 It is my great honor to welcome His Excellency Liu He, a newly elected member of the Political Bureau of the CPC Central Committee, and General Office Director of the Central Leading Group for Financial and Economic Affairs. 2018 marks the 40th anniversary of China's opening and reform policy. Your Excellency, with your presence here, we also celebrate the kind of jubilee. As it marks the 40th consecutive year that I have the pleasure of welcoming China's leadership to the annual meeting here in Davos. And I would like to thank you, the Chinese government, the Chinese business leaders, for the strong partnership we have established over the last four decades. As you all know, Liu He has been a key economic advisor to President Xi Jinping and has played an instrumental role in drafting some of the most fundamental economic policies in China. We are very privileged to have this unique opportunity to hear from you about China's future development and reform priorities, as well as your perspective on the global economy. Our forum community certainly will recall the historic speech of President Xi Jinping last January, which many participants felt was a turning point in China's relationship with the world. During the year, at other important global meetings like the Belt and Road Forum, the G20, and APEC, President Xi continued to further develop many points which he raised in his Davos speech, culminating in his remarks to the 19th Party Congress in which he outlined his great vision for China's new years. China impressed us again with its robust growth rates of 6.9% in 2017. However, the challenges ahead for China's economy can also not be underestimated, as it simultaneously shifts the current mix of industrial sectors at the same time investing into the development of new technologies to become a leader in new technologies and the creation of future industries in order to leapfrog ahead. China's future is intrinsically linked to the fate of the global economy marked ever increasingly by, unfortunately, protectionism and looming the looming threat of trade wars. So far, I'm particularly delighted, grateful to have you here, Mr. Liu here, after the presentation of President Xi Jinping last year to hear your perspectives, what has changed, if anything has changed, and what is the future. I invite you to take the floor. Dr. Klaus Schwab distinguished guests, ladies and gentlemen, dear friends, good morning. Let me begin by thanking Dr. Schwab for inviting me to the forum. President Xi Jinping came here last year and delivered a speech entitled, jointly showed a responsibility of our times, promote global growth, in which he expounded on China's firm support for economic globalization. That speech was warmly received by the international community. Over the past year, in line with the propositions of President Xi, China has stood firm against all forms of protectionism. We have worked to strengthen the protection of property rights and promote fair competition. Just as important, we have broadened access to our financial markets and taken the initiative to increase imports. With efforts to advance the Belt and Road Initiative, we are moving economic globalization forward with concrete actions. Dr. Schwab asked me to talk about the 19th National Congress of the Communist Party of China and China's economic policy for the next few years, so let me make the following observations. The 19th Party Congress established China's new central leadership with President Xi at its core. And the Xi Jinping thought on socialism with Chinese characteristics for a new era was adopted as the guide to China's development. It mapped out the objective to complete the building of a moderately prosperous society in all respects by 2020 and to turn China into a great modern socialist country in two steps by 2050. It also charted the cause for China's economic policy over the next couple of years. The report of the 19th Party Congress, in my opinion, is a highly transparent policy agenda. It lays out the promises that will be delivered to the Chinese people. The fulfillment of this agenda will also bring about new opportunities for the development of other countries in the world. So, ladies and gentlemen, I recommend this report to those of you who are keen to learn more about China's future policies. This top level planning of China's economic policy for the next few years is designed in light of the above mentioned objectives. In a nutshell, this policy centers around a key necessity, a main task, and three critical battles. Let me explain one by one. The key necessity here is that China's economy has been transitioning from a phase of rapid growth to one of high quality development. It is in this context that China formulates its macroeconomic, structural reform and social policies for the coming years. This transition is an inherent part of the cause of economic development. China's per capita income is moving up from the current level of 8,000-plus US dollars to 10,000 US dollars and even higher. At such a stage of development, China needs to put more emphasis on structural improvement rather than quantity expansion. Our focus needs to change from is there enough to is it good enough. As we open up wider to the outside world, this transition to a new model of development will create huge opportunities for many new industries. This may well include manufacturing and service industries related to higher quality consumption as well as energy efficient buildings, smart transportation, new energy and many