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CNBC Transcript: Long Guoqiang, Vice-President, Development Research Center of the State Council


Following is the transcript of a CNBC interview with Long Guoqiang, Vice-President, DRC. The interview was broadcast on CNBC on 20 March 2017.

All references must be sourced to a "CNBC Interview".

Interviewed by Eunice Yoon, Beijing Bureau Chief, CNBC at China Development Forum 2017.

Eunice Yoon: What's your view on the rise of anti-trade and anti-globalization sentiment around the world?

Long Guoqiang: Globalization brought a lot of positive things to all the countries, all the people. I think all countries, including China, benefitted a lot from globalization. It is a double-edged sword, when it brought the positive things, people also need to take some costs. For every country, the same. I think for quite a long time, when people forecast on the cost of free trade, there's always some voice against the free trade. Traditionally, such kinds of voices are popular in countries with weak competitiveness. What is new is that recently, especially after the global financial crisis, the voice of trade protectionism in advanced countries - actually these countries are the biggest benefitted (beneficiaries) from globalization - the voice of anti-free trade or trade protectionism in such advanced countries become bigger and bigger. The problem is that, the reason is that many people attributed a lot of problems; economic problems, social problems, to globalization, actually this is not true. But you know, because of the Internet, the communication change a lot. In the past, the traditional media like yours, like TV, like newspapers dominated the communication, the news. But in the era of the internet, all the people can put their voice on the Internet.

EY: So what does China want to do, to try and quiet down some of those voices and to support globalization?

LG: Actually in China (there are) also different voices. The mainstream of the voice in China wish to maintain the globalization, because it reflects the demand of economic development. It reflects the demand of the production growth. Also we think we should explore the potential of globalization, as well as, we need to take some action to avoid the negative effects of globalization. So basically, as you may have read the speech by President Xi in Davos, that we should be insistent on free trade and maintain globalization.

EY: China has been criticized in the past for being protectionist itself. So what more does China want to do, to open its markets, and to defend itself against that kind of criticism?

LG: After the global financial crisis, we found that many countries have adopted some kind of trade protection measures. And China, as the biggest international trader, trading country, we… how to say… most of the protectionism (is) against China. So we don't like protectionism. And for Chinese government you know, we adopt a lot of measures to further open up our market. Even after the financial crisis, we liberalize the markets, for trade, for foreign investments and so on. So our government tries to work together with the international community to further promote the liberalization and facilitation of trade and investment to further promote international cooperation.

EY: What would you say to international companies who complained that the opening up hasn't been fast enough, or the reforms and structural reforms haven't been moving at a quick enough pace?

LG: I personally think the China government adopted a lot of measures, of liberalization in trade and investments. One reason that the complaints by foreign investors are that the speed of liberalization in China is not as fast as they expected. I contacted a lot of management people from the foreign companies, that China government announced very ambitious reforms and opening up planning and they've implemented in the past three years for this administration, and made a lot of progress. But the people can tell with the plan… the whole China to go faster than...this is one reason. Another reason I think when the central government announced a lot of new policies, new measures; China as a big country, the local governments they need to implement it, so for specific investors, maybe there'll be some problems in specific projects, in specific regions. So it's understandable, if you compare China with other countries, I think we are very ambitious to further promote the trade and investments liberalization. And if you talk with the people, I think basically the evaluation is very positive, especially in this forum you can meet a lot of people, why so many high level people come to this forum reflects the confidence, the expectation on China for the development, for the reform and opening up.

EY: One of the complaints that we've been hearing more recently from foreign companies is that it's more difficult for them to get their money out because of the restrictions on capital outflows. When do you think that policy will change?

LG: You know, Chinese yuan, the RMB is not fully convertible according to Chinese regulations. So in the past years, especially the past three years, a lot of emerging economies meet with the challenges of capital outflow. So, for such kind of countries, the governments adopt some measures to prevent the rapid outflow. But for China you know, our Premier answered the questions during the (National) People's Congress that on the current account, the government still adopt the commitment that it is free for companies, for individuals to both in or out, put in or put out their capital, and in the capital account, the government to check if it's legal or not...if legal, there's no problem for the companies to put the money abroad.