Lima, January 27, 2005

It is indeed an honor to welcome our illustrious visitor, Mr. Zeng Qinghong, Vice-President of the People’s Republic of China, to the home of Andean integration. We are also honored by the presence of their Excellencies, the Ministers of Foreign Affairs of the Andean Community Member Countries who have come this afternoon to formally welcome the Vice-President of the People’s Republic of China.

None of us present here today is unaware that China is taking its place as a foremost actor in world politics, economics and trade. This is a fact that we celebrate as part of our deeply-rooted belief in the benefits that are to be gained from building a fairer and more balanced world order that will enable us to consolidate the multilateral international system and see the materialization of a multipower order in international relations.

The figures point firmly in that direction. The economy of the People’s Republic of China has grown rapidly over the past two decades at an average rate of 8%. China today is the world’s sixth largest economy and is expected to be the foremost economy by 2025. In the meantime, given its increasingly dynamic presence in global trade, we can foresee that China will lead global trade in the next decade.

What is perhaps even more significant, however, is that this impressive performance is the result of an approach that combines international competitiveness with social development, drawing on a renewed vision of the role of the Chinese state and of public and private cooperation.

China is frequently accused of constituting a threat because of its strong competition in some sectors, particularly textiles and other light manufactures. Although we are definitely concerned over this matter and a constructive way must be found to deal with it in the framework of Andean-Chinese relations, China, more than a threat, could offer a major opportunity to increase the competitive and inclusive presence of the Andean countries in international trade.

Latin America is effectively starting to benefit greatly from the mutual rapprochement --on the one hand, as a market for China’s exports, which played a substantial role in our region’s 5% economic growth last year and, on the other, as a strategic partner in the area of investment. In 2004, China was responsible for 35.5% of all new foreign direct investment in Latin America.

The Andean Community has not been the exception. Trade with China has shown considerable growth over the past five years. Over the period 1999 – 2003 Andean exports to China almost tripled and our imports quadrupled.

In 2004, the growth rates of all Andean country exports to China were 100% higher.

I am certain our trade figures will continue to rise and will tend to reach a balance in the near future as a result of important convergences between that great country and the Member nations of the Andean Community.

I would like to emphasize, in particular, the signing in March 2000 of the “Agreement to establish a mechanism for political consultation and cooperation” that has allowed us through successive meetings, in Bogotá in 2002 and Beijing in 2004, to build a favorable vehicle for our bilateral relations. This will make it possible to reinforce our knowledge of each other and to move toward other dimensions, such as strategic alliances on productive investment and cooperation in generating employment and strengthening social cohesion in our countries, which are being reflected in agreements in strategic areas signed recently with Member Countries.

Your Excellency, Mr. Vice-President:

Your visit is especially important at this historic time for Andean and Latin American integration, as our economies and societies are exposed to globalization. As you are aware, last December saw the birth of the South American Community of Nations in the symbolic city of Cuzco, when the Presidents firmly decided to jointly confront the challenges raised by globalization and socially inclusive development.

With this aim in mind, we have concluded the agreements to create a free trade area between the CAN and MERCOSUR that will make it possible to give shape to an enlarged market encompassing 360 million inhabitants, always looking forward to the construction of a great development project for our nations.

The contribution of the Andean Community countries is significant in this firm commitment to South American unity. Our five nations today contribute 25% of the world’s biodiversity and, together with Brazil, possess 20% of the fresh water on the planet. The oil reserves of the Andean Community countries are four times larger than those of the United States and eight times those of MERCOSUR and we possess 74% of Latin America’s natural gas reserves and our share of the region’s coal production is similar.

Our geographic location and our ports equip us to serve as a natural “bridge” between South America and China, both of which will be called upon to play a leading role in the next few decades.

Your country, Mr. Vice-President, could in turn become an ideal platform for the Andean countries’ entry into the Pacific Basin markets. The Andean Community aspires to consolidate the participation of the five Member Countries in the Asia-Pacific grouping in 2008, when Peru is due to host the APEC and the moratorium on new memberships will expire.

Profoundly convinced that our strategic alliance will contribute to the construction of a more socially just world with more balanced power structures, I would like to express the desire of the Andean Community General Secretariat to deepen its cooperation with the People’s Republic of China in the areas of trade, investment and the promotion of development in sectors of priority to our countries, like telecommunications, tourism, new information technologies, energy and environment.

I also wish to express our will to work hand-in-hand with the Andean Community Member Countries and together with the People’s Republic of China --the one and only millenary China-- on consolidating the principles of multilateralism, on democratizing international relations and establishing a new world order in which cooperation and peaceful coexistence among nations become the lodestar in building a better world.

Welcome to the Andean Community, Mr. Vice-President.