|Statement by Ms. Dong Zhihua, Counselor of the Permanent Mission of China to the United Nations, at the Second Committee of the 65th Session of UNGA on Agenda Items 18 (b): International Financial System and Development and 18(c): External Debt and Development|
At the outset, I would like to welcome the reports submitted by the Secretary General under sub-items b and c of this agenda item. The Chinese delegation associates itself with the statement made by the representative of Yemen on behalf of G77 and China.
At present, the global economy has shown a trend of overall recovery. However, the basis for the economic recovery is not solid, the process is uneven and uncertainties still abound. The profound impact of the international financial crisis has not been fully eliminated and the systemic and structural risks of the global economy remain prominent. We must learn lessons from the international financial crisis, make in-depth analysis of the defects of the current international financial system, consolidate and expand the results achieved in dealing with the international financial crisis, speed up the establishment of a new international financial order which is fair, equitable, inclusive and orderly and promote strong, sustainable and balanced growth of the world economy. China is of the view that in pushing forward the reform of the international financial institutions, we should focus on the following aspects:
First, the International Monetary Fund (IMF) should advance the 14th round of review of quota shares as soon as possible, fulfill the commitment made at the Pittsburgh Summit of G20 to shift at least 5% of quota shares from the developed countries to emerging markets and developing countries, and protect the voting power of the poor members in the IMF.
Secondly, the IMF should accelerate the oversight reform in order to strengthen the surveillance over the macro-economic policies of countries, particularly the major reserve currency economies, and strengthen the monitoring of the mature financial markets and cross-border capital flows. It should focus, among others, on identifying global potential risks, issue early warning in a timely manner and take preventive and control measures in order to maintain the stability of the international financial and monetary system.
Thirdly, the World Bank should continue to deepen its governance reform and gradually achieve the objective of equality in voting power between the developed and the developing countries through periodic shareholding reviews. China fully supports the increase of voting power of the developing countries in the International Development Association and the International Finance Corporation. We also support the increase of representation of borrowing states in the replenishment conference of the IDA.
Fourthly, China supports increasing resources of the World Bank and multilateral development banks. Such an increase should follow the principle of balancing rights and obligations and combining assessments and voluntary contribution. Priority should be given to selective increase or universal increase. Then, means of market financing can be resorted to. The newly increased funds should first and foremost be used to help the developing countries.
Fifthly, the international financial regulatory reform should adhere to the principle of simplicity, operability and effectiveness and should seek to address the root causes of current regulatory deficiencies. While enhancing the coherence of international core regulatory principles, adequate consideration should be given to the difference in the phase of development and level of market maturity of various countries. China is in favor of raising all financial regulatory standards. We appreciate the efforts made by various parties to solve the problem of insufficient liquidity at the time of crisis, including the initiative of establishing a “financial safety net” and making the Chiang Mai initiative multilateral.
Sixthly, the United Nations plays an irreplaceable role in global governance. The G20 and the Bretton Woods institutions should strengthen coordination and cooperation with the United Nations, enhance the inclusiveness and transparency of their decision-making processes, effectively accommodate the legitimate concerns of small and medium developing countries and make joint efforts to promote the world economic recovery, poverty eradication and sustainable development.
The debt problem has long plagued the economic and social development of the developing countries. As a result of the financial crisis, most developing countries have experienced economic slowdown and decrease of export earnings, remittance and investment. The frequent exchange rate fluctuation and rise in the cost of financing have heightened the debt vulnerability of many developing countries, particularly the LDCs. The report of the Secretary-General (A/65/155) indicates that, from 2007 to 2008, the total volume of external debt of developing countries increased by 8% and reached 3.7 trillion dollars in 2009. The report puts forward some policy recommendations to deal with the debt crisis. They are worthy of our serious consideration. Proper solution of the debt problem and relief of the debt burden of the developing countries are an important prerequisite for the achievement by the developing countries, the LDCs in particular, of the goal of eradicating poverty and attaining the MDGs. We believe that the international community should pay great attention to the following points:
First, as major creditors, the developed countries should fulfill their ODA commitments in earnest and increase debt relief so as to enable the developing countries to completely free themselves from the vicious debt cycle and achieve economic development. The financial crisis should not serve as an excuse for the developed countries to reduce assistance.
Secondly, the developed countries should further open their markets to the developing countries and reduce or remove tariffs so as to facilitate the export of the developing countries. This will help maintain the debt sustainability of the latter.
Thirdly, the relevant international and regional financial institutions should increase technical assistance to the developing countries to help them build capacity and improve the ability to manage their debts and engage in debt negotiations so as to achieve and maintain debt sustainability.
China’s Premier Wen Jiabao recently announced at the UN High-Level Meeting on the MDGs that, by the end of 2009, the Chinese government had cancelled debts worth 25.6 billion RMB yuan owed by 50 heavily indebted poor countries (HIPCs) and least developed countries (LDCs). We will also cancel their debts associated with the outstanding governmental interest-free loans that mature in 2010. China will further strengthen and improve its foreign assistance, work to promote the economic development and the improvement of people’s lives in developing countries and make our due contribution to the achievement of the MDGs on schedule.
Thank you, Madame Chairperson.