Mr. Chairman,
Ladies and Gentlemen,

Good afternoon!  I feel much honored to attend the Business Leaders Forum.  I would like to take this opportunity to share with you my observations on how to further South-South cooperation under the new circumstances.

South-South cooperation is of no ordinary significance to the developing countries.  In the 1960’s, the developing countries that just freed themselves from the colonial rule badly needed economic development and social progress.  For the purpose of development and rejuvenation, they joined hands with one another for self-improvement and started a wave of South-South cooperation.  That not only helped enhance solidarity of the developing countries and their mutual cooperation but also enabled them to play a more effective role on the international arena, thus adding a glorious page to the annals of history.

In recent years, the rapid development of economic globalization and amazing advancement of science and technology have forcefully pushed the productive forces forward and brought about unprecedented opportunities for the social progress of mankind.  However, due to the unfair and irrational international political and economic order, benefits arising from economic globalization have not been shared on an equitable basis, and the gap between the North and the South is widening.  The developing countries are faced with severe challenges in economic development.  On the one hand, their development process has been hindered by old problems such as lack of capital, technological backwardness and heavy debts.  On the other, new problems like economic and financial turmoil are posing a grave threat to their economic security.  Therefore, to enhance South-South cooperation is a shared aspiration of the developing countries as well as an urgent practical need.

It is noteworthy that the South is no longer what it was thanks to years of economic reform and readjustment.  Developing countries, actively involved in the process of globalization, are now a force to be reckoned with in the world economy.  Many of them have made marked progress in pursuing the roads suited to their own national conditions.  Trade and economic cooperation between them have kept growing and regional cooperation is on the rise.  At the same time, South-South cooperation has expanded from a purely inter-governmental economic and technological cooperation to an all-directional economic cooperation.  Priority has been gradually extended from technology transfer and personnel training to drawing on each other’s success story, building capacity and conducting mutually complimentary economic and trade cooperation, etc.  All this has undoubtedly opened up even broader prospects for the development of South-South cooperation.  We must seize the opportunity to strengthen South-South cooperation and blaze new trails in order to achieve development for all.

First, to strengthen solidarity of the South and encourage South-North dialogue.  An equitable outside environment is indispensable for sustained development.  Developing countries must close their ranks in a concerted effort to address the external problems and protect their legitimate rights and interests in order to change the unfavorable environment and safeguard their economic security and right to development.  Therefore, they should get fully involved in working out rules for international economic, financial and trade regimes so as to make them fully reflect their interests.  In the new round of multilateral trade talks of the WTO, developing countries should cooperate with each other more closely so that the new round can truly become “a development round”.  Moreover, the developed countries should be urged to honor their commitments and take concrete actions to help the developing countries solve financial and technological problems and attain development.

Second, to increase government input and create an institutional environment.  Governments of developing countries have all along been principal champions of South-South cooperation, which, in the new situation, still calls for strong government support.  Governments of various countries should increase their investment in scientific-technological innovations and human resources development, set preferential policies and encourage economic and technological cooperation between the developing countries.  More importantly, they should be more aggressive in improving laws and regulations and the environment for investment and trade, give full play to the role of the market so that the countries concerned are better equipped to achieve development on their own initiative and make South-South cooperation more dynamic.

Third, to build partnership and encourage corporate participation.  As the economic reform goes deeper and globalization further unfolds, more and more diversified economic players have come on the scene, and the corporate sector has played an important part in business operation.  Enterprises in the developing countries are doing well, demonstrating a huge potential, while South-South cooperation has provided them with tremendous opportunities for development as well as starting operation.  The formation and development of partnership should help bring about a situation in which government support and corporate participation will complement and coordinate with each other so that enterprises will contribute more to South-South cooperation.            

Fourth, to expand channels of cooperation by integrating multilateral with bilateral cooperation.  Vast in number, the South countries vary in level of development and growth rate.  They can explore multi-tier, multi-channel and diverse patterns of mutually beneficial cooperation in line with their distinctive conditions.  They can further strengthen bilateral cooperation and also explore methods like establishing free trade areas.  Moreover, experiment can be made on trilateral cooperation.  The underdeveloped regions have an edge in labor and natural resources.  Developed countries have capital and technological strength.  And those developing countries that are growing fairly fast have development experience and adaptive expertise.  If the three combine, it will expedite progress in underdeveloped regions and promote common development.        

Mr. Chairman,

As a big developing country of nearly 1.3 billion people, China has a past similar to that of other developing countries and faces the same challenge of development.  Cementing and enhancing solidarity and cooperation with developing countries constitutes the cornerstone of China’s foreign policy.  Over the decades, China has provided assistance of what it could to many countries.  It is this mutual support in hard times that has fostered our deep friendship.  Keeping abreast with the times, China has continued to bring forth new ways and contents in its participation in South-South cooperation and thus a multifarious pattern has taken shape:

First, continuing with provision of preferential loans, debt exemption and reduction, technological cooperation and personnel training.  China has over the years provided material, technological and financial assistance to over 130 countries and sent a large number of professionals and technicians to engage in scientific-technological and economic cooperation.  In 2002, China signed debt reduction agreements with 31 African countries and also cancelled and reduced some Asian countries’ debts, thus helping them ease their burden and make readjustment with good results.  In the future, we will continue to implement these measures where necessary while working together with relevant countries to make the best use of such traditional assistance.

Second, conducting economic cooperation and trade by means of the market mechanism.  China’s opening up is all-directional.  It has offered many opportunities of trade and investment.  We hope that the developing countries will benefit most in this regard.  Following China’s WTO accession, the trade volume between China and other developing countries has grown further.  In 2002, the trade volume between China and Latin America reached a record high of US$17.8 billion.  The first three quarters of the same year also saw an increase of 27 per cent over the previous year in ASEAN’s export to China.  It is estimated that in 10 years’ time, when China-ASEAN Free Trade Area is built, the two-way trade will have increased by about 50 per cent.  Besides, China has conducted bilateral and multilateral cooperation of varied forms with different countries in light of the distinctive features and advantages of its different regions.  Such cooperation covers scientific-technological research and development, infrastructure development, industrial and agricultural production.  The furtherance of reform and opening up and implementation of the strategy of developing China’s west will create still more business opportunities for developing countries.

Third, encouraging its enterprises to invest and open business overseas.  Given its economic development and growing business community, China is also exploring ways to invest in other countries.  At present, many Chinese enterprises have already started to invest and set up factories in Asia, Africa and Latin America, playing a part as it does in the local economic development.  In 2001, China’s investment overseas reached US$ 2 billion, doubling that of the previous year.  A large portion of the investment has gone to the developing countries.  According to the United Nations Conference on Trade and Development (UNCTAD), this figure will double in 5 years’ time.  More and more small and medium-sized enterprises in China will go to the three continents to start business there.  Chinese enterprises will quicken their tempo in going global, and of course, to the developing countries as well.

Mr. Chairman,
Ladies and Gentlemen,

China belongs to the South.  No matter how the international climate changes, our solidarity with the developing countries and our mutual support will remain unchanged.  China will deepen its reform and open its market wider.  We will strengthen coordination and mutual support with developing countries and strive for a new international political and economic order that is fair and rational so as to safeguard common interests.  We will continue, to the best of our ability, to support fraternal countries in their development and bring forth new ideas and explore new ways of South-South cooperation for mutual benefit and mutual assistance and for common development.  I believe that with our concerted efforts, South-South cooperation will be further substantiated and developed, thus contributing more to the rapid development and rejuvenation of the developing countries.

Thank you.