Mr. Chairman:

Over the past year, it is encouraging to see the world economy has moved out of the shadow of financial crises and the overall situation has been improving. However, it is necessary not to overlook a harsh reality, that is, the growing development gap between the North and the South, as pointed out by many countries during the general debate at the Second Committee this year. A large number of developing countries are beset by worsening poverty and are being increasingly marginalized in the process of globalization. In the view of the Chinese delegation, how to integrate developing countries into the world economy to enable them to join globalization, so as to achieve development and eliminate poverty, will be a serious challenge confronting us in the new century. One of the most important means of dealing with this challenge is to raise sufficient resources for development.

The Chinese delegation would like to express its gratitude to the secretary-general for his report on this sub-item. As can be seen in this report, the current situation in the field of financing of development is far from satisfactory. In 1999, net financial flows to developing countries continued to decline. In Southeast Asia, which was severely affected by financial crises, net financial outflows represented a large increase over 1998. The situation was basically stable in Africa, but the overall level was too low, far from meeting its needs. All this is in sharp contrast to the thriving situation of the world economy as a whole, and also clearly points out the direction of our efforts.

Mr. Chairman,

The United Nations has been considering the issue of financing of development for many consecutive years. The Chinese delegation holds the view that in order to achieve progress in the field of financing of development, it is the most fundamental and urgent to reform and strengthen the existing international financial system. Globalization has led to rapid changes in the international economic environment. To adapt to the new situation, the financial system must be responsive in terms of the challenges confronting the developing countries as well as in relation to the objectives set by the major global conferences in the 1990s and the Millennium Summit. In the previous two years, the Second Committee of the General Assembly adopted two very important resolutions, " financial crises and its impact on growth and development, especially in the developing countries" and "toward a stable international financial system, responsive to challenges of development, especially in the developing countries." The resolutions reflected the consensus of the international community in this regard. In the process of reforming the financial system, it is important to increase transparency and information flows, to enhance financial regulation and supervision, to adopt appropriate exchange rates and capital account regimes, and to promote the private sector's participation in the resolution of crises, but, having developing countries participate in the decision-making process of financial institutions on an equal and effective basis is of critical importance to realize the goal of establishing " an open, equitable, rule-based, predictable, and nondiscriminatory multilateral trading and financial system", as provide by the Millennium Declaration. The United Nations, as the most universal and most representative organization in the world, should play an important role in this process on the basis of its comparative advantages. At the same time, the United Nations should also improve its cooperation with Bretton Woods Institutions, the World Trade Organization and other multilateral agencies and promote their policy