oecd-china: 20 years of partnership

Chinese Vice-Premier Wang Yang with OECD Secretary-General Angel Gurra, 11 November 2014, Beijing.

TABLE OF CONTENTS1995 - 2015

TABLE OF CONTENTS1995 - 2015

02-03 FOREWORD Angel Gurra, OECD Secretary-General

Gao Hucheng, Minister of Commerce, Peoples Republic of China

04-05 VOICES

06-27 1995-2005

THE FIRST TEN YEARS: Gradually building mutual trust and confidence

28-63 2006-2015

THE SECOND TEN YEARS: Strengthening the co-operation towards a comprehensive partnership

64-65 CHINA-OECD:

LOOKING TO THE FUTURE

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The OECD is proud to have China as a Key Partner since 2007. China is a central pillar of the world economy and greatly enhances the OECD policy debate on global challenges such as achieving sustainable and inclusive growth, creating jobs and developing skills, fighting protectionism, developing green growth policies and eradicating extreme poverty. In todays rapidly changing global environment, there is a need to foster exchange of knowledge and experiences in order to establish appropriate standards and policies that underpin stronger, fairer growth. This can only be achieved by active engagement with partners such as China.

Trade and investment were the focus of the agenda in 1995 when China and the OECD initiated their co-operation with a first workshop. The partnership now extends across the broad range of core OECD policy areas (macroeconomic monitoring, science and technology, agriculture, environment, tax, budgeting, pensions, health, regional development, regulatory governance, statistics, corporate governance, education), and includes more than 30 Chinese ministries and government institutions. The Ministry of Commerce plays an important coordination role.

The OECD supports Chinas reforms towards a sustainable and inclusive development through the provision of analysis and policy recommendations on Chinas core challenges. OECD Economic Surveys and Policy Reviews serve a dual purpose: they provide a comparative analysis of what worked and what did not in OECD countries; they also help OECD countries better grasp the complexities of Chinas socio-economic development process. Recent work on competition and corporate governance policies, as well as new approaches to promote innovation and domestic tax compliance and transparency, show the real impact of this work on the formulation of Chinas policies.

Member countries and other Key Partners also benefit. Chinas active engagement in OECD bodies (e.g. Committee for Science and Technology Policy, Committee for Fiscal Affairs) enriches the discussion and makes the work undertaken by the Organisation more relevant and valuable. Chinas actions, like adherence to OECD instruments (Declaration on International Science and Technology Co-operation for Sustainable Development), can reinforce the efforts made by countries at different stages of development to address common challenges. International taxation is another area where Chinas active participation has been invaluable in the global battle against tax evasion.

Relations between the OECD and China are entering a new era. The collaboration now extends beyond the OECD to important intergovernmental processes where the OECD plays a leading role, and in which China is involved. Groups like APEC, G7 and G20 offer new opportunities to strengthen relations. As China and the OECD celebrate 20 years of mutually beneficial co-operation, the Memorandum of Understanding signed with the Ministry of Commerce can serve as a platform to identify joint priorities.

China can count on the OECD to support its efforts to improve the lives of its citizens and to strengthen its contribution to global governance for a better and more harmonious world.

Angel Gurra OECD Secretary-General

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OECDCHINA

It has been precisely two decades since China and the Organisation for Economic Co-operation and Development (OECD) officially started their policy dialogue and co-operation in 1995. During this period, thanks to the joint efforts of both sides, the collaboration between China and the OECD, which started from scratch, has kept expanding and become more and more substantive. A multi-level and diverse co-operation pattern has taken shape, covering a wide array of areas ranging from macro-economic policy, global governance, trade, investment, development, finance and taxation, to science and technology, education, agriculture, statistics, anti-corruption and competition, and fruitful results have also been achieved. Today, over 30 Chinese ministries and agencies have been engaged in co-operation with the OECD.

In the past 20 years, the research results of the OECD and the good practices of its member countries have been introduced to China through exchange of high-level visits, joint research, policy reviews, conferences and workshops as well as capacity building activities, and have been instrumental to Chinas efforts in deepening the reform and opening up process and promoting social and economic development. In the meantime, the experience and effectiveness of Chinas developmental approach have in turn influenced OECDs research and analysis with a unique perspective and contributed to enriching ideas for international development with Chinese elements. The past two decades of co-operation have forged a mutually beneficial partnership that answers the needs of both sides.

Currently, the international community is exploring a path towards a robust, sustainable and balanced growth of the global economy. Global value chains, regional integration and the new agenda of international development all have profound impact on the process of globalisation. Under such circumstances, dialogue and co-ordination between economies at different stages of development have become all the more important as global governance is marching towards greater equality and inclusiveness. At the same time, China is also making efforts to accelerate its reform process, build a new open economy, accommodate to and lead the New Normal and further deepen its co-operation with countries around the world. It was against this backdrop that the Ministry of Commerce of China and the OECD signed for the first time a comprehensive Memorandum of Understanding for co-operation in November 2014. This MOU has not only identified the orientation and working mechanism for future co-operation, but has also demonstrated the goodwill of both sides to further expand and deepen the collaboration.

Looking into the future, I believe that in the next two decades, the partnership between China and the OECD will enjoy an even broader prospect, going beyond the co-operation between a country and an international organisation by making new contributions to the common development of the world.

Gao HuchengMinister of Commerce,Peoples Republic of China

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20 years of partnership

TESTIMONIALS FROM

LIU He Minister, Office of the Central Leading Group for Financial and Economic Affairs of China Page 9.

YUAN Guiren Minister of EducationPage 30.

LOU Jiwei Minister of FinancePage 13.

ZHOU Shengxian Minister of Environmental ProtectionPage 23.

HAN Changfu Minister of AgriculturePage 11.

ZHANG Yi Chairman of the State-Owned Assets Supervision and Administration Commission of the State CouncilPage 53.

MA Jiantang Commissioner of National Bureau of StatisticsPage 10.

WANG Weiguang President of Chinese Academy of Social SciencesPage 59.

LI Wei President of the Development Research Centre of the State CouncilPage 17.

XIAO Gang Chairman of China Securities Regulatory CommissionPage 15.

LI Baodong Vice Minister of Foreign AffairsPage 63.

CAO Jianlin Vice Minister of Science and TechnologyPage 20.

FENG Zhenglin Vice Minister of TransportPage 47.

ZHANG Zhiyong Deputy Commissioner of State Administration of Taxation of ChinaPage 25.

ZHANG Boli Vice President of the Party School of the Central Committee of the Communist Party of ChinaPage 55.

LU Mai Secretary-General of China Development Reform FoundationPage 38.

ZUO Changsheng Director-General of the International Poverty Reduction Centre in ChinaPage 39.

XUE Lan Dean of the School of Public Policy and Management of Tsinghua UniversityPage 36.

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TESTIMONIALS FROM

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Mikkel AARO-HANSEN Deputy Permanent Secretary, Danish Ministry of Environment & Chair of the Environment Policy Committee (EPOC)Page 19.

Masatsugu ASAKAWA Deputy Vice Minister for Policy Planning and Coordination, Japanese Ministry of Science & Chair of the Committee on Fiscal Affairs (CFA)Page 12.

Dr Christoph BEIER Vice Chair of the Managing Board/ Chief Operating Officer, Deutsche Gesellschaft fr Internationale Zusammenarbei (GIZ)Page 49.

Marcello BIANCHI Chair of the Corporate Governance CommitteePage 46.

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Lorenzo BINI SMAGHI Former Chair of Working Party No.3 on Policies for the Promotion of Better International Payments Equilibrium of the Economic Policy CommitteePage 27.

Marcos BONTURI Director, OECD Global RelationsPage 17.

Nick BRIDGE Ambassador of the United Kingdom to the OECD, Chair of the OECD China Informal Reflection GroupPage 61.

Fernando DE MATEO Ambassador, Permanent Mission of Mexico to the WTO, & Chair of the Trade Committee Page 49.

Martine DURAND OECD Chief Statistician & Director of the OECD Statistics DepartmentPage 10.

Nick GIBB MP Minister of State for School Reform, United Kingdom Page 59.

Teruyoshi HAYAMIZU Counsellor of Ministers Secretariat, Japanese Ministry of Environment & Chair of the Chemicals CommitteePage 22.

Irne HORS Head of Division, Strategic Partnerships and New Initiatives, OECD Global Relations SecretariatPage 33.

