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Statement by Ms. Dong Zhihua, Counselor of the Chinese Delegation at the Second Committee of the 66th Session of the UNGA on Agenda Items 17(b): International Financial System and Development and 17(c): External Debt Sustainability and Development

2011/10/10
 

Mr. Chairman,

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 Argentina on behalf of G77 and China.

At present, the global economic recovery is slowing down, with instabilities and uncertainties on the rise. Risks related to the sovereign debts of a number of countries are growing, leading to severe volatility of the international financial market with detrimental impacts on international financial stability and global economic recovery. In the face of this complex international economic and financial situation, countries should continue to help each other, further strengthen the coordination of their macro-economic policies, commit themselves to sustaining economic growth and promoting stability of the financial markets, take practical and effective coping measures in light of their respective economic situations, and work together to push for the realization of strong, sustained and balanced growth of the world economy in the medium-term.

The major developed countries should maintain economic recovery and financial stability, properly handle the relationship between short-term economic growth and medium-term financial consolidation, and minimize the negative spill-off effects of reform, so as to create an enabling external environment for the economic development of developing countries. The international community should pay attention to the serious difficulties and crises facing developing countries, the LDCs in particular, and accelerate the fulfillment of commitments in such areas as development assistance, financing for trade, and concessional loans, so as to help developing countries stabilize their financial markets and elevate the level of economic development.

As regards the reform of the international financial system, China believes that the objective is to establish a fair, just, inclusive and orderly new international financial order, and the reform ought to be implemented in a comprehensive, balanced, incremental and result-oriented manner. China believes that the following points are particularly important:

First, improve the international economic and financial governance structure and genuinely increase the voice and representation of developing countries;

Secondly, improve the global financial regulatory system to step up the monitoring of the developed economies which host important financial centers and their macroeconomic policies, strengthen the regulation of cross-border capital flows and bulk commodity derivatives and reform the sovereign credit rating mechanisms;

Thirdly, improve the international monetary system, boost the mechanism for regulation and control over the issuance of reserve currencies and maintain the relative stability of the exchange rates of major reserve currencies; and

Fourthly, strengthen the development and poverty-reduction functions of the international financial institutions, with a view to bridging the gap between the North and the South.

Following the outbreak of the international financial crisis, China took decisive actions to implement a package program for increasing domestic demand and promoting steady and rapid economic development and achieved remarkable results, thus contributing to the global economic recovery. We will continue to pursue a proactive fiscal policy and a prudent monetary policy, properly handle the relationship among maintaining steady and rapid economic development, restructuring the economy and managing inflation expectations, keep the overall level of prices stable, prevent major economic fluctuations, strive to attain the goals for economic and social development set for this year, and further contribute to promoting strong, sustained and balanced growth of the world economy.

Mr. Chairman,

The debt problem is one of the major obstacles facing the developing countries, the LDCs in particular, as they strive for economic growth and the attainment of the MDGs. In the wake of the international financial crisis, the external debts of developing countries have become even more unsustainable. The international community should do more to create conditions for the development of and debt-relief for developing countries. As major creditors, the developed countries should honor their debt-relief commitments, increase net capital input and scale up assistance. The international financial institutions should augment capital support and technical assistance to developing countries and help them build up capacity. Assistance and debt relief efforts should respect country ownership and be aligned with the development strategies of the recipient countries.

As a developing country, China always takes the debt problem very seriously. Over the years, China has provided, within its capacity and under the framework of South-South cooperation, economic and technical assistance to friendly developing countries. At the same time, we pay great attention to debt sustainability of the recipient countries. When recipient countries encounter difficulties in paying off the maturing debts that they owe us, we would normally, at their request and through bilateral friendly consultations, come up with proper arrangements in the form of either debt rescheduling or cancellation, so as to reduce their burden to the extent possible. Since 2000, China has announced on six occasions unconditional cancellation of matured interest-free government loans owed by heavily indebted poor countries and the LDCs. By the end of December 2010, China has cancelled altogether 388 debts owed by 50 HIPCs and LDCs.

During the 12th Five-Year Plan for National Economic and Social Development which starts this year, we will, under the framework of South-South cooperation, increase input in foreign assistance, optimize its structure and raise the ratio of gratis assistance. Together with the afore-mentioned debt reduction and cancellation, these measures will help lighten the debt burdens of the recipient countries and promote their economic development. China stands ready to continue to strengthen exchanges and communication with other countries on the subject of reducing the debt burden of developing countries and contribute to the economic and social development of the latter.

Thank you, Mr. Chairman.

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