H.E. Minister Xiang
As the curtain of the 21st century and new millennium raises, it is opportune for all the heads of states and other delegates to gather at Monterrey to discuss the issue of financing for development, which has a direct bearing on the future of the mankind. Naturally, all the people who long for happiness are concerned about the outcome of the conference.
On behalf of President Jiang Zemin, I wish to congratulate the convention of the conference. I also wish to express our sincere gratitude to President Fox for his kind invitation and the Mexican Government for all it has done in making this possible. Taking this opportunity, I wish to share with you the views of the Chinese Government on issues of development and its financing.
I. Establishing a global coordination mechanism for development in response to the challenges facing the world in achieving common development
At the turn of the new century, the world is faced with greater historical opportunities and unprecedented challenges in pursuit of its goal of common development and prosperity.
The cold war era of half a century is over. The people all over the
world shares the common aspiration that peace should replace war and development
overcome poverty. The world is now accelerating in its trend towards multi-polarization
and economic globalization, and the modern technology is progressing rapidly.
The mankind holds a bright prospect in its lofty causes of promoting development.
Out of the entire world population, there are 1.2 billion people who live under the poverty line, with less than a dollar a day. The developed countries takes a share of 86% in gross global product, and 82% of export market, whereas the developing countries only takes 14% and 18% respectively.
While some countries have to deal with their internal problems which are part of the troubles, the primary cause lies in the absence of a just and equitable economic order that facilitates the fair distribution of the benefits of globalization.
Globalization facilitates the free flow and allocation of resources across the world, contributing to their efficiency. However, it has its inherent asymmetric weakness, as is particularly demonstrated by the uneven mobility of different economic factors, which tends to induce uneven development globally. Globalization per se is not the key factor, one way or another; what matters is the way it is managed with a view to maximizing its benefits and minimizes its negative effects. Regrettably, however, the existing international economic order has failed to address the problems inherent in the process of globalization. Worse, it has exacerbated intensely the irrationality of the process, thus becoming the root cause of the widening gap between the north and the south.
To break way from the difficult situation and to respond to the challenges of development, it is necessary for each and every member of the international community to do their best to roll back all barriers, internal or external. To this end, we call for the establishment of a global coordination mechanism for development between the north and the south. Such a mechanism should follow the following principles:
Firstly, it is necessary to establish a new international economic order that gets along well with the economic globalization to provide a favorable external environment for all the countries for developing their full potential. The new international economic order should:
Secondly, developing countries should affirm their ownership of their
II. Strive to establish an effective General Framework of Financing for Development
Monterrey offers us a historical opportunity. This has enabled us to move closer towards the long-awaited ideal of setting up a global coordination mechanism for development. To make such a mechanism viable, the most pressing task at hand is to establish an effective framework of financing for development.
Countries have to relay on its own powerhouse for its growth. An effective mobilization of its domestic resources constitutes one of the fundamental elements of development financing framework.
To fully mobilize domestic resources, there are three necessary conditions. The first is a sound and stable domestic political, economic and social climate. Effective mobilization of domestic capital and economic development is only possible under such a climate. The second is institutional innovation. Reform needs theoretical guidance and international experience. And a successful innovation in institutions in a country comes out of nothing but its people's unfettered thinking and creative practice. The third is a market system suited to its development stage and a macroeconomic regulatory framework chosen on the basis of the actual situations of a country. What is also required includes a sound public finance system, a highly efficient banking sector and an equitable social security system to meet the needs of development, and a series of appropriate fiscal and monetary policies to be implemented at the right time with a view to creating an enabling economic environment for sustainable growth, job opportunities and poverty reduction.
The core of establishing a general framework of financing for development is to build a new international economic order in alignment with the requirement of a global coordination mechanism for development.
To establish such a new international economic order, it is necessary to restructure the existing international financial, trading and economic system. As an integral component of the international economic order, the international economic system constitutes the critical institutional base that determines the way the developing countries get their equitable right to development. We stress that the following should be done for that purpose.
To establish such a new international economic order, the developed countries need to demonstrate their political sincerity and vigorously engage themselves in cooperation for the international development assistance. Globalization makes it imperative to establish a mechanism for income redistribution and benefit sharing at the global level, and to increase resource transfers from the developed to the developing ones. This mechanism should at least facilitate resource transfer through two channels. The first is the developed countries' ODA flows, at the targeted level of 0.7% of their GNP, to developing countries. And for that purpose a timetable must be set to reach this level as soon as possible. As a near-term goal, we call upon the donors to increase their contribution by US$ 50 billion over and above the current level. We appreciate the political commitment that has recently been indicated by some donor countries in this respect. Secondly, the multilateral development banks (MDBs), as an important link in the international development assistance system, should strengthen rather than weaken their role of resource transfer against the backdrop of globalization. The MDBs should rigorously observe their respective Articles of Agreement and regard their operational work for raising productivity and reducing poverty as their core mission and discharge their responsibility in resource transfer at the global level.
To establish such a new international economic order, the developed
countries are required to play a greater role in resolving the formidable
debt issues facing many developing countries so as to help release more
resources needed for their development. Over recent years, some countries
and international institutions have made efforts to help reduce the debt
of the HIPCs.
To establish such a new international economic order, the international
community is required to help reinforce the efforts of the developing countries
in attracting sustained, stable and orderly flows of private capital. In
the present-day world, private capital flows have become an important driving
force for economic development. We hold that the following should be done.
China remains a staunch supporter for the cause of global development.
For over half a century and particularly since the launching of China's reform and opening-up program two decades ago, our economic position and aggregate national strength have been markedly improved. The Chinese population, over 1.2 billion strong, have basically met their needs of food and clothing. And their living standards have improved substantially. China's stability and development constitute a tremendous contribution to the world peace and development.
Nevertheless, China remains a developing country. China still faces formidable challenges in many fields of endeavor for development. We have yet a long way to go and arduous tasks to tackle to achieve the goal of common prosperity for the entire nation.
We will continue to accord priority to development and structural readjustment
propelled by reform and opening-up as well as scientific and technological
progress. We will place the improvement of people's life at the heart of
all policies and programs and continue to promote progress in all our economic
and social dimensions. At Doha conference last November, China became an
official member of the World Trade Organization. China will further deepen
its reform, open wider to the outside world and present itself as a more
active member of the world community.
China's reform and opening to the outside world itself offers a tremendous opportunity for the global economic development. We will continue to be actively engaged in cooperation with the rest of the world on an equal and mutually beneficial basis.
In international affairs, China will continue to play its role as a
major peace-loving, just and responsible country. It will also join hands
with other members of the international community in dedicating themselves
to reforming the current international economic order and safeguarding
the equitable development of all the countries.
"When rationality reigns, the whole world becomes one coherent community."
This axiom, as propounded by an ancient Chinese sage as early as over two
thousand years ago, expressed the noble ideal of the mankind for solidarity
and peaceful co-existence for common interests. The world today leaves
much, much room for improvement. This regrettable reality makes it all
the more worthwhile to make our dream come true. The Chinese people will
stand by all the peace-loving people in this world and strive for common
development and prosperity.
I thank you very much.
Statements at the Conference