Aart JACOBI Ambassador of the Kingdom of the Netherlands to the Peoples Republic of ChinaPage 34.

Drago KOS Chair of the Working Group on Bribery in International Business TransactionsPage 33.

Paul J. LEBLANC Deputy Minister, President of Atlantic Canada Opportunities Agency & Chair of the Territorial Development Policy Committee Page 41.

yvind LONE Former Chair of the Working Party on Environmental Performance of EPOC (1998-2012)Page 33.

Catherine MANN OECD Chief Economist & Director of the OECD Economics DepartmentPage 31.

Roel NIEUWENKAMP Chair of the Working Party on Responsible Business ConductPage 58.

Gabriela RAMOS OECD Chief of Staff and Sherpa to the G20Page 63.

Hendrik J. RIPHAGEN Chair of the Committee for Agriculture Page 55.

Manfred SCHEKULIN Director for Export and Investment Policy, Federal Ministry of Economics and Labour of Austria & Chair of the Investment CommitteePage 45.

Luis SANZ-MENNDEZ Director of the Institute of Public Goods and Policies from the Spanish National Research Council (CSIC) & Chair of the Committee for Scientific and Technological PolicyPage 45.

Eduardo SOJO GARZA ALDAPE President of the Mexican National Institute of Statistics and Geography (INEGI) & Chair of the Committee on Statistics and Statistical PolicyPage 61.

Erik SOLHEIM UNEPs Special Envoy for Environment, Conflict and Disaster & Chair of the Development Assistance CommitteePage 39.

Niels THYGESEN Former Chair of the Economic and Development Review Committee (2000-2008)Page 21.

Paulo VIZEU PINHEIRO Ambassador of Portugal to the OECD, Chair of the External Relations CommitteePage 62.

William WHITE Chair of the Economic and Development Review CommitteePage 60.

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1995

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5The 1990s paved the way for a new era of global co-operation and economic interconnectedness. The OECD responded to this chang-ing context by deepening its co-operation with selected countries around the world. The co-operation between the OECD and the Peo-ples Republic of China was launched in Paris in March 1995 with a first workshop on trade and investment links between OECD coun-tries and China, and broadened over the years to meet the growing need for policy analysis and recommendations. In particular, sub-stantive co-operation took off in a number of areas such as energy, agriculture, environment, statistics, tax, corporate governance and science and technology. The deeper engagement took place through reciprocal visits, seminars, workshops or joint studies, co-ordinated by the Chinese Ministry of Foreign Trade and Economic Co-operation (now the Ministry of Commerce), which started to play an important role in supporting OECD/China co-operation.

These early activities laid the groundwork for future reinforced en-gagement, which started with Observer status in OECD Committees (Scientific and Technological Policy [2001]; Committee for Fiscal Af-fairs [2004] and evolved into a much more active role for China in OECD bodies and initiatives. Some key milestones during the first decade of the co-operation include Chinas adoption of three OECD instruments (Declaration on International Science and Technology Co-operation for Sustainable Development; Declaration on Acces-sion to Research Data from Public Funding in 2004, Paris Declaration on Aid Effectiveness), and its participation in OECD regional initia-tives (OECD Asian Roundtable on Corporate Governance [1999]; OECD/ADB Anti-corruption Action Plan [2005]). It also underwent an in-depth assessment of its legal and institutional anti-corruption policies in 2005 as part of the OECD-ADB Anti-Corruption Initiative for Asia Pacific, and participated in high-level multilateral negotia-tions, such as steel and shipbuilding subsidy agreements.

Beyond ongoing work in specific policy areas, increased co-operation also spurred interest on both sides to have a better understanding of key issues affecting Chinas domestic economic policies and their impact on the global economy. In 2002 and 2005 two reports were published (China in the World Economy: Domestic Policy Challenges; Governance in China) which were the result of a horizontal, OECD-wide effort to foster dialogue and co-operation with a multitude of Chinese ministries. The first report reviewed the policies needed for China to reap the benefits of its further integration in the world

THE FIRST TEN YEARS: Gradually building mutual trust and confidence

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economy, and showed the governments determination to shift towards a competitive and market-based economy. The second report provided a unique set of insights on governance practices in China and enriched OECDs work in this field.

As co-operation deepened and relations of trust developed between min-istries and the OECD secretariat, China started engaging in OECD policy reviews. Through these exercises, China was able to benchmark its poli-cy practices against best practices in OECD countries. In 2003, the OECD published the first Investment Policy Review of China, prepared in col-laboration with the Ministry of Commerce. In 2005, reviews on Chinas agriculture and budgeting policies were conducted, and three more were initiated on environmental performance, innovation policy and regulato-ry reform. Following the tradition of surveys of OECD economies, which focus on policy and structural reforms to improve macroeconomic perfor-mance, the OECD conducted its first Economic Survey of China in 2005, in close co-operation with the National Development and Reform Commis-sion. The Survey assessed main economic challenges faced by China and provided recommendations in improving the productivity of the business sector and reforming the financial system and public finances to better support growth.

During this first decade of the OECD-China partnership, Chinas increas-ing participation in the Organisations activities helped to foster a better understanding among OECD countries of Chinas policy perspectives and challenges. In turn, the OECD was pleased to respond to Chinas increas-ing request for the Organisations expertise and experience to support the countrys economic and social development, such as the modernisation of competition law in the early 2000s (Ministry of Commerce and the State Administration for Industry and Commerce), the 2002 Codes of Conduct (China Securities Regulatory Commission and the State Economic and Trade Commission), and the anti-monopoly law in 2005 (State Council Legislative Affairs Office).

At the end of the first ten years of a mutually enriching collaboration, co-operation efforts were bearing fruit and setting the stage for the next dynamic ten years. New areas of co-operation emerged as China further adjusted the role of its State and market forces and became more closely integrated into the global economic system. In May 2005, China and the OECD issued a joint statement during the OECD Ministerial Council Meet-ing confirming the mutual desire to further strengthen the co-operation in the years to come.

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> Launch of the Strategy of invigorating the nation by developing science and technology.

> 9th Five-Year Plan sets out a fundamental transition for the Chinese economy: from the traditional planning system to a socialist market economy.

> OECD Ministerial meeting gives mandate for the OECD to establish a country programme of dialogue and co-operation with China.

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1994 One of the very first OECD Secretariat missions to China: Dinner with Assistant Minister of Foreign Trade and Economic Co-operation (MOFTEC) Long Yongtu, Beijing

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OECD press releases announcing first steps taken to strengthen OECD-China engagement

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> Launch of the OECD-China co-operation project on Trade and Investment Links between OECD Countries and China.

1995 First OECD-China meeting featuring MOFTEC Assistant Minister Long Yongtu and OECD Deputy Secretary-General Makoto Taniguichi, Paris

LIU HeMinister, Office of the Central Leading Group on Financial and Economic Affairs

At the 20th anniversary of establishing the policy dialogue relationship between China and the OECD, I would like to congratulate both sides on the success of past collaboration and thank the OECD for sharing its expertise in policy making with China.

It is an integral part of Chinas opening up process to co-operate with international organisations, such as the OECD. This co-operation has provided an important platform for China to learn from international experiences and best practices. In the past two decades, the Chinese government and related think tanks have developed a fruitful collaboration with the OECD in a multitude of areas. This has been a mutual learning process and has been instrumental in enhancing Chinas policy-making capacity. As a long-time participant in economic policy making in China, I can personally attest to the benefits I gained from co-operating with the OECD and from engaging in peer dialogue with OECD colleagues.

Looking ahead, China will continue deepening comprehensive reforms and further opening up of the economy and will strive to fulfill, by the middle of this century, the Chinese dream advanced by President Xi Jinping. I truly believe the future development of China will not only call for more co-operation with the OECD, but will also create new opportunities for both sides to collaborate in such areas as environment and climate change, human capital, aging, urbanisation, income distribution and poverty reduction. The 20th anniversary marks both a milestone and a new starting point for an even higher level of co-operation between China and the OECD, and I wish it even greater success in the years to come!

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1996

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1996 MOFTEC Assistant Minister Long Yongtu and Peking University Professor Justin Yifu Lin at the OECD Forum China in the 21st Century: Long-Term Global Implications, Paris

> The OECD/IEA concludes with Chinas then State Planning Commission (now the NDRC) a Memorandum of Policy Understanding in the Field of Energy to assist China in its transition to a more-sustainable energy economy.

