1. From the standpoint of foreign investment, China is already a success story.

Anyone who remembers that Deng Xiaoping was once criticized for suggesting that China should study German shipbuilding methods in order to improve its own; anyone who remembers Deng's moving speech to the National Science Conference in the spring of 1978, in which he declared that science was a world heritage from which China should draw and to which China must contribute; anyone who remembers that foreign investment was almost completely absent from China little more than twenty years ago – such a person, like me, will understand how much China accomplished in the next two decades.

China now ranks first as a recipient of foreign direct investment on an annual basis. Millions of people have risen from absolute, grinding poverty. Those achievements are important, and they can be measured. But the numbers are only part of the story.

Beyond the quantitative measures are the vital “accompanying factors.” Market principles have taken root within the economy and within most enterprises. A labor market has emerged, providing a degree of occupational choice to millions of Chinese citizens who formerly had no choice as to how they would earn their livings. The amount and quality of information available to China's citizens has improved in many sectors. Legal concepts and practices unknown to nearly all Chinese 25 year ago are gradually entering the lives of the people, their workplaces, and students have reached fully into the world. Technology imports and domestic technology development have been successfully linked with effective managerial skill and a hard working labor force to create a vast and rapidly growing industrial economy oriented to world markets, world standards, and global needs.

Opening its doors to international investment, China has created a foreign-invested export economy that not only brings capital and technology into the country, but by providing more than half of China's overall exports raises foreign exchange needed for the purchase of items that a modernizing China cannot better provide for itself. By joining the World Trade Organization on demanding but ultimately beneficial terms, China has reaffirmed its determination to continue the process of economic reform and integration with global commercial practices. That decision, together with China's impressive rates of economic growth and the emergence of a large domestic market, has further encouraged foreign to come to integrate China into their global business strategies.

China has, as we say in casual American English, “arrived.” The language of global business is increasingly the language of China's engagement with the world. The gleaming cities and sprawling industrial parks of China are proof for the world to see.

2. That “success story.” However, has created its own dislocations, and for many inside China the “success” is far less obvious.

The dislocations are well known. If more than half of China's foreign trade is accounted for by foreign invested firms, then less than half of this great nation's trade is accounted for by domestically-developed companies; the disproportion is self evident. The assimilation of foreign companies and products into the fabric of the Chinese economy has been uneven, so that in some fields foreign brands almost completely dominate China's market while in other fields struggles aiming to protect or nurture Chinese-made products by directly or indirectly making foreign companies' progress more difficult continue to this day.

And because China's population is so large and its development needs so great, there can never be enough foreign investment to satisfy all needs. This is particularly true in light of the huge concentration of FDI in the coastal belt, and the low levels of FDI in central and western China.

3. The economic “arrival” of China is of global historical significance.

While China is not the first agrarian Asian country, of Confucian cultural heritage and low per capita income, to combine technology, modern managerial skill, and low-cost labor to form a new global economic power (Japan before World War II, and later South Korea moved onto the rapid development path earlier), China's apparent mastery of many of the most difficult challenges associated with building of a modern industrial sector is a large event in human history because of the immense size of the country's economy, its productive capacity, and its present and future market.

China's course over the past decade suggests that the world now faces a new reality: the reality of a huge, rapidly modernizing, but still relatively poor economy, operating at full throttle in global markets, increasingly able to perform economic tasks that formerly could only be handled by the wealthiest and most advanced industrial economies.

Speaking broadly, I would assume that the people of China would prefer to move out of low incomes and into middle or high incomes as fast as they can – even though China's relatively low per capita income (and thus low labor costs) are, for now, a factor in the country's rapid economic growth. And indeed, on balance, I believe that China's trade partners around the world will derive greater benefit from trade and investment with China as Chinese living standards continue to rise. In an ideal situation, all of China's huge population would move rapidly into middle-income status, as many have already done.

But the size of China's population means that massive income growth across the entire society growth is a huge task that will take many many decades to achieve. To the many struggling, competing Chinese municipalities or provinces less affected so far by China's sudden economic growth, it may seem that even the condition of moderate comfort implied by today's phrase xiaokang shehui (小康社会) will require the work of generations. And the task of attracting needed foreign investment in the face of bitter competition from other Chinese cities and towns must seem very difficult.

Americans, too, in towns and cities across our country where the natural environment is severe or economic and educational levels are lower, and my fellow countrymen in towns and cities whose industries have died with the depletion of natural resources or changes in world markets or the obsolescence of their industries know the pain of economic change, as many in China know it.

In other words, even great progress produces new dilemmas, in a dialectical way. Thus, as China becomes a global trading power, assimilating large quantities of foreign investment, both the people of China and the citizens of China's many trading partners around the world will continue to face significant difficulties adjusting to a “new overall situation”. And in China's wake, other large, continental economies are likely to follow, perfecting for themselves the same combination of stronger participation in the world economy. Before too long, China may be facing competition in the global economy from countries not yet as advanced as China has already become.

That's the end of Part 1. Now we move on to part 2.

Part 2:

Chinese to English

You will hear a speech delivered by a Chinese Ambassador at the Forty-ninth session of the United Nations General Assembly on the issue of International Natural Disaster Reduction and Humanitarian Assistance. Please turn the speech into English while the speaker speaks.

Let's begin. [TONE]