Osaka, Japan

19 November 1995

Your Excellency Prime Minister Tomiichi Murayama,

Excellencies,

I am very pleased today to join my friends, both old and new, in this beautiful city of Osaka to discuss matters of vital importance relating to Asia-Pacific economic cooperation. I wish to express my heartfelt thanks to Prime Minister Murayama for his kind invitation and to the Japanese Government for its thoughtful arrangements for the meeting.

Developing countries play an increasingly important role in regional and global economic activities. Their economic revitalization is of major significance to the common prosperity not only in the Asia-Pacific region, but the world at large. In discussing Asia- Pacific economic cooperation, we need to put the issue of development of the developing countries into a large picture with a historical perspective.

To seek development amidst peace and stability is a matter of top priority for the world today. As economic life become more and more internationalized, economic links between and among states have been growing with each passing day. Production patterns, investment flows, financial exchanges, science and technology, human resources development and environmental protection have all transcended national boundaries. The increase in world trade has far outpaced the growth of world economy. Technological revolution is sweeping across all trades and professions as economic activities grow steadily in scope and assume faster speed. Such a global economy can not sustain on the basis of prosperity of a few and backwardness of a majority of countries. The world economy needs new driving force. The world market needs fresh input. Without the economic revitalization in the majority of the developing countries, the world economy can not be sustained.

The developing countries, where the majority of world's population call home, hold out tremendous potential for development. Their current backwardness and poverty are caused mainly by the past colonial rule and the present unfair and irrational international economic system. More and more developing countries, going along with the trend of internationalization of the world economy and proceeding from their own national conditions, have embarked or are beginning to embark on a road of development with their own characteristics. Facts have proved that this is the only way to success. The coming century will see this trend grow even stronger. In my view, if the political resurgence of the developing countries is viewed as a major feature of the international evolution in the second half of the 20th century, then their economic revitalization will be a key hallmark of the new world pattern in the 21st century. When developing countries become prosperous with billions of people lifted from poverty, it will provide enormous opportunities for trade and investment for all countries. There will be more markets for new technologies and industries. It also helps to instill vitality into the global economy, propelling it onto a new development stage. Meanwhile, the revitalization of the developing countries will bring about a sound underpinning for the world pattern of multipolarization, provide conditions favorable to the establishment of a fair and rational new international economic order, and offer stronger safeguards to lasting world peace. In short, the growing economic prosperity of the developing countries will contribute significantly to the advancement of the human society.

We are pleased to note that since its inception six years ago, APEC has done much useful work in promoting consensus-building to enhance economic cooperation. Today, it has become a major force for enhancing regional and global economic cooperation. Last year, we adopted the Bogor Declaration, which reaffirmed our resolved to narrow the economic disparities among members and to promote common prosperity in our region. The Bogor Declaration also endorsed the long-term goal of achieving trade and investment liberalization and the strengthening of regional economic and technical cooperation. This has generated a far- reaching impact.

Regional economic cooperation and development have benefited directly from the vigorous high growth of the developing members of the region. The Action Agenda is an important document towards the gradual implementation of the Bogor Declaration. To ensure a smooth progress of cooperation, in my view, it is necessary to appropriately address the following questions:

1. Achieving a sustainable economic development in the Asia -Pacific and the world at large should be the fundamental objective of our cooperation. Economic development of the Asia -Pacific cannot be attained without the steady growth of the world economy, especially that of the majority of the developing members. Asia-Pacific economic cooperation must be open. Out of the two billion people in this region, 1.5 billion live in developing members, where the levels of economic development and technology remain relatively backward and a considerable portion of the population even live in poverty. Sustained regional and global growth is only possible with a sustained growth in the developing members and their economic gap with the developed members gradually narrowed. This should become the starting point as well as objective for our future cooperation.

2. Efforts should be made to create a favorable external environment for economic growth of the developing members. In retrospect, many developing members in the Asia-Pacific region owed their high growth, apart from their own efforts, to the favorable external conditions within the region. In recent years, however, the economy of the major developed members have experienced considerable fluctuations. Trade protectionism against the developing members have gone on unabated and the normal operation of the multilateral trade system has been disrupted. To ensure sustained and stable development of the region, major developed members should take the lead in addressing their structural imbalances. They should also do their very best to avert the possible negative impact of their macro-failure on the developing members. Mutual opening and non-discrimination are the basic norms recognized in international economic relations. APEC members should, first and foremost, take steps to abandon discriminative trade policies.

3. The principles of unilaterism and voluntarism should be adhered to. Regional economic cooperation should take into full consideration the differences in the level of development within the region and the special conditions of the members. In formulating targets of economic development and cooperation, it is necessary to respect the right of the members to make free decisions and allow for their own initiative and creativity. Unilaterism and voluntarism should also be observed when formulating regional collective actions. They should be the cornerstone underpinning Asia-Pacific economic cooperation. It is neither realistic nor feasible to impose uniformity when conditions are not yet ripe.

4. It is necessary to give due consideration to existing differences and to keep the process of trade and investment liberalization at a carefully-measured speed. Open and free trade and investment are effective vehicles to achieve sustained economic growth. We should allow different pace in light of the specific conditions of the members and at different periods of time. Developed members, which are advantageously placed may take the lead and move faster. Developing members, on the other hand need more time since they face greater pressures, risks and difficulties. As a Chinese saying goes, "More haste, less speed." Should the process of trade and investment liberalization in developing members be unduly quickened, it is possible to cause severe consequences in certain members. This will run counter to the very objective of trade and investment liberalization.

5. Trade and investment liberalization and economic and technical cooperation should be given equal emphasis. Economic and technical cooperation, including human resources development, infrastructure building, scientific and technological cooperation, is crucial to developing members' economic vitality. They are important means to narrow economic disparities among members and to achieve common prosperity. Economic and technical cooperation can also help turn potential markets into real ones which in turn will accelerate the pace of trade and investment liberalization. Economic and technical cooperation are like two wheels carrying the cart of APEC. The two should complement and promote each other.

The realization of the long-term goals as set forth in the Bogor Declaration requires our persistent efforts into the 21st century. This gigantic project of cooperation tallies with the trend of the world economy. It also serves the need of our reform, opening-up and economic development. After the meeting in Bogor, we have adopted a series of important measures aimed at deepening the reform. I wish to announce here that China will, effective from 1996, drastically reduce its overall tariff level by a margin of no less than 30%. This certainly will have a positive impact on regional cooperation and the achievement of trade and investment liberalization.

We have on our shoulders a historical mission of building a peaceful, stable and prosperous Asia-Pacific. I believe that so long as we respect each other, consult each other on an equal footing and engage in mutually beneficial cooperation, we will be able to achieve our goal.

Thank you.