> Commencement of a series of agricultural policy workshops jointly organised over the years with the Ministry of Agriculture and its affiliated agencies.

> Commencement of a series of joint seminars and workshops in China organised over the years with the State Environmental Protection Administration (now the Ministry of Environmental Protection), on topics such as environmental taxation, monitoring and indicators, and national coherence of environmental enforcement and performance.

> State Council issues decision to alleviate burdens on farmers.

> Breakthroughs in foreign exchange reform as China fulfils the conditions of IMFs Article VIII on achieving current account convertibility.

> State Council issues a Decision on Several Issues Concerning Environmental Protection.

> First annual workshop on national accounts, held in Beijing with the National Bureau of Statistics. 2015 will see the 18th consecutive workshop take place.

Martine DURANDOECD Chief Statistician & Director of the OECD Statistics Department

Building on almost twenty years of collaboration in the area of statistics, in March 2015, the OECD Statistics Directorate and Chinas National Bureau of Statistics (NBS) signed a Memorandum of Understanding (MoU) that is paving the way for an even broader and more sustainable co-operation between our two institutions. The MoU frames our future partnership on the development of good statistics, their transmission and dissemination, allowing us to better compare how OECD and Chinese citizens consume, learn, work and live. This renewed co-operation will not only foster greater exchange of information and data but it will also provide for joint research and studies, staff exchanges and study visits between our institutions. The OECD is proud of its longstanding, and future, collaboration with China to develop Better Statistics for Better Lives.

MA JiantangCommissioner of the National Bureau of Statistics of China

Along with the collaboration between China and OECD, the NBS and the OECDs Statistics Directorate have been working with each other fruitfully since 1996. A typical example is that we have jointly held 18annual seminars on national accounts. To measure our progress towards the Chinese Dream and better the lives of people, we are looking forward to working with the OECD more closely, to help people understand China and the rest of the world with better statistics.

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Some early OECD publications dedicated to China, published in 1996

HAN ChangfuMinister of Agriculture of China

The Chinese Government has persistent-ly attached great importance to agricultural development. Ensuring food supply for a pop-ulation of 1.3 billion people has always been the governments top priority. Over the years, China has achieved remarkable accomplish-ments by following a new path of agricultural modernisation with Chinese characteristics. In 2014, Chinas grain production grew for the eleventh consecutive year, with more than 600 million tons of output to ensure the sufficient supply of a large number of major agricul-tural commodities. Farmers have seen their income increase for the eleventh consecutive year; social services and infrastructure devel-opment have been significantly improved; so have farmers living and production condi-tions. The sustained and rapid development of Chinas agriculture and rural economy has managed to meet the populations growing demand for agricultural products, effectively supported the worlds largest and fastest in-dustrialisation and urbanisation process and significantly contributed to ensuring food se-curity worldwide.

Agriculture plays an important part in the co-operation between China and the OECD. Over the past two decades, the two sides have maintained effective collaboration in agricultural policies, pesticide safety and agro-machinery testing. The experience of OECD countries in agricultural development has provided a helpful reference for China in agricultural development and rural reform. Meanwhile, China has also shared with the OECD its practical experience in developing modern agriculture, ensuring national food security and reducing rural poverty, improv-ing understanding of Chinas agriculture

among OECD members and non-OECD economies.

Today, China is at a critical stage where in-dustrialisation, IT application, urbanisation and agricultural modernisation are advanc-ing simultaneously. To transform traditional agriculture and develop modern agriculture is a long-term task. We are committed to pursuing the path of agricultural moderni-sation with Chinese characteristics, as well as a new national food security strategy that mainly relies on domestic resource and production capacity, with moderate imports and technology support. We will also strictly protect arable land, accelerate progress in agricultural science and technology, and pro-mote farm mechanisation and IT application. Meanwhile, efforts will be made to deepen rural reform, develop moderate-scale opera-tion of agriculture, and nurture new types of agricultural operators and professional farm-ers. We will try to reduce agricultural non-point pollution and improve overall agricultural production capacity and sustainability.

As an important international organisation, the OECD has strong policy research and analysis capacity. China would like to engage in more exchange and co-operation with the OECD in the area of agriculture and establish a stable collaboration mechanism to share experience in rural reform and development. China and the OECD could work together to promote modern agriculture, improve the level of agricultural production worldwide and strengthen global food security. I believe, through our joint efforts, more measures will be taken to boost China-OECD co-operation in agriculture for more fruitful outcomes.

1996 OECD Secretary-General Jean-Claude Paye with MOFTEC Assistant Minister Long Yongtu, at the OECD Forum China in the 21st Century: Long-Term Global implications, Paris

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Chinas increasing role in the global economy has been reflected in the modernisation of its tax administration, its major tax reform initiatives and its increased leadership role in the global tax dialogue.

Partnership between China and the OECDs Committee on Fiscal Affairs (CFA) started in the mid-1990s when the co-operative technical training programme on taxation was established. Since then, our co-operation has grown from strength to strength:

- in 2004, China became an Observer/Participant in the CFA, and has been participating in the CFA and all its subsidiary bodies;

- in 2009, China became a member of the Global Forum on Transparency and Exchange of Information a multilateral framework within which work in the area of tax transparency and exchange of information is carried out by 120 jurisdictions which participate in the work of the Global Forum on an equal footing and has been playing an important role as Vice-Chair of the Steering Group;

- in 2011, China was elected as Vice-Chair of Working Party 10 on Exchange of Information and Tax Compliance.

Our collaboration gained further momentum when, in 2013, China and the CTPA concluded a three-year MOU for co-operative activities in the tax area, the CTPA published a report on Tax Policy and Tax Reform in the Peoples Republic of China, and China signed the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters. China also became an Associate in the OECD/G20 Base Erosion and Profit Shifting (BEPS) project, working together with OECD Members on an equal footing on all aspects of the BEPS project. China is taking a leadership role in the CFA Bureau Plus, and we appreciate Chinas contribution in enriching our discussions. In 2014, China joined the Declaration on Automatic Exchange of Information in Tax Matters adopted at the OECD Ministerial Council. The CFA welcomes the partnership with China in carrying out the challenging task of modernising the current international tax rules through the BEPS project, and implementing new international standard on automatic exchange of information. There is no doubt that Chinas contribution is indispensable to achieve these goals. Looking ahead, we hope to strengthen Chinas collaboration in all of the CFAs work and develop a fairer international tax system which will enhance global sustainable and balanced growth.

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1997

1997 Spring blossoms at the Yangzhou Tax Centre campus

> Co-operation established with the State Administration of Taxation, and commencement of regular technical seminars hosted in the Yangzhou Tax Centre.

> China and the OECD hold a maritime policy workshop in Paris.

> Deng Xiaoping Theory entrenched into the Communist Party of Chinas Constitution as a guiding ideology.

> Jiang Zemin re-elected as the General Secretary of the CPC Central Committee.

> Goal set for establishing an adequate financial system for a socialist market economy.

Masatsugu ASAKAWADeputy Vice Minister for Policy Planning and Coordination, Japanese Ministry of Science & Chair of the Committee on Fiscal Affairs (CFA)

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1998 > Co-operation initiated with

the Ministry of Finance on the consolidation of Chinas budget process, following a visit of the Vice Minister of Finance Lou Jiwei to the OECD.

> Beginning of a major reform of the organisational structures of the State Council.

> Jiang Zemin re-elected as President of the Peoples Republic of China, and Zhu Rongji, the Prime Minister.

LOU JiweiMinister of Finance of China

The twenty-year co-operation between the Ministry of Finance of China and the OECD has witnessed continuous development and improvement in Chinas public finance system. In the past two decades, the two sides have conducted pragmatic and effective co-operation in various areas including taxation, budgeting and capacity building etc. Such co-operation has helped China better understand development policies and practices applied by advanced economies. Meanwhile, Chinas development philosophies and experiences are widely shared through the platform of the OECD.

Building on these achievements, we would like to work jointly with the OECD to further expand and upgrade our win-win co-operation in the area of public finance and taxation.

