with effective ID protection in particular, so as to broaden the space of cooperation between China and the United States and other countries.
-- China will follow the basic strategy of the rule of law in governance. "Law is the very foundation of governance." We will coordinate our efforts to promote the rule of law in governance and administration, put the building of the country, the government and society on the solid basis of the rule of law, build greater trust in the judicial system and ensure that human rights are respected and effectively upheld. China will give fair treatment to foreign institutions and foreign companies in the country's legislative, executive and judicial practices. We are ready to discuss rule-of-law issues with the U.S. side in the spirit of mutual learning for common progress.
China is a staunch defender of cybersecurity. It is also a victim of hacking. The Chinese government will not, in whatever form, engage in commercial theft or encourage or support such attempts by anyone. Both commercial cybertheft and hacking against government networks are crimes that must be punished in accordance with law and relevant international treaties. The international community should, on the basis of mutual respect and mutual trust, work together to build a peaceful, secure, open and cooperative cubers. China is ready to set up a high level joint dialogue mechanism with the United States on fighting cybercrime.
China recognizes the positive role played by foreign non-profit organizations (NPO). So long as their activities are beneficial to the Chinese people, we will not restrict or prohibit their operations but will protect their operations through legislation and protect their legitimate rights and interests. On their part, foreign NPOs in China need to obey Chinese law and carry out activities in accordance with law.
-- China will continue fighting corruption. As I once said, one has to be very strong if he wants to strike the iron. The blacksmith referred to here is the Chinese Communist Party. The fundamental aim of the Party is to serve the people heart and soul. The Party now has over 87 million members, and unavoidably it has problems of one kind or another. If we let these problems go unchecked, we will risk losing the trust and support of the people. That is why we demand strict enforcement of party discipline as the top priority of governance. In our vigorous campaign against corruption, we have punished both "tigers" and "flies", corrupt officials irrespective of ranking, in response to our people's demand. This has nothing to do with power struggle. It's nothing like what you see in House of Cards. China is ready to cooperate closely with international community in fighting corruption and tracking down fugitives. The Chinese people look to the U.S. for support and coordination so that corrupt elements will be denied an overseas "safe haven".
-- China will keep to the path of peaceful development. We have just commemorated the 70th anniversary of the victory of the Chinese People's War of Resistance against Japanese Aggression and the World Anti-Fascist War. An important lesson history teaches us is that peaceful development is the right path, while any attempt to seek domination or hegemony through force is against the historical tide and doomed to failure. The Chinese recognized as early as 2,000 years ago that "though a country is now strong, bellicosity will lead to its ruin." China's defense policy is defensive in nature and its military strategy features active defense. Let me reiterate here that no matter how developed it could become, China will never seek hegemony or engage in expansion. To demonstrate our commitment to peaceful development, I announced not long ago that the size of China's military will be cut by 300,000. China is ready to work with other countries to build a new type of international relations with win-win cooperation at its core, replacing confrontation and domination with win-win cooperation, and adopting a new thinking of building partnerships, so as to jointly open up a new vista of common development and shared security.
As far as the existing international system is concerned, China has been a participant, builder and contributor. We stand firmly for the international order and system that is based on the purposes and principles of the UN Charter. A great number of countries, especially developing countries, want to see a more just and equitable international system, but it doesn't mean they want to unravel the entire system or start all over again. Rather, what they want is to reform and improve the system to keep up with the times. This would serve the common interests of all countries and mankind as a whole.
China has benefited from the international community in development, and China in turn has made its contribution to global development. Our "Belt and Road" initiative, our establishment of the Silk Road Fund and our proposal to set up the Asian Infrastructure Investment Bank (AIIB) are all aimed at helping the common development of all countries rather than seeking some kind of spheres of political influence. The "Belt and Road" initiative is open and inclusive. We welcome participation of the U.S. and other countries and international organizations. We have vigorously promoted economic integration in the Asia Pacific and the Free Trade Area of the Asia Pacific in particular, because we want to facilitate the shaping of a free, open, convenient and dynamic space for development in the Asia Pacific. We call for an outlook of common, comprehensive, cooperative and sustainable security, because we want to work with other countries in the region and the rest of the international community to maintain peace and security in the Asia Pacific.
