OPENING OF THE PACIFIC ISLANDS FORUM TRADE OFFICE

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Beijing, People’s Republic of China September 11, 2002

STATEMENT

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Mr. W. Noel Levi, CBE Secretary General Pacific Islands Forum Secretariat Suva, Fiji

Excellencies, Distinguished Ministers, Senior Officials of the Government of the People's Republic of China, Representatives of the Private Sector and Guests from the Forum Member Countries and International Institutions, Ladies and Gentlemen.

1. I am honoured and privileged to have this opportunity to welcome and address you all this evening. The occasion is of twofold importance -- firstly it is the Official Opening of the Pacific Islands Forum Trade Office, in the heart of the People’s Republic of China, and secondly the opening of the Pacific Heads of Investment Promotion Agencies Meeting, which starts tomorrow.

2.        I extend a warm welcome to the representatives of the Government of the People’s Republic of China, members of the diplomatic corps, representatives of the private sector and all of you who have an interest in the Pacific Islands region. I also extend a special and warm welcome to those who have traveled to Beijing from abroad, particularly my colleagues -- Heads of the Pacific Investment Promotion Agencies, country representatives and resource persons including the representative from New Caledonia.

3.        The gathering this evening is historical to us from the Pacific Islands Forum since it represents yet another landmark achievement in the growing relationship between the People's Republic of China and the member countries of the Pacific Islands Forum. This occasion also holds a special place within me, as earlier on during my career, I had the honor and privilege to open PNG’s Embassy in Beijing in early 1988.

6. Let me begin by congratulating China once again on its entry into the WTO. This is an important link that the Forum Island Countries and China, have in relation to international trade. Three Forum Island Countries namely, Fiji, Papua New Guinea and the Solomon Islands, are members of the WTO, whilst three others, Samoa, Tonga and Vanuatu, are working on their accessions.

7. We believe that the constructive exchanges of our experiences as new and acceding WTO members is useful in supporting one another in the WTO process. In this regard, we therefore look upon China to support the concerns of small and vulnerable economies like ours in the Pacific, especially in relation to the development of the Small Economies Work Programme that was mandated at the Doha WTO Ministerial Meeting late last year. We further look forward to China’s support at the WTO and the United Nations in progressing our interests.

8. The newly established Pacific Islands Forum Trade Office in Beijing marks the culmination of nearly a decade of consultations between the People’s Republic of China and the Pacific Islands Forum. The commitment of the People’s Republic of China to the development of our region is evident from the support we received on a number of projects in a wide range of economic sectors throughout the region over the past years. That support climaxed in 2000 when China pledged and established a US$ 3 million China-South Pacific Cooperation Fund, which is to be disbursed over five years. That Fund has enabled the establishment of the Pacific Islands Forum Trade Office, the opening of which we are here to witness. We thank China for this generous assistance.

9. Some may be wondering why the People’s Republic of China, with a population of some 1.3 billion, is a partner of a group of Pacific Island States whose members include tiny island states, one of which has a dwindling population that now stands under two thousand. On the other hand, some could also be questioning the wisdom of small island states in the region trying to strengthen their association with a large country like China.

10. Aside from population, geographical areas and the relative sizes of our economies, we do share a lot of things in common. An important factor in this relationship is that Pacific Island Countries and China share the Pacific Ocean. This Ocean has enabled centuries of direct and indirect trading links between China and our region. China, like many of the Forum Island Countries, is also a developing country that has a significant proportion of its population based in the rural areas and whose livelihood depends to a large extent on agriculture.

11. At the regional level, China and the Pacific Islands Forum are already cooperatively engaged with the Asia Pacific Economic Cooperation (APEC). The Forum's APEC Observership has been useful and beneficial to our Members, particularly in policy and trade facilitation-related aspects of trade and investment. I therefore wish to thank China for the active part it plays in the APEC process, especially last year when it presided as the APEC Chair.

12.     Given China’s increasing investment in fixed assets which we understand reached US$ 393.9 billion during 2000, roughly 9% higher than in the previous year, it is not unreasonable to expect a corresponding growth to the outflow of Chinese investments. The Pacific Islands Countries will be more than happy and satisfied with less than 1% of this outflow of China’s investment into our region.

13.     We look forward to capture China’s investment in the development of small and medium enterprises (SMEs), preferably in joint venture partnerships. This kind of arrangements will be most appropriate for the transfer of capital, technology, and not to mention the creation of employment in our member countries.

14.     Possibilities that might be investigated include downstream processing of agricultural products such as coffee, cocoa, coconut products and minerals like copper. We also hope to make use of your expertise to help improve the quality of life of people living in the rural areas, particularly in rural electrification, in recognition of your expertise in the construction of small dams for hydroelectricity generation.

15.     As we understand, China’s global trade during the year 2000 reached US$ 474.3 billion, 31.5% higher than in the previous year. This comprised exports valued at US$ 249.2 billion and imports of US$ 225.1 billion, both of which were up by 27.8% and 35.8%, respectively.