1998 OECD Secretary-General Donald Johnston with the Ambassador of the Peoples Republic of China to France Cai Fangbo, Paris

1998 Official mission of OECD Deputy Secretary-General Kumiharu Shigehara to China, in a meeting with Vice Minister of MOFTEC Sun Zhenyu, Beijing

1998 OECD Secretary-General Johnston receiving Vice Minister of Finance Lou Jiwei and Ambassador of the

Peoples Republic of China to France Wu Jianmin, Paris

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1999 OECD Secretary-General Johnston with Li Xiuji, Director of the Standing Committee of the Peoples Congress of Xiamen, Beijing

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1999

> China, through China Securities Regulatory Commission (CSRC), starts participating actively in the OECD Asian Roundtable on Corporate Governance.

> Two early studies on China released under the China in the Global Economy series, Agriculture in China and OECD Countries Past Policies and Future Challenges, and Environmental Taxes: Recent Developments in China and OECD Countries.

> OECD Secretary-General Donald J. Johnston makes official visit to China, to attend the Third China Fair for International Investment and Trade in Xiamen, and hold talks with high-level Chinese officials in Beijing.

> Non-state sector upgraded to an important component of the socialist market economy.

> Western Development Strategy launched to accelerate development of the Western regions.

> State Council enacts a Decision on Deepening Education Reform and Promoting Essential-Qualities-Oriented Education.

> 50th anniversary of the foundation of the Peoples Republic of China.

> Beginning of a series of major steps in state-owned enterprise reforms.

> International seminar on China in the 21st century: challenges of global and national economic integration, organised jointly by the OECD Development Centre, the Chinese Academy of Social Sciences and the Government of Yunnan Province, in Kunming.

1999 OECD Secretary-General Johnston shaking

hands with Minister of Finance Xiang Huaicheng, Beijing

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XIAO GangChairman of the China Securities Regulatory Commission

More than a decade has passed since the China Securities Regulatory Commission (CSRC) began to work with the OECD in corporate governance and other areas of interest. Thanks to the assistance from the OECD, over the years, the CSRC has made remarkable progress in improving the corporate governance of listed companies, by drawing upon standards internationally accepted and experiences in mature markets, while fully recognising that the Chinese capital market is still in the emerging and transitioning stages. We have established a sound legal framework for corporate governance, completed the reform on the separation of equity ownership and trading rights, improved the information disclosure-related regulations, and strengthened the protection of minority shareholders. These actions have played a crucial role in promoting modern corporate practices, improving the quality of listed companies and enabling the capital market to better serve the real economy.

The past few years have seen the capital market rapidly growing in China, with increasingly diversified market layers, products, listed companies and investor bases. It poses severe challenges to regulatory authorities. The CSRC will, in line with the national reform roadmap, continue improving corporate governance of listed companies and amend the Code of Corporate Governance for Listed Companies, as appropriate. The CSRC looks forward to carrying on co-operation with the OECD in this regard and stands ready to explore new areas of exchanges, including due diligence and the protection of financial consumers, to keep updated on the international regulatory landscape and contribute to the steady and sound development of the Chinese capital market.

1999 OECD Secretary-General Johnston greeting Governor of the Peoples Bank of China Dai Xianglong, Beijing

1999 MOFTEC representative attending a conference on trade and competition at the OECD, Paris

1999 OECD Secretary-General Johnston shaking

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Zhu Lilan, Beijing

Some early OECD publications dedicated to China, published in 1999

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2000 > OECD starts participating

at high-level in the China Development Forum.

> Close co-operation with the Development Research Centre (DRC) of the State Council to develop the first Chinese dynamic computable general equilibrium model assessing the impact of accession to WTO on Chinas economy.

> Special Administrative Region of Hong Kong joins the Programme for International Student Assessment (PISA).

> Publication of National Accounts for China: Sources and Methods.

> Jiang Zemin first puts forth the important thought of the Three Represents while on an inspection tour in Guangdong.

> China launches pilot reforms to rural fee and tax system.

> 10th Five-Year Plan.

> First inclusion of data on China in the OECD annual publication Education at a Glance, as the first step in deepening collaboration between the OECD and China in the development of education indicators and data collection.

2000 Assistant Minister of MOFTEC Ma Xiuhong speaking at the OECD Forum

Partnerships in the New Economy, Paris

2000 DRC President Wang Mengkui attending a conference on China and World Economy at the OECD, Paris

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LI WeiPresident of the Development Research Centre of the State Council of China

Twenty years have passed since the Development Research Centre of the State Council (DRC) began to work with the OECD. The DRC and the OECD have developed fruitful co-operation in many fields, such as macroeconomic forecasts, agriculture and rural development, modern services industry, global value chain, innovations in science and technology, the Happy Life Index, corporate governance and intellectual property rights. OECDs authoritative data, forward-looking global perspectives and rich experiences in international comparison studies have contributed positively to our policy research. In addition, a regular exchange mechanism has been established between us. Secretaries-Generals of the OECD have attended our China Development Forum for the last 15 consecutive years, sharing their wisdom and suggestions for the reform and development of China. At the 20th anniversary of this co-operation, I would like to extend our sincere gratitude on behalf of the DRC to the OECD for its active participation in and great support to the research in economic and social policies in China.

As the policy research and consulting organ for the Central Government of China, the DRC has been working to build a new think tank with Chinese characteristics to widen and deepen international exchanges and co-operation. As an authoritative global think tank, the OECD has been the initiator or advocate for a number of governance rules worldwide. As we both are committed to promoting social progress and improving peoples lives through policy research, it is our shared wish to learn from each other, broaden exchanges and deepen co-operation. I believe, through our joint efforts, our co-operation will level up and grow even further, to provide better intellectual support for China and the rest of the world.

2000 Farewell visit of Minister Counsellor Tong Jiemin to the OECD, with OECD Secretary-General Johnston and the team of OECD Centre for Co-operation with Non-Members (CCNM), Paris

Marcos BONTURI Director of OECD Global Relations

The OECDs Global Relations Strategy seeks to make the Organisation a more effective and inclusive global policy network, through close co-operation with our five Key Partners (Brazil, China, India, Indonesia and South Africa) and strengthened engagement with all regions of the world. Over the years, this engagement has led to a better understanding of the challenges faced by large emerging economies and has enriched the global policy debate at the OECD. Looking ahead, we will continue working towards an ever closer relationship. I am convinced that co-operation between the OECD and China is of mutual interest, as well as to the benefit of the broader global community.

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> Beginning of Chinas regular participation in the ministerial meetings of the OECD Environmental Policy Committee, held approximately every four years.

> China acquires its first OECD Observer (now Participant) status in the Committee for Scientific and Technological Policy.

> Framework for Energy Technology Co-operation signed between OECD/IEA and Ministry of Science and Technology of China.

> State Council releases Outline for Poverty Reduction and Development of Chinas Rural Areas.

> Declaration and first summit of the Shanghai Co-operation Organisation.

> 80th anniversary of the foundation of the Communist Party of China.

> China becomes WTOs 143rd

member after 15 years of negotiations.

2001 OECD Secretary-General Johnston

speaking to Assistant Minister of MOFTEC Long Yongtu, at the

OECD Ministerial Council Meeting, Paris

2001 Vice Minister of the State Environmental Protection Administration Wang Xinfang attending the ministerial meeting of the OECD Environmental Policy Committee, Paris

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Mikkel AARO-HANSENDeputy Permanent Secretary, Danish Ministry of Environment & Chair of the Environment Policy Committee (EPOC)

Taking into account the importance of China to the global economy and its challenges in the field of environment, the OECD Environment Policy Committee (EPOC) has been very committed to promoting environmental co-operation with China over the last 20 years.

Through a series of joint activities agreed on an annual basis, EPOC has shared OECD country experiences, best practices and guidelines in order to assist China to identify those which might best be adapted to the Chinese context. At the same time, EPOC members have gained insights into the major environmental challenges facing China, and the measures being taken to address them.

Over the years the co-operation has focused on engaging Chinese experts and officials in several dimensions of the OECD Environment Programme. This includes seminars and publications on environmental taxation and use of economic instruments in environmental policies, environmental monitoring and indicators, environmental financing in the water sector, environmental compliance and enforcement. More recently, China has been engaged in the work on extended producer responsibility schemes and contributing to the OECD Database on Instruments used for Environmental Policies. A particular highlight of past co-operation was the 2007 OECD Environmental Performance Review (EPR) of China.

China has also shown high-level commitment to EPOC and its work. Since 2001, the Chinese Deputy Ministers on Environment have participated in all EPOC Ministerial Meetings, which are held every four years. We are looking forward to Chinas participation in the next EPOC Ministerial in 2016.

