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Keynote Speech by Mr. Yi Xiaozhun, Vice Minister of Commerce, P. R. China at 2010 High-Level Segment Development Cooperation Forum

Mr. Chairman

Distinguished delegates,

It is my great honor to join this distinguished gathering at the second Development Cooperation Forum. The Forum takes place at a time when the profound impact of the global financial crisis is posing new challenges to the vast number of developing countries in their efforts to achieve the Millennium Development Goals. In two months, the world leaders will gather here for the High-level Conference on MDGs to review the progress in achieving the MDGs. Against this background, the DCF sponsored by UNDESA is of great significance in helping UN member states to take stronger and more specific steps to facilitate the realization of the MDGs through intensified development cooperation.

This year marks the 60th anniversary of China's technical assistance to other developing countries through South-South Cooperation. It also marks the 31st anniversary of China as a beneficiary of the UN development assistance system. It's therefore relevant for me to share with you a few observations on international development cooperation in the context of China's own development experience.

. China is a beneficiary of the international development cooperation.

As a large developing country with 1.3 billion people and a per-capita GDP ranking the 106th in the world, China itself is facing serious development challenges. According to the UN poverty line of a dollar per day, there are 150 million people living in poverty in China. In the years ahead, China will have to address challenges on energy, environment and climate change where further international development cooperation is indispensable. China's own development experience shows that international cooperation, effective utilization of resources and international best practices will help the developing countries to accelerate the development process.

For the past 30 years, the international community including the United Nations have provided assistance to China and helped the country to integrate itself into the world. Such support has proven to be invaluable for China's economic and social development. Here are some examples. In the 1980s, with UNICEF's support, China developed the "cold chain" system for the Expanded Program of Immunization and met the target of 85% child immunization coverage ahead of schedule; since the 1990s, China has cooperated with UNDP on Micro-Credit schemes in 17 provinces, cities and autonomous regions covering one million poor people; in 1998, the joint program with ITC on nurturing an export-oriented cut-flower sector in Yunnan province has enhanced the local capacity for production and export, increasing the income of rural people and ethnic groups. Clearly, China's efforts in reform and opening-up have been greatly facilitated by international development cooperation, without which its pursuit towards poverty alleviation would not be possible.

. China is both a strong supporter for and an active participant in the South-South Cooperation.

Promoting South-South Cooperation and "helping each other among the developing countries" is the centerpiece of development cooperation. As the developing countries are at similar levels of development and facing similar economic and social development problems, they can better appreciate the development needs of each other.

For a large and populous developing country like China, one can never over-emphasize the importance of economic development. China supports the "Beyond Aid" initiative proposed in the UN Secretary General's Report and emphasizes the need for enhanced policy coherence, host country ownership and capacity building over cash assistance. With the concept of "blood generation over blood transfusion" , China believes that it is better to help host countries build long-term sustainability than to resort to short-term interventions and be overly dependent on foreign aid. An integrated and holistic approach should therefore be adopted by incorporating trade, investment, technology transfer, capacity building and other elements into the development policies. Developing countries should also take the initiative into their own hands in order to identify the policies and solutions most responsive to their own needs. As UNCTAD has advocated that in order to ensure the on time realization of MDGs, a package solution rather than stop-gap measure is needed. For years, China has tried similar approaches and learned some useful lessons, including the following:

First, providing non-politically conditioned assistance to developing countries. For the past 60 years, China has implemented a large number of programmes within its capacity with a view to enhancing the productivity of other developing countries and improving the livelihood of the local people. One such programme is the Tanzania-Zambia Railway when the Chinese people tightened our belts to build for Africa in the 1960s and 1970s. To date, it is still serving the local people. In this regard, China has won the respect and trust of the partner countries. Even after the global financial crisis, while addressing its own economic difficulties, China has managed to maintain some growth of its assistance programmes. The Government has also announced eight new initiatives for the next three years to help development of Africa, including preferential loans of USD10 billion, 100 clean-energy programs to develop solar energy, biogas, and small hydropower, loans of USD 1 billion specifically earmarked for small-and medium-sized enterprises to reinforce their financing capabilities, enhancement of cultural and scientific exchanges and further cooperation in the medical and health care sectors.