other green and low carbon industries in new cities. It means new opportunities for businesses not just in China but across the world. And the knock-on effect on other industries will be even greater as it is about the modernization of the entire economy. It may involve hundreds or even thousands of industries and the products. In fact, changes are already taking place. Our domestic demand has steadily expanded with consumption contributing 58.8% to economic growth, nearly 4 percentage points higher than five years ago. The added value of the service sector takes up 60% of GDP, more than 5 percentage points higher than five years ago. And with more rural migrant workers settling down in cities, permanent urban residents have increased by another 80 million plus in the past five years, accounting for 58.52% of the total population, nearly 6 percentage points higher than five years ago. Meanwhile, China's energy intensity, a measure of energy consumption per unit of GDP, has fallen by 23.9%. The main task is to advance supply side structural reform. The principal contradiction in China's economic development is that our supply side fails to evolve in step with the demand, resulting in a structural mismatch that urgently needs to be fixed. To improve the quality of the supply side through reform is the basic pathway leading to high quality development. The priority at the moment is to cut excess capacity where necessary, reduce inventory in the housing sector, bring down the overall leverage ratio, lower cost across the board, and strengthen the weak links in the economy, ranging from public services to infrastructure and institutions. With these measures, we hope to make the supply side more adaptable and more innovative. Some initial progress has already been made. Since 2016, we have cut over 115 million tons of steel capacity, eliminated an additional 140 million tons of substandard steel capacity, and phased out over 500 million tons of coal capacity. We have adjusted the supply-demand relationship through market clearing, which has led to price rises in some sectors. As we can see, total factor productivity growth stopped its decline and began to increase in 2016. The positive spillover of our supply side structural reform is being felt across the world, and we can see the changes in commodity prices across the world. Indeed, this is a reform that we must continue and see through. The three critical battles which China is determined to fight include one, preventing and resolving the major risks, two, conducting targeted poverty reduction, and three, controlling pollution. As we know, if a bucket is to hold more water, its shortest plank must be made longer. Likewise, for China to build a modesty prosperous society in all respects, we must fix the shortest plank in our development through winning these battles. First, we need to continue to prevent and resolve major risks in China's economy, including financial risks. Shadow banking and hidden debt for local governments are serious problems we have to deal with. We will continue to make progress while maintaining stability. In about three years' time, we will strive to bring the overall leverage ratio under effective control, make the financial system more adaptable, and better able to serve the real economy, prevent systemic risks, and facilitate better flow of economic activities. The international community is closely following this task, and we have full confidence and a clear plan to get the job done. Our strategy is to fix the problems on the way forward through reform and development, and our tactic is to pick up the most important issues and find solutions. We have many favorable conditions on our side. The Chinese economy is steadily turning for the better with enduring robust fundamentals. Huge potential remains to be tapped in urbanization, innovation, and the transformation of traditional industries. These mean many, many opportunities. Our financial system is basically sound with a high savings rate. We have already set out to properly handle a series of risks. Since the fourth quarter of last year, China has had a marginally slower overall leverage ratio growth, which is a good sign. In addition, strengthened risk awareness and changing market expectations on implicit guarantee or moral hazard have created important psychological conditions for us to prevent and control financial risks. I would like to highlight that the buildup of China's financial risks and our response to them are closely related to the changing global market. That's why we welcome the participation and the cooperation of the international community in China's endeavor to address financial risks as it is part and parcel of global efforts to uphold world economic stability. Second, China will continue with smarter, more targeted efforts to lift more people out of poverty. In the last five years under President Xi's leadership, we started an unprecedented campaign against poverty. As a result, the number of rural residents living in poverty dropped from nearly 100 million to around 30 million. That's a very big number of reduction. We have set a target to basically eliminate absolute poverty in three years, which means no single rural resident will be living below the current poverty line. This year alone, China will lift 10 million people from absolute poverty, including 2.8 million who will be relocated from areas suffering from harsh conditions. These poverty alleviation efforts have a major impact on the distribution of national income. Such