Since 2008, EPOCs aim has been to continue to actively engage China in the work of EPOC and its subsidiary bodies in order to support China in achieving its environmental objectives and to contribute to the development and implementation of effective and efficient environmental policies that foster green growth in China. EPOC encourages China to continue to develop and implement progressive environmental policies and to draw upon OECD experience in doing so.

2001 OECD Deputy Secretary-General Seichii Kondo shaking hands with Han Jun, DG of DRCs Research Department of Rural Economic Development, at a special meeting on OECD horizontal study on China of the Economic Development Review Committee, Paris

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2001

CAO JianlinVice Minister of Science and Technology of China

The 21st century has witnessed remarkable progress that China has made in economy, science and technology as well as its ever-growing contribution to the global knowledge creation. From 2001 to 2014, Chinas GDP jumped from the worlds No.6 to No.2, its SCI papers from the worlds No.8 to No.2, and its patent applications from the worlds No.12 to No.1. In 2013, its R&D spending amounted to 2.08% of that years GDP.

Collaboration between the OECD and China has been mutually rewarding. In 2001, the Ministry of Science and Technology (MOST), on behalf of the Chinese government, acquired its first Participant status in the OECD Committee for Scientific and Technological Policy (CSTP). Since then, a number of fruitful co-operative activities have been conducted in innovation policy evaluation and inclusive innovation. We produce joint research reports and share Chinas experience. The Oslo Manual and the OECD Science, Technology and Industry Scoreboard were translated and introduced in China, to provide understanding of the evolution and trends of international measurements for innovation, and to guide innovation surveys in China. The China-OECD Roundtable on Innovation Policies was held to exchange ideas on innovation policy-related practices and outcomes. Chinese professionals were seconded to work at the OECD Secretariat on short-term assignments to enhance our mutual trust and interaction. The China-OECD Science, Technology and Innovation Co-operation Liaison Office was created in 2011 and the related information network was launched soon after.

The OECDs prospective research in innovation policies, such as innovation

surveys, governance of public organisations, and R&D tax incentives, has positively influenced Chinas reform and policymaking in these fields.

On behalf of my Ministry, I would like to extend congratulations on the 20th anniversary of the China-OECD partnership in policy dialogues. China is now stepping into a new phase to build a moderately prosperous society, comprehensively deepen reforms and promote the rule of law. China is evolving towards a New Normal of economy that is better structured under a more advanced pattern and a more complex division of labour. It is transforming from high-speed growth to medium-high-speed growth and from the extensive growth of size and speed to the intensive growth of quality and efficiency. It is putting more emphasis on the driving role of innovation and the improvement of peoples lives. In the current slow recovery of the world economy, it is the common task for every country to use innovation and address social and global challenges. The Chinese government is committed to an innovation-driven development strategy. To deepen the reform of the scientific and technological system, we need to review the elaboration of innovation policies and flexibly utilise the tool to improve the efficiency of public funding and research activities. In the new context, the co-operation between China and the OECD will become more essential.

In the years to come, we look forward to even closer co-operation with the OECD in science, technology and innovation (STI), especially in formulating the measurement system for STI policies, driving economic growth and generating benefits to and for the people through innovation.

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> China participates in the negotiation of the OECD Steel Subsidy Agreement.

> China participates in the negotiation of the OECD Shipbuilding Agreement.

> Beginning of Chinas participation in the OECD-Asian Senior Budget Officials Network.

> Publication of China and the World Economy: Domestic Policy Challenges.

> Construction of the West-East Gas Pipeline kicks off.

> Notion of a moderately prosperous society is first put forward at the 16th Party Congress.

> Jiang Zemins Three Represents thought ratified as a guiding ideology by CPC.

> Hu Jintao elected as the Secretary-General of the CPC.

> Framework Agreement on China-ASEAN Comprehensive Economic Co-operation signed in Phnom Penh, Cambodia.

Niels THYGESENFormer Chair of the OECD Economic and Development Review Committee (2000-2008)

The OECD started its analytical work on the Chinese economy more than 15 years ago, leading initially to its major background study China in the World Economy, published in 2002. Since then three Economic Surveys of China have appeared at somewhat irregular intervals in 2005, 2010 and 2013 following the traditional pattern of finalising a draft prepared by the OECD Secretariat in a lengthy meeting of the Economic Development and Review Committee (EDRC), with the active participation of government representatives from the country studied, in the case of China its NDRC.

I had the privilege of chairing the EDRC at the time of the first of these surveys nearly a decade ago and vividly recall the countrys eagerness to engage in this new enterprise. There was no difficulty in persuading colleagues to take the role of lead discussants; this was a unique learning process for us to look

at a wide-ranging list of policy issues for China and to reflect on the applicability of traditional OECD policy recommendations. Looking back at the topics treated at the time, it is now even more obvious than it was in 2005 that there was much to be learnt from the Chinese experience: structural reforms seemed to work, financial stability had been largely restored after a difficult period, and the Chinese currency began to appreciate slowly a recommendation in the Survey - shortly after our discussion.

The interaction of the OECD with the Chinese authorities in Paris in the EDRC as well as elsewhere has become more intense since 2005 in step with the rapidly growing role of China in the world economy, but the fruitfulness of the OECD engagement, contributing to how China can best design her economic policy in the light of relevant international experience has stood the test of time.

2002

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2003

> First Investment Policy Review of China published, in collaboration with MOFCOM.

> Representatives from China participate in the OECD consultations on the first revision of the OECD Principles of Corporate Governance and the development of new SOE Guidelines.

> Special Administrative Region of Macao joins the Programme for International Student Assessment (PISA).

> First MOU on co-operation in the field of environment signed with the State Environmental Protection Administration, renewed consecutively in the following years to define issues of common interest.

> Beginning of increasing engagement with the China Council for International Cooperation on Environment and Development (CCICED).

> First incorporation of Chinese short-term economic data into OECD Main Economic Indicators database and publication (including National Accounts data) renewed consecutively in the following years to define issues of common interest.

> Seminar co-hosted with DRC on competition and reform in the rail sector, which helps advance debates at vice minister and ministerial level in China.

> Hu Jintao elected as President of the Peoples Republic of China, and Wen Jiabao, the Prime Minister.

> State Council issues the plan to Revitalise the Old Northeast Industrial Bases.

> China sends its first manned spacecraft Shenzhou V into orbit and becomes the third country to send a human into space.

Teruyoshi HAYAMIZUCounsellor of Ministers Secretariat, Japanese Ministry of Environment & Chair of the Chemicals Committee

The OECD system on Mutual Acceptance of Data (MAD) allows countries to share results of safety tests on chemicals, reduces duplicative industry testing and government assessments, creates jobs for testing labs and saves adhering governments and industry over EUR 150 million every year. Since 2003, China has expressed its interest in exploring adherence to MAD, and OECD and China have been working together since then on a technical basis.

During this period, China has translated the OECD Test Guidelines/Principles of Good Laboratory Practice (GLP), established GLP monitoring authorities, which are key components of MAD, and attended OECD training courses for GLP inspectors. The OECD Chemicals Committee would welcome Chinas adherence to MAD which would be mutually beneficial to China and OECD countries.

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ZHOU ShengxianMinister of Environmental Protection of China

Throughout the extensive evolution process of the infinite universe, only the Earth, a blue little planet in the space, is known to cradle humanity. Who by the riverside first saw the moon arise? When did the moon first see a man by riverside? Wise men at all times from China and abroad were baffled by such philosophical questions. However, properly handling the relationships between human and nature will surely become a crucial achievement of human civilisation. With the vicissitudes of time, environmental and resource issues have become historical problems that human society has to face. Environmental protection has been attracting more and more attention from all nations around the world.

As the largest developing country, China is faced with unprecedented challenges of resources and the environment in the course of rapid economic growth. The environmental problems that occurred in stages in developed countries a few centuries ago have concentrated and emerged in China in structured, compressed and complex forms during the last three decades. As new environmental issues emerge before pre-existing ones have been properly addressed, there remains a big gap between improvement of the environment and the public expectation.

