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Remarks by H. E. Foreign Minister Yang Jiechi at the United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development

2009/06/24

Tackle Financial Crisis and Achieve Common Development 

Remarks by H. E. Yang Jiechi Minister of Foreign Affairs of the People's Republic of China at the United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development 

New York, 24 June 2009 

 Foreign Minister Yang Jiechi makes remarks at the UN on tackling financial crisis and achieving common development
(Photo Courtesy: Xinhua / Shen Hong) 

Mr. Chairman,
Dear Colleagues,
Ladies and Gentlemen,

The Conference on the World Financial and Economic Crisis and its Impact on Development was mandated at the United Nations Follow-up International Conference on Financing for Development in Doha at the end of last year. Over the past half a year, all parties concerned have made active efforts in preparation for the conference. On behalf of the Chinese Government, I applaud the productive work of President Brockmann, the facilitator and the UN Secretariat and I appreciate the spirit of mutual understanding and cooperation demonstrated by all member states.

The United Nations is the most universal, representative and authoritative inter-governmental organization. It is an important mechanism in promoting international economic and development cooperation. China supports the UN in playing a bigger role in tackling the international financial crisis and hopes that in a spirit of win-win partnership, we can explore, through this meeting, ways to counter the international financial crisis and promote common development, send out a strong signal that the international community is united as one and is engaging in sincere cooperation, and further build international consensus and step up development cooperation.

Mr. Chairman,
Dear Colleagues,

As the international financial crisis is still unfolding, resources for international development cooperation are dwindling. Though developing countries did not cause this crisis, they have turned out to be the hardest hit. They now find themselves in a difficult situation of falling external demand, contracting trade, withdrawal of foreign investment and declining remittance from overseas.It is more difficult for them to access financing from abroad and their external environment for development is worsening.

According to World Bank forecasts, there will be a major drop in the growth rate of developing countries in 2009, with an increase of 55-90 million people living in absolute poverty. And according to the UN Food and Agriculture Organization (FAO), the population in chronic hunger will soar to one billion in 2009 from 850 million before the crisis, accounting for over 18% of the total population in developing countries. It is now an indisputable fact that developing countries have suffered a serious setback in their overall development. The financial and economic crisis has triggered an unprecedented development crisis.

Should the development situation continue to worsen, and should difficulties continue to rise for developing countries, the whole world will feel the pinch in this era of economic globalization. It will hold down global demand and slow the pace of global economic recovery. The international community should therefore look at the development issue from a broader perspective and in a wider context, regard developing countries as an important force in addressing the international financial crisis and achieving global economic recovery, and take resolving the development issue and easing the development crisis as a key part of the effort to tackle the financial crisis. To this end, we should deepen global development partnership, strengthen development institutions, increase input in development and ensure unimpeded progress towards the attainment of the Millennium Development Goals. China suggests that efforts be made in the following four areas:

First, coordinate macroeconomic policies. When introducing fiscal, monetary, trade and employment policies in response to the crisis, all parties, developed economies in particular, should take into consideration their possible external impact and make every effort to avoid any negative spillover effect on developing countries. While striving for economic recovery, the international community should fully accommodate the national conditions and real needs of developing countries, and foster a good external environment for their development.

Second, promote growth of international trade. The international community should firmly oppose trade protectionism, open markets to developing countries, particularly the least developed countries, and lower or exempt their tariffs. We should step up efforts to increase aid-for-trade and help developing countries enhance capacity building. We should build on the progress already made in the Doha round negotiations and make vigorous efforts to achieve the goals set for this development round at an early date in accordance with the existing mandate.

Third, intensify international development cooperation. Developed countries should implement the Monterrey Consensus, fulfill the commitment of using 0.7% of their gross national income (GNI) as official development assistance and act further to reduce and cancel the debt of developing countries. International financial institutions should establish financial rescue mechanisms that can provide prompt and effective assistance to developing countries.Parties concerned should earnestly implement the consensus reached at the G20 London summit to ensure that international financial institutions will substantially increase long-term development investment, provide on a priority basis financing support to developing countries with no harsh conditions attached, and use its new resources mainly to assist developing countries.

Fourth, broaden and deepen South-South cooperation. Shrinking external demand is a common challenge facing developing countries, and to strengthen South-South cooperation can help ease the problem. Developing countries should increase trade and investment cooperation, open markets to each other, and work together to foster new areas of growth. It is important for developing countries to share development experience, learn from each other and draw on each other's strengths.We should develop innovative ways of cooperation, expand cooperation channels and upgrade the level of cooperation among developing countries.

Mr. Chairman,
Dear Colleagues,

The global financial crisis has laid bare the deficiencies of the existing international financial system, especially the inadequate representation of developing countries in international financial institutions. The international community should adopt a long-term view and act in a comprehensive, balanced, incremental and results-oriented manner to build an international financial system that is fair, just, inclusive and orderly and reform the governance structure of international financial institutions so as to shape an institutional framework that serves the sound and steady economic and financial development of the world.

This also represents a major effort to give due respect to the concerns of developing countries and address the issue of development. Efforts in this regard should include the following:

First, continue to improve the governance structure of the IMF and the World Bank, genuinely increase the representation and voice of developing countries and let more people from developing countries assume senior management posts in these institutions. Relevant international financial standard-setting institutions should take in more developing countries and allow them to fully participate in the deliberation and decision-making process as equal members.

Second, the IMF should be fair, just and balanced in supervising the macroeconomic policies of its members. The practice of focusing only on developing countries while forgetting or overlooking the major reserve currency-issuing economies must be changed. At the same time, it is necessary to establish and improve international financial supervision and regulation mechanisms.

Third, stabilize the international financial markets. Countries across the world have suffered heavy losses from the ongoing global financial crisis and economic recession. One important consensus we have reached upon reflection is that it is important to keep the exchange rates of major reserve currencies relatively stable and promote a diversified and rational international monetary system. This will enable developing countries to have more choices, better avert risks and make more effective use of external funds for their development.

Mr. Chairman,
Dear Colleagues,

China actively promotes and participates in international development cooperation. To pursue common development is a major pillar of China's foreign policy. Since the outbreak of the international financial crisis, China has been calling on the international community to promote development as an important way to tackle the crisis and has vigorously pushed forward and participated in relevant international cooperation.

--- We have taken an active part in the trade finance program of the International Finance Corporation (lFC) and provided US$1.5 billion in financing support.

--- We have provided assistance to some developing countries to the best of our ability and signed with some countries and regions bilateral currency swap agreements worth RMB 650 billion.

--- We have agreed with the IMF to help it increase resources by purchasing its bonds and our financing support will be used mainly to help developing countries.

--- We have been actively involved in the development of a reserve pooling arrangement. Contribution from China will account for 32% of the total US$120 billion fund.

--- We are working hard to follow through on all the measures to assist Africa announced at the Beijing Summit of the Forum on China-Africa Cooperation and implement the measures China proposed at the UN High-level Event on Millennium Development Goals to help other developing countries speed up development.

--- We will, within the framework of South-South cooperation, continue to do what we can to assist other developing countries.

China is ready to work with the rest of the international community in a spirit of partnership for win-win development to tackle the financial crisis, achieve early recovery of the world economy, contribute to the attainment of the MDGs on schedule and build a harmonious world of enduring peace and common prosperity.

Thank you, Mr. Chairman.

 

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