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Statement by H.E. Ambassador Liu Zhenmin, Deputy Permanent Representative of the Permanent Mission of China to the United Nations, at the High-level Dialogue on Financing for Development
New York, 24 October 2007

2007/10/24

Mr. President,

The Chinese delegation associates itself with the statement made by Pakistan on behalf of the Group of 77 and China. We wish to thank the Secretary-General for his report on financing for development.

Financing for development is an issue that concerns the international community as a whole. As it is agreed in the Monterrey Consensus, developing and developed countries should establish a new partnership, take comprehensive measures both domestically and internationally, enhance policy continuity and consistence, and mobilize capital from all channels to promote common development. The Chinese delegation hopes that this high-level dialogue could give new impetus to the financing for development process.

In the past two years, stakeholders have gained a deeper understanding of the policies and means concerning financing for development. Debt relief arrangements have helped relieve developing countries of some of their debts. Thanks to the vigorous efforts made by developing countries to reform their economic and financial systems, increase investment in human resources development and infrastructure, and promote the stability of the economy, developing countries have seen more inflow of private capital, and some of them have improved their trade competitiveness and increased export. Nevertheless, there still exists a huge financial gap if poverty is to be eradicated and the internationally agreed development goals, including MDGs, are to be achieved. Private investment has bypassed many poor countries that are in greatest need of capital. The year 2006 saw a reduction of ODA from the level of 2005. New manifestations of trade protectionism have emerged, and that has plunged the export of many developing countries, especially the LDCs, into grave difficulties.

There is no short-cut to the settlement of these problems. Integrated measures and various means must be employed to finance through all channels, including mobilizing domestic fund, attracting international private investment, providing ODA and debt relief, as well as improving the international monetary, financial and trade regimes.

As poverty and underdevelopment are mainly suffered by developing countries, the most difficult part of financing for development is to mobilize fund for developing countries. The biggest obstacle to financing for development is the innate deficiency suffered by developing countries due to their long-term backwardness. In the light of this, the international community should make constructive intervention, rather than rely solely on the market force. On the one hand, it needs to provide financial assistance to help developing countries resolve the pressing issue of development; and on the other, it should create a favorable external environment for developing countries to build their capacity for mobilizing fund through their own efforts. The Chinese delegation holds the view that the following aspects should be attached enough importance:

First, encourage and support capacity building by developing countries. Both mobilizing domestic capital and attracting foreign investment require basic qualifications in terms of infrastructure, legal system and management capability. International institutions and donor countries should take into account the needs of recipient countries when they provide technical assistance to support developing countries in reforming economic and financial systems, enhancing the rule of law, eliminating corruption and establishing public-private partnerships. "Policy space' is needed in this regard to reflect the demand of developing countries to work out and implement development strategies on the basis of their own priorities.

Second, increase ODA. ODA is an important symbol of partnerships for development. Though modest compared with private investment, it gives the best expression to the theme of development and plays an important role in helping resolve the pressing issue of development and in directing and mobilizing private investment. We hope developed countries will heed the voice of the vast number of developing countries and take concrete measures to honor their commitments to increasing ODA to ensure that, apart from debt reduction and emergency humanitarian assistance, more financial resources flows to developing countries, and the goal of allocating 0.7% of their GNI for ODA will be achieved.

Third, give full play to the role of trade as the engine of development. The international community should see to it that the multilateral trading regime is open, fair, nondiscriminatory and rules-based. Concrete and effective measures need to be taken to help increase the competitiveness of developing countries and give play to their comparative advantages. It is our hope that the Doha Round negotiations will achieve its goal as a development round, effectively address the concerns of developing countries and come to an early conclusion.

Fourth, address new problems and guard against financial risks. Recent years have witnessed greater imbalances in the global economy and increasing complexity and unpredictability in the financial market. Countries and the international organizations concerned should make concerted efforts to better manage the flow of international capital, and prevent and fend off financial risks, so as to ensure a stable environment which is conducive to global development.

Fifth, promote the reform of the international financial architecture. The deficiencies in international financial system and rules are an important factor affecting the settlement of issues related to financing for development. The reform of the international financial regime should reflect the changes in the international economic landscape by taking full account of the actual needs of developing countries and increasing their voice and representation.

Mr. President,

The Chinese Government takes reform and opening up as a fundamental national policy. We will continue to improve macroeconomic regulation, firmly push ahead with the reform of the financial system, and give full play to the potential of domestic savings and investment. At the same time, we will create an enabling environment for attracting foreign investment, improve our capacity to address financial risks, and maintain the sustained and rapid development of the economy.

As a developing country, apart from addressing its own difficulties in financing for development, China has done what it can to provide assistance to other developing countries in diversified forms such as debt relief, trade preferences, infrastructure development, productive investment and economic exchanges. Our aim is to help them increase the capacity for sustainable development and achieve common progress. The Chinese Government will continue to strengthen consulations and share best practices in financing for development with all parties, so as to deepen mutually beneficial cooperation and promote common development.

Mr. President,

The Follow-up International Conference on Financing for Development will be held in Doha next year. It will be an important opportunity for us to comprehensively review the implementation of the Monterrey Consensus and discuss ways to further strengthen cooperation. We hope parties concerned will conduct pragmatic discussions in the light of the current situation and push for substantive progress in international cooperation in financing for development, so as to make contributions to poverty eradication and common development.

Thank you, Mr. President.

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