Faced with the severe environmental situation, the Chinese Government is placing environmental protection in a strategic position more important than ever before, and giving tremendous support to the construction of ecological civilisation. President Xi Jinping said that building a new era of ecological civilisation and a more beautiful China is an essential part of the Chinese Dream to rejuvenate the nation. Premier Li Keqiang also declared war against pollution and called for stringent measures to accomplish the tough job, in order to achieve ecological civilisation and a more beautiful homeland. These show the strong will and determination of the Chinese Government to build ecological civilisation and protect the environment.

Today, the Chinese economy has entered into the New Normal. As new features and trends begin to emerge in ecological civilisation construction and environmental protection, priority is given to the harmony between socio-economic development and environmental protection, environmental protection

and prevention, the recuperation of over-taxed resources and the environment, the satisfaction of the expectation of the public for a sound ecological environment, the systematic treatment of the problems concerning mountains, rivers, forests, farmlands and lakes, the total pollution prevention throughout the whole reproduction process, the reliance on legislation and rule of law to protect the environment, and the enforcement of the environmental accountability of local governments and Party committees. Among them, the most fundamental and crucial task is to properly address the relationship between environmental protection and economic development, to explore new paths and develop new thinking, measures and methods to protect the environment.

A new state of mind is needed to navigate the New Normal. We should gain knowledge and pro-actively adapt ourselves to the emerging situation. We should follow it, not without making breakthroughs, to continually improve the level of ecological civilisation. First of all, in terms of approaches, we should positively explore new ways to protect environment while integrating economic and environmental objectives. Secondly, in terms of the stage of development, the improvement of the environmental quality should work as our guide to push ahead the transformation of environmental management strategies. Thirdly, in terms of priorities, we should win the battle against the pollution of air, water and soil while pushing forward pollution prevention, ecological conservation and nuclear and radioactive safety supervision. Fourthly, in terms of working methods, the market and legislation should be allowed to have free play, with innovative ways of environmental management. Finally, in terms of mind-set, the style of work should be continually improved, to be strict with self-development, the exercise of power and self-discipline and earnest in making plans, opening up new undertakings and upholding personal integrity.

In the process of ecological civilisation construction, China is open and willing to continue working with the OECD and its members to foster mutual trust and build consensus. We will promote policy dialogue, deepen the mutually beneficial and pragmatic co-operation and scale up collaboration in a broader range of areas. We will work jointly with the OECD towards building a beautiful earth.

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2004

> China, through its State Administration of Taxation, becomes a member of the OECD Forum on Tax Administration, as well as Participant in the Committee on Fiscal Affairs.

> China joins the OECD Declaration on Access to Research Data from Public Funding.

> Report Income Disparities in China An OECD Perspective published, after a joint seminar with the NDRC, held in Paris in 2003.

> Beginning of regular co-operation on China-OECD Policy Dialogue on Corporate Governance.

> Two events on intellectual property rights (IPRs) and enforcement organised in Beijing, the first in co-operation with the State Intellectual Property Office and DRC, and the second with the Ministry of Science and Technology.

> China joins the OECD Ministerial Declaration on International Science and Technology Co-operation for Sustainable Development.

> State Council issues the landmark Nine Measures document to unlock the development of capital market in China.

> Protection of private property and respect and protection of human rights are written into the Constitution.

> Bank of China and China Construction Bank successfully undergo shareholding reform.

2004 Li Shantong, Director of DRCs Development Strategy & Regional Economy Department, participating in the OECD Forum The World Economy in 2004, Paris

2004 Zhu Xiangdong, Deputy Commissioner of Chinas National Bureau of Statistics attending the first meeting of the OECD Committee on Statistics, Paris

OECD Information Technology Outlook released in Chinese

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ZHANG ZhiyongDeputy Commissioner of State Administration of Taxation of China

The year 2015 marks the 20th anniversary of the co-operation between the Peoples Republic of China and the Organisation for Economic Co-operation and Development (OECD). These two decades also witnessed the pragmatic, rich, varied and remarkable co-operation between the State Administration of Taxation (SAT) and the OECD. Particularly in June 2004, together with the Ministry of Finance (MOF), the SAT became an Observer of the Committee on Fiscal Affairs (CFA) of the OECD. Since then, we have been an active participant in the research of tax-related issues in all the working groups of the CFA, and subsequently global forums initiated by the OECD, including on transfer pricing, tax transparency and exchange of information, tax treaties and value-added tax (VAT). On the other hand, the OECD has provided us with long-term and invaluable expertise and technical support in relation to personnel training and legislative consultation. It has indeed played an active role in improving our tax policies and administrative system.

Mandated by the G20 in September 2013, the OECD has launched the Base Erosion and Profit Shifting (BEPS) Project and the Automatic Exchange of Information (AEOI) Project. As an Associate, China

has been deeply involved in all 15 BEPS action plans and the formulation of the AEOI Common Reporting Standard. We are working together on an equal footing with OECD and non-OECD countries to create international tax regulations, push ahead with the co-operation between jurisdictions in the tax field, and assist developing and low-income economies in enhancing their tax administration capacity. The final completion of these projects will be essential to the establishment of a sound and equitable international tax system and the safeguarding of tax bases of all participating jurisdictions.

The tax administrations worldwide are faced with common challenges in the era of accelerated economic globalisation in the aftermath of the recent financial crisis. In 2014, G20 leaders called for enhancing international tax co-operation and cracking down on cross-border tax evasion and avoidance. We wish for an increasing role of the OECD in promoting international tax co-operation and in formulating equitable international tax rules. We look forward to further co-operation and collaboration with the OECD to generate even greater outputs.

2004 OECD Deputy Secretary-General Herwig Schlgl and Adrian Paterson, Chief Operating Officer

of the Department of Science and Technology of South Africa, in interview during a special programme on

intellectual property rights of the CCTV, Beijing

As a large developing country with a history of only two decades of intellectual

property development, China should consider in depth how to make use of the intellectual property system to promote economic and social progress and achieve a win-win result in international co-operation and exchange. Hence, we are always ready to learn from the most advanced and successful experiences in intellectual property policy-making and in management of intellectual property rights from governments and enterprises of other countries as well as from relevant international organisations.

Written remarks at the High-level Workshop on Intellectual Property Rights & Economic Development in China, Beijing, April 2004.

WU YiFormer Vice Premier of China

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> Beginning of Chinas participation (at Vice Minister level) in the OECD Working Party 3 for the Promotion of Better International Payments Equilibrium.

> Publication of Governance in China, final report of the China Governance Project.

> China becomes the 25th member of the ADB/OECD Anti-Corruption Initiative for Asia-Pacific.

> China participates in the Forum on Partnership for More Effective Development Co-operation, as a first step in the build-up of a structured and sustained dialogue with non-DAC partners, and endorses the Paris Declaration on Aid Effectiveness.

> Two forums in China to improve public debt management and the development of government securities markets, in co-operation with the Ministry of Finance.

> First ever OECD Economic Survey of China published, prepared in close co-operation with the NDRC.

> Agricultural Policies Review of China published, conducted in co-operation with DRC.

> OECD becomes a permanent co-sponsor of the annual China International Fair for Investment and Trade (CIFIT).

> China attends at minister-level the OECD Ministerial Council Meeting for the first time and issues the Joint China-OECD Statement.

> State Council issues the 36-point proposals to encourage and support the development of the non-state sector.

> China moves into a managed floating exchange rate system based on market supply and demand, with reference to a basket of currencies.

> 11th Five-Year Plan.

> 2000-year-old agricultural tax officially abolished, benefiting as many as 900 million farmers across China.

> Concept of New Socialist Country put forward, kicking start a new round of reforms in the rural areas.

2005 OECD Secretary-General Johnston presenting the results of the OECD report China in the World Economy: The Domestic Policy Challenges, at a joint symposium with the DRC during the China Development Forum, Beijing

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Lorenzo BINI SMAGHIFormer Chair of the OECD Working Party No.3 on Policies for the Promotion of Better International Payments Equilibrium of the Economic Policy Committee

WP3 is one of the few OECD working groups with a special restricted composition, being limited to the representatives of Central banks and Finance ministries of the Group of 10. This was justified by the fact that the G10 countries represented a large part of the OECDs economy. Furthermore, the group discussed issues related to Balance of Payment adjustment and macroeconomic policies in a rather informal way, benefitting from confidentiality.

Over time, the emergence of new economic powers that became associated with the OECD raised the issue of participation in WP3 meetings. China was the obvious candidate to join, as it was already member of the G20 and the IMFs Multilateral Consultation.