Second, opening up market to enhance the productivity of the Least Developed Countries (LDCs). China has made special efforts in increasing import from the LDCs, which proved to be very important in improving the capacity of these countries in terms of trade and national development. China has committed to progressively granting duty free treatment to 95% of products originated from the LDCs that have diplomatic relations with China. From 2007 to 2009, LDCs' exports to China rose from USD23.8 billion to USD27.4 billion with an average annual growth of 15.5%. Since 2008, China has been the largest export market for the LDCs, absorbing over 23% of their total exports. China has also set up an exhibition centre in Yiwu, Zhejiang Province to help promote African products in China.

Third, increasing investment in developing countries to enhance their ability for economic growth. The Chinese government has provided various policy incentives to encourage Chinese companies to invest in developing countries. In 2008, of the top 20 destinations for China's outbound investment, 12 are developing countries. By the end of 2008, 1,600 Chinese companies had invested USD7.8 billion in the African Continent. Despite the financial crisis, China's non-financial FDI to Africa reached USD1.36 billion in 2009, up by 37% year on year. By the end of 2009, the China-Africa Development Fund had approved 31 investment projects of USD770 million with a view to attracting an additional investment of USD 4 billion of various sources from China to Africa. China has started to establish 6 economic and trade cooperation zones in African countries, such as Zambia and Ethiopia to bring in Chinese businesses and boost local industrial development. For instance, in the China-Zambia Economic and Trade Cooperation Zone, 13 Chinese companies from chemical manufacturing, mining and construction sectors have been set up and running. The actual disbursement of investment from these companies has reached USD580 million, generating a tax revenue of over USD 50 million in cumulative terms and creating over 6,000 local jobs.

Fourth, building capacity through training. A well-known Chinese proverb says that "to teach one to fish is better than to give him a fish". And so, China attaches great importance to capacity building and human resources development. It has provided training on more than 20 sectors, such as economics and trade, diplomacy, public administration, health care, education, broadcasting, science and technology, culture, environmental protection, telecommunication, transport and finance. It has held approximately 4,000 training courses for over 120,000 people cumulatively. China has also organized training activities designed for African countries on rice and vegetable growing, fish farming, meat processing and agricultural machinery maintenance which have helped transfer appropriate technologies and skills to these countries.

. To achieve MDGs through enhanced international cooperation

The global financial crisis has rendered development constraints more prominent and the attainment of the MDGs more challenging. The gap between the rich and the poor is widening with an estimated additional 64 million people in extreme poverty this year. To take Africa for example, the crisis has also slowed down the economic growth of the African countries from 6% in average in 2006-2008 to 2.5% in 2009. As China feels the same way as other developing countries do in times of crisis, it would like to urgently call upon the international community to take effective measures to support developing countries. Following are our recommendations:

First, priorities should be given to those developing countries which are hardest hit and with the least capacity to recover on their own. The international community should remain firmly committed and honour their resolve in achieving the MDGs by maintaining their funding commitments and the scale of their support, and creating favorable external conditions for developing countries to pursue economic, trade and financial development.

Second, developed countries should undertake primary responsibilities in development financing. The acceleration of development and enhancement of cooperation depend on the increased level of financing for development. Developed countries should establish a clear timetable to meet their ODA commitments, including their commitment to the Monterrey Consensus.

Third, market access for LDCs should be further improved. We should consider to address the economic difficulties of the LDCs through "Early Harvest" in Doha Round negotiations. The developed countries should not shy away from granting duty-free and quota-free treatment to LDCs and substantially reducing the huge subsidies oncotton and other agricultural production. After all, it is not fair for LDCs to bear the consequences of the long stalled Doha Round talks.

Fourth, we should emphasize capacity building and technology transfer. This is an important macro-level strategy to support developing countries in a coordinated manner. An increased investment, as well as and enhanced capacity building and technology transfer would help the recipient countries to acquire management and professional skills and effectively enhance their capacity for national development.

Mr. Chairman,

Distinguished delegates,

The global financial crisis rarely seen in a century not only affected the developed economies, but dealt developing countries an even heavier blow with LDCs falling the biggest victim. Therefore, the international community should not only pay attention to the economic recovery and sovereign debt crisis of developed countries, but more importantly to take immediate measures to help LDCs recover from their economic difficulties. China believes that only in this way can a timely achievement of the MDGs be within reach.

Finally, I would like to wish the Forum a complete success!

Thank you!

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