efforts embody the Chinese approach to human rights and will contribute to the global cause of poverty reduction. Third, China will continue its fight against the pollution. Green and low carbon development is what the Chinese people and people across the world want the most in a break with the traditional growth model. In the next three years, China will scale up pollution control to substantially cut the total emissions of major pollutants and lower the intensity of resource consumption. Such efforts are expected to improve the environment. They will make our development more eco-friendly and our skies blue again. These are the concrete actions China will take to fulfill its pledges to counter climate change and especially to honour the Paris Agreement. China will stay committed to improving the environment and work more closely with the rest of the international community in this area. Ladies and gentlemen, there is no doubt that to achieve the goals I mentioned above, China has to advance reform and opening up at a faster pace as mentioned by Dr. Schwab. We will further reform and opening up in China. This policy is the very reason behind China's robust growth over the past four decades and will remain the key driving force to quality growth in the future. China will continue to let the market play a decisive role in resources allocation and we must focus on better protection of property rights, especially intellectual property rights. We will fully incentivise entrepreneurs, encourage competition and oppose monopolies. We will continue to improve the mechanisms for macroeconomic regulation. We will open wider to the world across the board. To be specific, we will further integrate with international trade rules and ease market access. We will also substantially open up the services sector, the financial sector in particular, and create a more attractive investment environment. We believe that to sustain economic growth, there must be open and inclusive institutional arrangements as well as orderly and free flow of production factors. We will encourage both inbound and outbound investment and business activities as we seek greater economic and trade interactions with other countries and work with them toward an open world economy. After decades of development, a large middle income population has emerged in China, the biggest in the world, giving rise to a vast domestic market. This open market with a faster growing middle income population of 400 million will contribute significantly to global development. The Belt and Road Initiative originated from China, but it is an idea that will deliver opportunities and benefits to the whole world. Better physical and the people-to-people connectivity will generate effective demand worldwide and sustain the momentum of global economic recovery. Ladies and gentlemen, the theme of this year's forum, Creating a Shared Future in a Fractured World, is highly relevant. The world economy is now picking up. Major economies are growing in sync for the first time since the global financial crisis. International trade and investment have bottomed out. A new cyclical upswing can be expected for the global economy. That said, at such a critical moment, we must focus on the spill-overs of the monetary policy of the world's major economies and the changes in the debt, equity and commodity markets in the short term. In the medium term, we need to pay attention to the improvement of labour productivity and the changes in savings rate in the large economies. Meanwhile, deep-seated problems in the world economy have yet to be fixed. Multiple risks and considerable uncertainties come in the form of high debts, asset bubbles, protectionism and the escalation of regional and international hard spots. To meet these challenges, to keep the growth momentum and to turn the cyclical recovery into sustainable growth, we need concerted global efforts. In the long course of human progress, one thing is clear. History often repeats itself in different ways or keeps revisiting similar crossroads. It is crucial to make prudent and rational choices, choices that will serve mankind well. When it comes to such global challenges as climate change, disruptive technologies and terrorism, no country can cope with them alone. We need to have an open mind and take a strategic perspective. We need to enhance mutual understanding, tolerance and trust, and we must see cooperation in a sensible and practical manner. We need to make economic globalisation more open, inclusive and balanced so that its benefits can be shared by all. We need to shape a new type of international relations featuring mutual respect, fairness, justice and win-win cooperation and build a community with a shared future for mankind. We believe this is the only way that will lead us to prosperity. As President Xi observed at last year's forum, as long as we keep to the goal of building a community with a shared future for mankind and work hand in hand to fulfil our responsibilities and overcome difficulties, we will be able to create a better world and deliver better lives for our peoples. I want to stress that China is a force for world peace developed development and the international order. China remains a developing country despite its economic progress. We will run our own business well, and on that basis we are ready to work with the rest of the international community to champion a vision for global governance that features extensive consultation, joint contribution and shared benefits. Together