The G7 had already expanded informally some of the meetings to include Chinese representatives. Indeed, China was not only becoming one of the largest economies, but it also recorded a very large current account surplus which made its integration in the world economy particularly relevant. The decision was taken to invite representatives from the Chinese Finance ministry and the central bank to WP3 meetings, once a year. This gave the Chinese representatives the opportunity to interact with the other members on relevant policy issues, such as macroeconomic policies, structural adjustment, financial liberalisation. This also enabled the other WP3 members to put their own policies into a broader perspective.

2005 Secretary-General Johnston with NDRC Vice Chairman Wang Chunzheng, surrounded by officials of NDRC and OECD Economics Department, Beijing

2005 Joint OECD-NDRC Press conference on the occasion of the launch of the first

OECD Economic Survey of China, Beijing

2005 Presentation of the Economic Survey of China at Renmin University, Beijing

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2006

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5Much of the developing world experienced high growth rates in the 2000s, with strong performance in emerging economies like China and India that significantly changed the global economic landscape. The OECD responded to these trends by bolstering its relations with major emerging economies. In May 2007, the Min-isterial Council decided to strengthen its links with Brazil, China, India, Indonesia and South Africa through a process of Enhanced Engagement. This transition toward deeper OECD global outreach also took place at the onset of the global financial crisis, and came at the moment when concerted efforts and closer intergovern-mental co-operation became essential to address the challenging economic environment.

When the OECD celebrated its 50th anniversary in 2011, the Organi-sation had grown from a transatlantic community in the immediate post-war era to a more inclusive global policy network, expanding its membership to 34 countries and engaging in a varied and flexible relationship with countries and economies around the world and at different stages of development. In 2012, an open door policy was endorsed, integrating the five Key Partners in all OECD Committees mainstream work and creating the possibility of near-equality with Member countries under the new forms of partnership.

During the second decade of the OECD-China relations, engagement continued to deepen in existing areas, notably in environment, sci-ence and technology, taxation, transport and energy. For instance, in 2007, co-operation with the State Environmental Protection Ad-ministration (now Ministry of Environmental Protection) culminated in an Environmental Performance Review of China, which offered some 51 recommendations to the Chinese authorities to strengthen effectiveness in implementing environmental laws and to mobilise financing for environmental infrastructure. In 2008, the Innovation Policy Review of China was released after three years of intense preparation together with the Ministry of Science and Technology. It assessed the status of Chinas national innovation systems and provided recommendations for promoting innovation through a market-based approach.

Important headways were made in the area of taxation, further ce-menting Chinas institutional engagement with the OECD. In 2009, China joined as Vice Chair the Steering Group of the OECD Global Forum on Transparency and Exchange of Information. In the fol-lowing years, China became a member of the Steering Group of the

THE SECOND TEN YEARS: Strengthening the co-operation towards a comprehensive partnership

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newly launched Global Forum on Transfer Pricing and the Global Forum on Value Added Tax, joined as an Associate the OECD/G20 Project on Base Erosion and Profit Shifting and the Working Party 10 on Exchange of Information and Tax Compliance of the Committee on Fiscal Affairs, and adopted the Convention on Mutual Admin-istrative Assistance in Tax Matters and the Declaration on Automatic Exchange of Information in Tax Matters. Additionally, China became a member of the Interna-tional Transport Forum, and joined other Key Partner countries and Russia under the Association Initiative of the International Energy Agency.

At the end of 2010, China reached upper middle income country status (as measured by World Bank standards) and was faced with socio-economic development chal-lenges similar to those in many OECD countries, in particular regarding how to foster and sustain more inclusive, greener and productivity growth. The scope of OECD/China co-operation was further expanded to reflect the evolving paradigm of Chinas development trajectory, catalysing joint work in an array of new areas such as educa-tion, urbanisation, development co-operation, ageing, social inclusion and wellbeing, state-owned enterprise reform, responsible business conduct and trade in value added measurement and global value chains.

Great strides have been in education as a result of the deepened co-operation. In 2006, the Ministry of Education started a pilot Programme for International Student Assessment (PISA) in several provinces, starting with Shanghai, as preparation for a broader participation of China in the survey, including Beijing, Jiangsu and Guang-dong (2015 survey). The OECD has also examined through specific policy reviews Chinas tertiary education and higher education systems, as well as its vocational education and training system in upper secondary schools.

The OECD has been able to provide a leading role helping China to cope with urban management as a result of the unprecedented scale and speed of urbanisation in the country. Between 2009 and 2013, the OECD conducted a series of joint studies on urbanisation trends and urban policies with the China Development Research Foun-dation. Since 2013, the OECD is partnering with the NDRC on a National Urban Policy Review of China to assess the main governance challenges facing Chinese cities and examine a wide range of national policies affecting Chinas urban development, par-ticularly in areas like rural-urban migration, land management and urban planning.

Furthermore, substantive co-operation in the area of development co-operation started relatively late in 2009 with the establishment of the China-DAC Study Group, but has gained increasing momentum in recent years, bringing together a growing number of national and international officials, experts, private sector and civil soci-ety actors to generate mutual learning on delivering quality aid, promoting growth and reducing poverty in developing countries. By 2014, the Study Group had organ-ised eight thematic conferences and action-oriented roundtables or policy symposia, as well as several study visits to Africa.

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While new areas of co-operation continue to emerge and OECD-China relations are mov-ing towards a more comprehensive partnership, China is also progressing in its learning curve of OECD good practices. Chinas application of OECD concepts and standards is a remarkable acknowledgement of their value. For example China has embodied OECD approaches such as Polluter Pays and User Pays principles through environmental charges of water pricing. It also took the OECD Principles of Corporate Governance as the basis for the 2011 self-assessment by China Securities Regulatory Commission, which conducted a thorough review of all laws, regulations and codes of listed companies in China. The OECD Guidelines on Corporate Governance of State-Owned Enterprises, the OECD Guidelines for Multinational Enterprises, and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas are also good examples of how China is applying OECD standards. The Guidance on Supply Chains of Minerals is especially important as was promoted in China to help Chinese companies respect human rights and avoid contributing to conflict through their mineral purchasing decisions and practices.

The OECD is active in China. It has established regular interactions with over 30 Chinese ministries and agencies over the last few years. The Secretary-General has participated in almost all meetings of the China Development Forum, and dramatically raised the Or-ganisations level of contact with the Chinese government through bilateral meetings and encounters with Chinese leaders. As a result, the OECD is recognised by a broad spectrum of people in China as the voice for Better Policies for Better Lives. In 2014, the OECD was even invited by the National Development and Reform Commission to contribute to the policy discussions leading up to the launch of the forthcoming 13th Five-Year Plan, iden-tifying policy options for fostering inclusive growth in China as well as adjusting the role of the state in the transition towards a stronger and better-functioning market-based economy.

Twenty years of fruitful co-operation further crystallised in November 2014 into the Memorandum of Understanding between the OECD and the Ministry of Commerce. In a spirit of mutually beneficial partnership, the MOU maps out a common blueprint for future co-operation, taking OECD-China relations to a whole new level of collaboration.20

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YUAN GuirenMinister of Education of China

Education is the cornerstone of national rejuvenation and social development. In order to modernise its education systems and meet citizens expectations, China is leading comprehensive education reforms through the prism of rule of law. Working closely with globally influential organisations like the OECD can help us push forward reforms and development of Chinas education system with international perspectives and experience.

The co-operation between the Chinese Ministry of Education and OECD dates back to the 1990s. The past two decades have witnessed the fruitful results achieved jointly in areas such as higher education, vocational education, pre-school education and educational data analysis.

Our co-operation has been carried out in various forms, such as joint research studies, forums and translation of OECD publications into Chinese. In 2009 and 2012, Shanghai participated in OECDs Programme for International Student Assessment (PISA) and performed remarkably. Currently, the Chinese Ministry of Education is organising the participation of a wider range of provinces and municipalities in PISA 2015.

On the occasion of the 20th anniversary of OECD-China partnership, we fully recognise the accomplishments achieved in co-operation in the area of education, and we look forward to continuing strengthening our pragmatic collaboration in the future. We are also pleased to share our experiences in education reforms and development with a wider range of countries in the world through the OECD.

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2006

> Concept of harmonious society first introduced.

> China surpasses Japan to hold the worlds largest foreign reserves.

