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Statement by H.E. Ambassador Zhang Yishan Head of the Chinese Delegation and Deputy Permanent Representative of China to the UN At the UN High-level Dialogue on Financing for Development
28 June 2005, New York

2005/06/28

Mr. Chairman,

China support the statement made by Jamaica on behalf of G77 and China.

Without financial resources, development is out of the question. With regard to the ways of financing for development, the Monterrey Consensus has outlined a comprehensive and clear road map, and the international community has conducted extensive exploration and practice. However, the steps of action are falling far behind the speed of words. While we are engaged in lengthy discussions on financing, there are 1 billion people in the world living with less than one dollar a day, 150 million school-age children in developing countries out of school, and 15 million children under 5 malnourished. Furthermore, for every minute as we speak, 21 children under 5 die prematurely and 11 people lose their fight against HIV/AIDS, malaria and tuberculosis. Undoubtedly, satisfactory financing will save millions of lives and change the destiny of billions. What we need now is action and action again. Only by enhancing political will through partnerships, and turning consensus and commitments to actions, can we succeed in realizing at the global level internationally agreed development goals, including the MDGs.

It is our shared responsibilities to adopt systematic and comprehensive actions to mobilize all forces and raise sufficient funds for poverty eradication and common development. Secretary-General’s report and other relevant documents have embodied proposals made in recent international discussions on financing for development, including many useful ideas. We hope that through dialogue and exchange of view at this meeting, we will reach consensus in some areas with follow-up actions.

Mr. Chairman,

The most urgent task in financing for development is to bridge the financial gap. Due to historical and current reasons, developing countries have not, over the past decades, been able to get out of their financial difficulties. Coupled with shortage of domestic financial resources, international commitment to financial aid has never been fully fulfilled, and “development deficit’ has remained unsolved for a long time. Many developing countries, and especially African countries and the LDCs, are bogged down in “poverty traps”, lacking the essential resources for national infrastructure, social services and public management. In some countries, the payment for heavy debts has taken away their valuable resources, which would otherwise be spent on development. Such problems must be corrected. Since the “Marshall Plan” had helped to put post-war Europe back on its feet, we have reason to believe that largely increased international aid will help revitalize developing countries.

While developing countries continue to mobilize domestic resources and formulate and implement national development strategies to eradicate poverty, the international community should respond actively and greatly reinforce financial aid.

First, ODA should be greatly increased. On the basis of five European countries reaching ODA targets, the EU has taken an important step to formulate the timetable for realizing ODA targets. We hope that other developed countries will also follow their steps to reach ODA targets at an early date.

Second, debt cancellation and reduction should be extended and deepened. We welcome the initiative of G8 financial ministers to exempt the debts of 18 HIPCs. We hope to see further debt relief for other heavily indebted countries, so that financial resources will be used to meet the urgent needs of development.

Third, innovative financing should be promoted. We welcome bold exploration and practices by different parties for innovative financing mechanism as a complement to ODA. We look forward to the IFF pilot project, which will hopefully provide experiences for more extensive financing arrangement.

Fourth, a monitoring mechanism should be established. We are in favor of establishing a mechanism to intensify supervision on follow-up actions in financing for development, so as to ensure timely delivery of high quality ODA.

Mr. Chairman,

From the long-term point of view, the key for financing for development lies in enhancing the capacity of developing countries for self-financing and diversifying their ways and means for financing. This will be a long and arduous task. To support the developing countries, the international community needs to take actions in the following two areas: Firstly, it is necessary to help developing countries to strengthen their capacity-and- institution-building, that is to render human or intellectual support. Secondly, it is important to create a favorable external environment, and especially a fair and equitable international economic system, that is to render policy and machinery support.

In terms of capacity building, developing countries have made unprecedented progress in recent years in structural reform, rule of law, better management, counter corruption, public participation and partnership between public and private sectors. The international community has attached equal importance and offered assistance. However, the current international efforts to support developing countries in capacity-and-institution-building are still rather generalized, and some are even mixed with conditionality aimed at putting pressure on recipient countries, which is not helpful but harmful. The international agencies and donor countries should fully listen to the views of the recipient countries, and tailor their capacity-building programs to the actual needs and national conditions of the recipient countries. The developing countries should be encouraged to compare different experience and practice, including among themselves, so as to learn from exchanges and cooperation.

In order to create an enabling external environment and solve systemic problems for developing countries, we think it is essential to give up old concepts and reflect equality and fairness.

Firstly, the international community should fully understand the special difficulties faced by developing countries in the process of globalization. They should be allowed to choose policies suited to their national conditions and given sufficient “policy space”. High-handed acts will only aggravate their difficulties.

Secondly, countries should strengthen cooperation and encourage flow of FDI towards developing countries. While the developing countries are committed to improving domestic investment environment, the international community and especially the developed countries have the responsibility and obligation to create conditions and encourage flow of FDI towards developing countries. Countries and international agencies concerned should also make joint efforts to tighten control on international financial flow and reduce financial risks.

Thirdly, trade as a financing means should be greatly advocated. The international community should build a multilateral trade system that is fair, non-discriminatory and rule-based. It should especially adopt specific and forceful measures to support the export of developing countries. In this area, it is essential to resist the practice of certain countries in using trade protectionism to impair the comparative advantages of developing countries. We hope that the Doha Round of Talks will focus on development, give priorities to such concerns of developing countries as implementation issues, agricultural product subsidies, and “special and differential treatment”, and conclude at an early date.

Fourthly, the voice and participation of developing countries in international economic decision-making should be strengthened. Loopholes in international systems and rules form an important restraint for developing countries to find effective financing ways. They must be corrected. We hope that the developed countries will adopt a more open attitude and effective measures to let developing countries become true equal participants in the decision-making process.

Mr. Chairman,

In recent years, the Chinese Government, based on China’s national conditions, has formulated and pursued a sound macro economic policy, and committed to improving rule of law, encouraging competition, revitalizing enterprises, nurturing capital market, consolidating financial system, tapping domestic saving and investment potentials, and upgrading abilities to respond to financial risks. Certain progress has been made, but we are still confronted with many difficulties and challenges. We wish to work with all other countries, through bold experimentation and pragmatic implementation, to make available more funds for development to achieve the internationally agreed development goals and bring benefit to all the people.

Thank you, Mr. Chairman.

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