we will stand firm for multilateralism, for the multilateral trading regime and for common development and progress. Thank you for listening. Thank you all. Thank you, Dr. Schwab. Thank you. Thank you, Mr. Liu, for this reaffirmation following the significant speech of President Xi Jinping last year. This reaffirmation of commitment to a global open system, to a responsible role of China in a world which is based on multilateralism, which is based on further up, further opening up your country. So we are very grateful that you came here to reconfirm and to further develop the ideas which were presented last year. I have one question to conclude our session. Mr. Liu, you presented your excellency, you presented the policies for opening up, further opening up. What concrete measures will you undertake in 2018 in this respect? Thank you very much for your question. So may I answer your question in Chinese because there are In terms of opening up, Dr. Schwab, just now you raised the question in terms of the specific opening up policy of China. This is a very important question. As things stand, we will follow through on two things. First, we will implement the decisions made by President Xi Jinping last year. We will also deliver on the opening up decisions made by President Xi when he went back to China. And second, as we commemorate the 40th anniversary of reform and opening up, we will roll out new measures of reform and opening up. President Xi has made relevant decisions which will be focused on four areas. First, the opening up of the financial sector which is very important. Second, the opening up of manufacturing sector and some services. Number three, the production of property rights, particularly intellectual property rights. And number four, the increase of imports. This is the first point. Let me give you some explanations. First, the opening up of the financial sector. We have pledged further opening up measures in banking, securities and insurance sectors. As far as I'm concerned, many foreign friends want to know when these measures will materialize. Let me respond in a responsible manner. We will implement these measures one by one within this year. The earlier, the better. Second, the opening up of the manufacturing sector and some services. Based on the things we know at the moment, we will further strengthen opening up in terms of the manufacturing of ship, railway equipment, aircraft as well as in some services sector. And our basic measure is to remove or further reduce restrictions of foreign investment. We will adopt pre-establishment national treatment plus activist approach. Third, we will strengthen IPR production which is very important. In recent years, we have attached great importance to this issue and we have made great efforts. And our focus going forward is to further implement relevant measures. We are ready to work with international community to advance these efforts. For Chinese companies, we have strong desire for this. The international community are also paying great attention to our efforts in this field. Number four, we will increase imports. Last year, we reduced import tariff of 187 items of consumer products, cutting average tariff rate from 17.3% to 7.7%. We will strengthen efforts in this field. For example, we will gradually lower tariff rate on imported automobiles. And in addition, we will host the first China international import expo in Shanghai. Over 120 countries have expressed their readiness to participate in it. I want to take this opportunity to increase imports so as to ensure balance of current accounts and create more opportunities for the countries. This is the first aspect. The second aspect is that as we commemorate the 40th anniversary of reform and opening up, we will roll out more reform measures. China began its reform and opening up in 1978. And this year marks its 40th anniversary. We are aware that reform and opening up have created China's economic development miracle. We need to celebrate the reform and opening up policy. The best way to commemorate the occasion is to roll out more reform measures. The central government is undertaking careful studies of the new measures. Here, let me tell you in a responsible manner, and some measures will exceed the expectations of the international community. Last but not least, let me stress this. Opening up is not only important for China, but also for the whole world. Let's work together to balance economic globalization. Thank you very much for your question, Dr. Schmab. Thank you very much. What an excellent way to celebrate the 40th anniversary of the opening up and reform policies. And I think all the foreign business leaders here in the room would certainly carry away this notion of the reforms will not only meet, but will exceed the expectations which people have here in the room. I want to use this opportunity also in the presence of strong Chinese delegation here just to thank you to express our appreciation for 40 years of strong cooperation. We are proud in the forum to have been a small partner in this process over so many years, and I would like to thank you, Your Excellency Liu He, for making the effort to join us here in Davos. And you have seen, we have a lot of snow here, maybe when you have the Olympic Games, we can export some of the snow to your country. In any case, we wish you all the best because we know you are the principal architect of all those reforms, so we wish you all the best for the execution of those policies. Thank you again for joining.