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Statement by the Chinese Delegation at the Fiftieth Session of the Trade and Development Board of UNCTAD under Item 2 -- the Interdependence between Trade and Development and the Global Economy: Capital Accumulation, Growth and Structural Change(7 October 2003, Geneva)
Mr. President,

First of all, the Chinese delegation would like to express its appreciation to the secretariat of UNCTAD for its preparation of a high-quality and thought-provoking TDR 2003 for the consideration of this item. The report provides us with a firm basis for understanding the current situation in the global economy and trade. The Chinese delegation attaches great importance to this item, which we are discussing in the Board. Against the backdrop of the current slowdown in economic development and the setbacks of multilateral trade negotiations, we believe it is extremely important to discuss and exchange ideas on the issues of trade and development in the context of economic globalization.
Mr. President,

At present, there are some positive signs of a world economic recovery, but the global economy is still confronted with many uncertainties. The impact of the recent Iraq War and the pandemic of SARS on global economic growth make the overall picture of the world economy look much more somber than expected. Global trade has been experiencing sluggish development amidst growing protectionism in international trade and increasing trade frictions between big powers, while the new round of WTO trade negotiations is deadlocked and has been further delayed by the recent failure at Cancun. In the meantime, the gap between the rich and the poor across the globe is growing; the developing countries and the LDCs in particular suffer both from a shortage of financial resources for development and from a deteriorating trade environment. There is also a widespread poverty and hunger in many of them. The world is troubled by regional conflicts, environmental degradation and cross-boundary crimes. All this tells us that if the people of all the countries are to benefit from the advances in productivity and especially in science and technology, and are to achieve the goal of common development, it is essential to improve and adjust the world economic structure, economic systems and operational mechanisms while pursuing the development of new sciences and technologies and new industries, thereby allowing countries at different stages of development to enjoy the benefits of world economic development in a balanced manner. This task requires a joint effort by the international community.

Mr. President,

Experience of world economic growth shows that capital accumulation, economic growth and structural change are closely linked. Economic growth cannot be sustained without an adequate level of capital accumulation. Without comparable and multi-faceted structural change the continuous accumulation of capital and the benefits of growth cannot be ensured. We should also recognize that the solution to the economic hardships and challenges faced by the developing countries does not depend simply on the capital accumulation, structural change and policy adjustment by the developing countries alone, it also depends on a joint effort by the international community to provide them with a favorable international environment. We are of the view that while setting the rules for the international economy and especially during the new round of multilateral trade negotiations, the interests of the developing world should be taken fully into account and given their unfavorable position, priority should be given to issues of particular concern to them. The developing countries should receive help to boost their ability to participate in negotiations, benefit from world trade and globalization, and realize the goals of economic growth, capital accumulation and structural change.

We have noticed with regret the slow progress in the new round of multilateral negotiations. The failure of Cancun only highlights the imbalances that exit in the current multilateral trading system. These include the uneven sharing of benefits between the developing countries and the developed countries in the multilateral trading system, as well as the discrepancy between the existing system and its rules. For example, the continuous existence of tariff peaks, the increasing use of non-tariff barriers and anti-dumping measures and the unabated high level of subsidies to agricultural products have all created an unfair trade environment and a serious imbalance between the developing and the developed countries. We cannot but admit that the existence of this imbalance in multilateral trading system has to a certain degree widened the gap between the rich in the North and the poor in the South and damaged the environment for the development of the developing countries. It is inevitable that the developing countries' efforts to accumulate capital and achieve economic growth and structural change will be seriously impaired if the above imbalances cannot be resolved properly and in a timely fashion.

Mr. President,

Viewed from the perspective of inter-dependence, if a sustainable development of the developing countries and especially that of the LDCs are to be achieved, thereby providing impetus to an overall recovery of the world economy, the international community should enhance its effort in coordinating development policies, facilitating development financing, and providing developing countries with financial, technical and other kinds of assistance in order to provide them with a better international economic environment. It is of particular importance to enhance the capacity building of the developing country members and raise their ability to achieve capital accumulation and structural change. At the same time, it is necessary to create a set of international mechanisms to help them to be protected from the impact on their economy of volatile upheavals of international markets, including global economic downturn and financial crisis.

On the other hand, developing countries should, according to their respective national circumstances, engage actively in economic reform, developing modern mechanisms of market economy, and formulating proactive monetary, financial and industrial policies. They should introduce sound policies on trade and foreign investment, open gradually to the outside world, improve their position by making fuller use of the international trading system, effectively taking part in the international division of labor to free themselves from dependence on primary commodities, thereby expanding their production and export of industrial products and high value-added goods, expanding their domestic markets more rapidly and upgrading their industry and technology by introducing more effective policies on industry and foreign investment.

Mr. President,

The 11th Session of UNCTAD will enter into its substantial phase of preparation. In addressing issues on trade and development in the context of globalization, UNCTAD should continue to play its positive role in promoting consensus between the North and the South on issues concerning the development of world economy, to facilitate wider international co-operation and to contribute to the common development of developing countries and other members of the international community.

Finally, let's join our efforts to create a fair, healthy and stable international economic environment for the sustainable development of developing countries and the revitalization of world economy.

Thank you, Mr. President.

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