16.     In the Pacific, except for the Federated States of Micronesia, Niue and Tuvalu, the rest of the Forum Island Countries are officially recorded with the People's Republic of China Customs statistical authorities as having trading links with China.

17. On tourism between China and the Pacific Islands Forum Countries, we see good potential given the fact that China is regarded as one of the world’s fastest growing outbound visitor markets. Pacific Island Forum Countries would be keen to explore China’s "preferred destination status" policy to be able to take advantage of the potential for tourism cooperation with China.

18.     Forum Island Countries admire China’s extraordinary economic performance and wish to maximise the benefit of your success by forging closer and cooperative links in the areas of raising our share of market as well as in tourism.

19. Whilst some may see these as close to being impossible, we applaud the Chinese Government for its part in financially supporting the establishment of the Pacific Islands Forum Trade Office. As we are all aware, China's domestic economy has performed well, with continued improvement to the quality of growth. Its Gross Domestic Product (GDP) exceeded US$ 1,000 billion in 2000, representing an 8% growth in real terms. The medium term forecast is for a real GDP growth of 7% up to the year 2005. Thus China is poised to become one of the world's leading economies and as a result, we firmly believe that there are opportunities for growth in trade, investment and tourism flows between China and the Forum Island Countries.

20. Fishing and tourism sectors of most of the Forum Island Countries provide potential for further foreign exchange earnings and investment, whilst good opportunities also exists in the agricultural, forestry and mining sectors of our larger members. Manufacturing, especially in labor-intensive industries and the services sector also offer prospects that would be attractive to potential traders and investors. These opportunities will be pursued by the Pacific Islands Forum Trade Office and will also be promoted by the Heads of Investment Promotion Agencies, who will be participating in their sixth annual meeting tomorrow and on Friday, here in Beijing.

21. The Heads of Investment Promotion Agencies returned this afternoon from Fujian Province and I am pleased to report here the success of their visit to the China International Fair for Investment and Trade and participation in an investment promotion seminar in Xiamen yesterday. Another promotional seminar is scheduled for tomorrow evening in Beijing at the Great Dragon Hotel and I would encourage, particularly the private sector representatives present here today to attend the seminar.

22. The Pacific Island Countries as you can see have not adopted a 'sit back and relax' attitude as the pressures of globalisation have increasingly intensified. The Pacific Island Countries Trade Agreement (PICTA) is expected to come into force by the end of this year, thus facilitating a transition to freer trade amongst the Forum Island Countries. The Pacific Agreement on Closer Economic Relations (PACER), which will further strengthen ties between the Forum Island Countries and our two developed members, Australia and New Zealand will come into force by end this month. In the meantime, policy reforms consistent with international norms are also being pursued.

23. Some twenty years ago, numerous Asian manufacturers relocated their businesses to the region, particularly Fiji. They were successful and many of them are still in operation today. Their relocation followed the non-reciprocal duty free access granted by Australia and New Zealand to goods and services produced in the Forum Island Countries. Once PICTA is implemented, it is expected that over the next 10 years, the 14 Forum Island Countries would have been integrated into an enlarged and single market …a development that should be attractive to Chinese SME manufacturers, service providers and other entrepreneurs. I therefore wish to reaffirm here that the region's business environment is improving and will become better than ever before as we continue to learn lessons from past experiences and apply them for the betterment of our future.

24. Ladies and Gentlemen, the date September 11 is one that the world will not easily forget since it was exactly one year ago today when terrorist attacks destroyed the World Trade Center and claimed thousands of lives in New York City alone. On the anniversary of that tragic event we sympathise with the families of those who perished and suffered. Let us however not be discouraged by such tragic events. For the people and Governments of the Pacific, today will always be remembered as the day we embarked on a new chapter in our trade and investment relationship with the People’s Republic of China.

25.     In closing, I wish to express my most sincere appreciation for the support and the hospitality that the Government and the people of the People’s Republic of China have accorded to us from the Pacific Islands. To add to the uniqueness of this gathering, as I mentioned in the beginning we are here to officially open firstly, the Pacific Islands Forum Trade Office, and secondly, we are here to open the annual meeting of the Heads of Investment Promotion Agencies, which begins tomorrow.

26.     Though such a series of engagements may not be conventional, please let me assure you that they will mark the beginning of a new era of engagement in trade and investment between China and the Forum Island Countries. We look forward to the continued strengthening of our valued relationship as well as to the successful operations of the Trade Office and a successful conclusion of the Heads of Investment Promotion Agencies Meeting.

27. It is therefore a privilege and honour for me to declare firstly the Pacific Islands Forum Trade Office officially open; and, secondly I also have the pleasure to formally declare open the Sixth Heads of Investment Promotion Agencies Meeting, which commences tomorrow.

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