> China (Shanghai) becomes a Participant in the 2009 round of Programme for International Student Assessment (PISA) Survey.

> Second Investment Policy Review of China published.

> Publication of Challenges for Chinas Public Spending: Towards Greater Effectiveness and Equity. > First inclusion of

Chinese indicators in the OECD best-selling publication the OECD Factbook.

> China signs the Charter of the Generation IV International Forum, of which the OECD NEA acts as the technical secretariat.OE

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2006 OECD Deputy Secretary-General Kiyotaka Akasaka receives a Chinese delegation led by Wang Maolin, President of Chinas International Institute for Multinational Enterprises and member of the Standing Committee of the National Peoples Congress, Paris

Catherine MANNOECD Chief Economist & Director of the OECD Economics Department

When I became the Chief Economist of the OECD in October 2014, the overall global economy was running in low gear, with weak trade growth and sluggish business investment. Given these circumstances, inequality is rising, and future generations face challenging prospects. To boost quality growth, with widely shared and sustainable prosperity, we need both supportive macroeconomic policy and bolder structural actions in all economies.

Economic and social development have been at the heart of OECD and China co-operation for the last 20 years, and they will continue to shape our growing engagement, as China moves closer to being a moderately prosperous society by 2020. The OECDs closer dialogue with Chinese policymakers is reflected in the flagship OECD publications, including the Economic Outlook and

the Going for Growth report. The 2015 Economic Survey of China (the fourth such Survey of China) benefits from close co-operation with Chinas State Information Centre, and offers recommendations to the authorities on how to promote more sustainable and inclusive growth, with a focus on providing the right skills to all and bridging the gap for rural areas. At the same time, Chinas greater engagement in our activities benefits the OECD membership, as their economies interact with China on many levels and through many channels.

Standing at this 20-year milestone, the solid foundation of our mutual trust and co-operation portends an even stronger and deeper relationship between the OECD membership and China, to the benefits of all as we collectively address the evolving challenges of the interconnected 21st century.

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> China becomes a member of the Financial Affairs Task Force (FATF).

> Conference on Review of Chinas National Innovation System: Domestic Reform and Global Challenges and high-level international business symposium on China and R&D Globalisation: Integration and Mutual Benefits, organised in co-operation with Ministry of Science and Technology.

> MOU signed with the Ministry of Labour and Social Security (now Ministry of Human Resources and Social Security), to initiate co-operation through a series of reports in the area of occupational pensions to improve the regulatory framework of enterprise annuities and encourage the development of private pension system in China.

> OECD Environmental Performance Review of China published, conducted in co-operation with the (then) State Environmental Protection Administration.

> Opening of the OECD Secretariats contact point in Beijing, hosted by the Embassy of the Kingdom of the Netherlands to China.

> Enhanced Engagement decision opens a new era in OECDs co-operation with China and four other Key Partners (Brazil, India, Indonesia and South Africa), with a view to possible membership.

> First OECD seminar in China International Fair for Investment and Trade (CIFIT), on Measuring FDI to promote a harmonious society, organised in co-operation with MOFCOM.

> Chinas Property Law adopted after 14 years of intense debates.

> New Corporate Income Tax Law passed.

> Labour Contract Law adopted.

> China releases its first national plan to address climate change and reduce greenhouse gas emissions.

> Chinas first ever Anti-Monopoly Law enacted.

> Hu Jintaos Scientific Development Concept ratified into the CPCs Constitution at the 17th Party Congress.

2007 Group meeting with Vice Minister Liu He at the OECD, Paris

2007 OECD Secretary-General Angel Gurra receiving Vice Minister Liu He, Vice Chairman

of the Office of the Central Leading Group on Financial and Economic Affairs, Paris

2007 Chinese delegation led by Liu Xielin, Professor of Chinese Academy of Science, and Xue Lan, Professor of Tsinghua University, in a meeting of the OECD Committee for Scientific and Technological Policy, Paris

2007 OECD Secretary-General

Gurra meeting with Vice Minister

of Commerce Yi Xiaozhun, Paris

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yvind LONEFormer Chair of the OECD Working Party on Environmental Performance of EPOC (1998-2012)

Irne HORSHead of Strategic Partnerships and New Initiatives Division, OECD Global Relations Secretariat

Drago KOSChair of the OECD Working Group on Bribery in International Business Transactions

One of the major achievements in environmental co-operation between the OECD and China was the publication of the Environmental Performance Review (EPR) of China in 2007. It was the culmination of 10 years of co-operation and reinforced the trust and mutual understanding that had been developing over that time. The significance of a non-OECD country like China opening itself to a critical examination by other countries in a potentially sensitive policy area should not be underestimated. Building on this example, the OECD has now carried out EPRs of two other major emerging economies, South Africa and Brazil.

The review was prepared using the same methodology as for the reviews of OECD countries and presented 51 recommendations. One of the key recommendations was to upgrade Chinas Environment Agency to a Ministry. This was implemented soon after the EPR was published, signalling the higher priority assigned to the environment by the Chinese authorities. In 2012, China presented a report documenting the steps it had taken to implement the recommendations. The OECD Working Party on Environmental Performance looks forward to conducting a second EPR of China in the not-too-distant future.

Between 2007 and 2013, I served as OECDs contact point in Beijing. These six years were an unforgettable chapter in my life, as they offered me the opportunity to observe first-hand the Chinese governments unique approach to steering the worlds second largest economy and to grasp its unwavering determination to improve the lives of its almost 1.4 billion citizens.

I personally witnessed the growing co-operation between China and the OECD, and I can only say that this progress would not have been possible without the sustained enthusiasm and support of many Chinese colleagues and friends in the Ministry of Commerce and other partner institutions. Many times did I

hear them praise the OECD, its unique Committee-based structure, its increasing contribution to global governance and its forward-looking policy analysis on a wide range of challenges that are common to nations around the world. I am honoured to have been in the forefront when we started collaboration with important institutions such as the Central Party School and initiated collaboration with the NDRC on the planning process. Looking ahead, I believe the MOU signed by Secretary-General Gurra with Minister of Commerce Gao Hucheng will give a new impetus to our collaboration, ensuring its effectiveness and reinforcing its enduring impact over the years to come.

The Working Group on Bribery in International Business Transactions highly values its strong collaboration with China. China began participating in meetings of the Working Group in 2007 and our partnership has grown steadily ever since. In recent years, China has made progress in combating bribery in international business transactions. This progress most notably includes the criminalisation of foreign bribery in May 2011 and Chinas commitments under the 2013-2014 G20 Anti-Corruption Action Plan, which include ongoing active engagement with the Working

Group, ensuring the high standards of criminalisation and enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and exploring adherence to the Convention. In August 2014, our partnership culminated in a highly successful joint OECD-China workshop on combating transnational business bribery held in Beijing. I look forward to building on this strong momentum to the mutual benefit of China, the OECD, the Working Group and the fight against transnational business bribery.

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2007

Aart JACOBIAmbassador of the Kingdom of the Netherlands to the Peoples Republic of China

The Netherlands was one of the founding members of the OECD in 1961. Both the collaborative approach of the OECD as well as its focus on a broad approach of sustainable development are important to the Dutch government.

I am convinced that, against a background of development and challenges worldwide, sustainable development will become an even more important and binding topic in the collaboration between China, the OECD and the Netherlands in the future.

Also in the bilateral relationship between the Netherlands and China, the OECDs work is relevant. For example, Dutch businesses here

are expected to comply with the OECD Guidelines for multinational enterprises. Dutch businesses offer innovative approaches and technologies that support greener growth, while providing a safe and healthy working environment.

Furthermore, the Netherlands embassy literally provides a home for the OECD by housing the OECD representative office in the embassy building. This illustrates our close relationship and makes our contact very straightforward.

Building on the past twenty years of collaboration between the OECD and China, I stand ready to support it in the future in order to reach tangible results to the benefit of all parties involved.

2007 Tsinghua University professor Xue Lan speaking at the High-Level International Business Symposium on China and R&D Globalisation: Integration and Mutual Benefits, Beijing

2007 OECD Deputy Secretary-General and Chief Economist Pier Carlo Padoan in

a bilateral meeting with Vice Minister of Science and Technology Li Xueyong, Beijing

2007 Vice Minister Li Xueyong speaking at the conference on Review of Chinas National Innovation System: Domestic Reform and Global Integration, Beijing

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