Introduction

　　It is a great pleasure to be here for the China investment forum. The context is excellent, just as excellent as the weather outside as FDI into China is expected to reach 47 Bn. USD in 2001 and top 50 Bn. USD in 2002. The EU plays a key role as it Is now the first foreign Investor in China, holding the second place after Hong Kong.

　　In my talk today, I want to reiterate the Importance of Chinese accession to the World Trade Organisation, and particularly now that It has at last been formally agreed, at Doha just three weeks ago. And I would like then to look ahead a little bit about the challenge the EU and China will face in the Doha Development Agenda.

　　China WTO accession

　　China's accession to the WTO will be a major challenge. It implies the opening of many sectors to outside investment, in particular in the services field: telecommunications, banking, insurance, distribution, etc.

　　I cannot deny that it will be major challenge for the companies in these sectors which have long been shed from foreign competition to adapt and raise their competitiveness to international standards. At the same time, the transition will be gradual, extending over a number of years, allowing for smooth adjustment, rather than big bang. And the opening is also limited, calling in many cases for joint-ventures rather-than fully owned foreign invested enterprises, thus allowing Chinese firms to fully benefit from technology and investment from abroad.

　　The role of the Chinese government in this context will be shifted from directly running the economy to creating the right legal framework for the market: many laws will have to be changed. We know that this is a major challenge for China and, as Mr. Lamy just stated during his speeches in Shanghai and Beijing,the EU fully accepts that progress is incremental. Our hope and belief is that .accession will "steer not strain" the economy In China. Entering the world trading system will be a catalyst for Chineae firms to become more efficient to show they can compete on fair terms with the rest of the world. And Chinese WTO accession should serve to boost the rule of law in China, such as the principles of transparency, non-discrimination, efficient administration and independent judicial review.

　　The second challenge, however, is to implement effectively what has been agreed in Chinese WTO accession. As of 11 December, when China formally enters, the real work begins, and we are of course fully aware of our role in assisting China in this major effort. The EU already has quite a significant co operation programme with China, and projects of about 20 million Euro related to trade issues are at the centre of it. On top of that, we are ready to put in even more money, and have a number of ideas- __ including how to help China develop further its legal and regulatory framework in a limited number of strategic sectors.

　　This assistance, of course, goes hand in hand with careful monitoring of how agreements are implemented. We want to work with both China and EU businessmen to ensure that those seeking to take up new business opportunities are fairly treated. But this does not mean dragging China into the WTO dispute settlement procedure at every hint of a problem. This should be reserved only to those cases where other courses of action have produced no results. Much better to take a constructive approach which recognises that given the size of the challenge, there are bound to be short -term frustrations and difficulties, but aims to build confidence in the system.

　　Doha development agenda

　　China has started to play a positive role in international trade affairs by supporting actively the launch of a new round of trade talks at Doha. This dispels for good any rumour that China would not play a positive and responsible role in multilateral affairs. The launch of trade talks in Doha will mean that the one-way process of requests to China that it had during the process of accession to the WTO is now over. It is time now for a two-way process where China will be able to put forward its requests to other WTO Member, including the EU. And we expect China to be on the offensive on many issues given that it is now the world's 4th largest exporter after the EU, the USA and Japan.

　　One important aspects of the decisions taken at Doha is the Agreement to launch negotiations on investment at the Vth Ministerial conference in 2003. In order to prepare for these negotiations, work has already started in the Committee on Trade and Investment in many areas, and in particular on non discrimination which is the key to creating a predictable, fair and transparent environment for Investment. The contribution of China as one of the main recipients for FDI in the world will be essential.

　　Conclusion

　　Mr. Lamy concluded both his speeches in Shanghai and Beijing by saying that the EU China relationship has never been stronger. It was impressive to see during his meeting that EU China coordination over the whole range of multilateral matters had now started in earnest and will continue after 11 December. Implementing its commitments will be a major challenge for China:
we are fully aware of the extent of the changes that have to be made . It is also a new opportunity as China will play a central political role in the WTO and will be able to defend the right of its exporters in Geneva and expand their access to other markets in the framework of the new round of trade talks. As China becomes a full WTO Member, today's discussions on investment in China will now have to be seen in the wider context of the negotiations on Trade and investment which will start in two years in the WTO.