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Statement by Ms. BAI Yongjie, Counsellor of the Permanent Mission of China to the United Nations, at the Second Committee of the 63rd Session of the UN General Assembly on Agenda Item 47 (b): International Financial System and Development; 47 (c): External Debt and Development; and 47 (d): Commodities

2008-10-13 18:22

(13 October 2008, New York)

Mr. Chairman,

The Chinese delegation aligns itself with the statement made by Antigua and Barbuda on behalf of Group 77 and China.

Item 47 (b): International Financial System and Development

At present, the financial turmoil is becoming increasingly severe with crises looming everywhere. Having erupted from a highly developed country, the financial crisis is spreading all over the world, sparing neither developed nor developing countries. This is a trouble that has been brewing for quite some time. This financial crisis shows that the existing international financial system has deep-rooted problems and requires in-depth reform. In addition, the fluctuation of energy prices at high levels, the acute food security problem and the mounting pressure of inflation around the world have all exacerbated the uncertainty of the world economy. The situation is indeed worrying.

In light of their interdependence and with a view to maintaining global financial stability, members of the international community should strengthen dialogue and cooperation to effectively respond to the financial crisis and accelerate the reform of the international financial system so as to create an institutional framework conducive to the healthy development of the world economy. The reform of the international financial system should focus on constructing an inclusive and orderly international financial system that fully reflects the changing world economic pattern so as to respond effectively to the new challenges the global financial sector is facing. Particular attention should be given to increasing the voice and representation of developing countries in international financial institutions and to reducing their risk in participating in economic integration.

In the first half of 2008, the International Monetary Fund (IMF) took the lead in adopting some positive measures to increase the voice and representation of the developing countries. China welcomes such a move. Quota reform is a long-term task. It is our hope that IMF will maintain its momentum for reform, and gradually improve the mechanism for ensuring the long-term effectiveness of its quota adjustment. At the same time, China hopes that IMF will play a greater role in maintaining the stability of the international financial market, scale up policy oversight on major reserve currency countries, strengthen monitoring of the international financial market, especially short-term capital flow and the risks involved in financial innovations, and provide early warning in this regard. The IMF should also push for the strengthening of the coordination of international financial regulation, properly cope with financial turbulences and guard against financial crisis.

In the recent years, the World Bank has appointed candidates from developing countries to some senior posts and increased input in climate change and food security issues. These are positive developments. China hopes that the Bank will build on this basis, further increase the voice of the developing countries and mobilize more development resources to help the developing countries adapt themselves to the economic globalization and realize the Millennium Development Goals (MDGs).

Item 47 (c): External Debt and Development

Debt problem has long plagued the economic and social development of the developing countries. An appropriate solution to this problem leading to a relief of the debt burden of the developing countries is an important prerequisite for the eradication of poverty and the realization of the MDGs by the developing countries, LDCs in particular.

The debt problem of developing countries has deep-rooted historical and political causes. The international community should provide real assistance to the developing countries so that they can extricate themselves once and for all from the vicious circle of debt and achieve economic development. The developed countries, as major creditors, should actively fulfill their relevant commitments by expanding assistance and debt relief so as to increase the net capital in-flow to developing countries. International and regional financial institutions concerned should adhere to the principle of non-politicization, increase financial support for and technical assistance to developing countries and help them with capacity building. Assistance and debt relief initiatives should respect the ownership of the recipient countries and should be implemented in conjunction with their development strategies. The current international financial market turmoil will affect the external financing environment of the developing countries, so the international community should pay close attention to this problem to avoid any severe impact it may bring to the development of the developing countries.

As a developing country, China views debt as a critical problem. Within the framework of South-South Cooperation, we made vigorous efforts to provide debt relief to some developing countries. In 2005 and 2006, President HU Jintao of China twice announced debt relief programs for some countries. Not long ago, Premier WEN Jiabao also announced at the UN High-level Event on MDGs that China would forgive the interest free loans some LDCs owed to China that mature but remain outstanding at the end of 2008. In addition, China has taken an active part in the debt relief initiatives of international and regional organizations such as the IMF, African Development Bank, West African Development Bank, and Caribbean Development Bank. China’s assistance to other developing countries is provided on the basis of full respect for the need and ownership of the recipient countries, and is primarily aimed at filling the funding gap of these countries and enhancing their own development capacity. China is ready to continue to strengthen exchanges and communication with other countries on debt relief for developing countries in an effort to promote their economic and social development.

Item 47 (d): Commodities

Commodity trade is of critical importance for the sustainable development of the developing countries. Many developing countries, especially the poor countries, are heavily dependent on the export of commodities. The continuous rise of commodity prices since 2002 has played an important role in promoting the economic development, financing for development and employment expansion of these countries. The international community should further assist the developing countries that are dependent on the export of commodities to diversify production and increase the added value of products, and on this basis, promote their overall sustainable economic and social development.

We should not lose sight, however, of the fact that the international commodity price fluctuations remain violent and that the economic growth of many developing countries still depend heavily on the export of one or a few commodities. The surge of oil and food price since 2007 has posed formidable challenges to the overall economic growth of the developing countries. In this connection, we should fully recognize that the food and oil price surge is the result of a multitude of factors working together, and should not be attributed solely to the rise of demand of developing countries. Such lopsided allegation does not reflect the actual fact, nor does it represent a constructive approach in dealing with the problem. The international community should actively respond to the challenges, strengthen dialogue and coordination, strive to reduce the trade-distorting agricultural subsidies, energetically push for the early resumption of the Doha round negotiations so as to reach a package agreement centered on the theme of development at an early date, and on this basis, promote for the establishment of a fair and reasonable order of international commodity trade and avoid violent commodity price fluctuations. China commends UNCTAD XII for outcome and consensus it has achieved on the question of commodities and supports such international institutions as UNCTAD to further strengthen policy analysis and research in the field of commodities.

Thank you, Mr. Chairman.


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