Mr. President,

The Chinese delegation associates itself with the statement made by Pakistan on behalf of the Group of 77 and China. We wish to thank the Secretary-General for his report on financing for development.

Financing for development is an issue that concerns the international community as a whole. As it is agreed in the Monterrey Consensus, developing and developed countries should establish a new partnership, take comprehensive measures both domestically and internationally, enhance policy continuity and consistence, and mobilize capital from all channels to promote common development. The Chinese delegation hopes that this high-level dialogue could give new impetus to the financing for development process.

In the past two years, stakeholders have gained a deeper understanding of the policies and means concerning financing for development. Debt relief arrangements have helped relieve developing countries of some of their debts. Thanks to the vigorous efforts made by developing countries to reform their economic and financial systems, increase investment in human resources development and infrastructure, and promote the stability of the economy, developing countries have seen more inflow of private capital, and some of them have improved their trade competitiveness and increased export. Nevertheless, there still exists a huge financial gap if poverty is to be eradicated and the internationally agreed development goals, including MDGs, are to be achieved. Private investment has bypassed many poor countries that are in greatest need of capital. The year 2006 saw a reduction of ODA from the level of 2005. New manifestations of trade protectionism have emerged, and that has plunged the export of many developing countries, especially the LDCs, into grave difficulties.

There is no short-cut to the settlement of these problems. Integrated measures and various means must be employed to finance through all channels, including mobilizing domestic fund, attracting international private investment, providing ODA and debt relief, as well as improving the international monetary, financial and trade regimes.

As poverty and underdevelopment are mainly suffered by developing countries, the most difficult part of financing for development is to mobilize fund for developing countries. The biggest obstacle to financing for development is the innate deficiency suffered by developing countries due to their long-term backwardness. In the light of this, the international community should make constructive intervention, rather than rely solely on the market force. On the one hand, it needs to provide financial assistance to help developing countries resolve the pressing issue of development; and on the other, it should create a favorable external environment for developing countries to build their capacity for mobilizing fund through their own efforts. The Chinese delegation holds the view that the following aspects should be attached enough importance:

First, encourage and support capacity building by developing countries. Both mobilizing domestic capital and attracting foreign investment require basic qualifications in terms of infrastructure, legal system and management capability. International institutions and donor countries should take into account the needs of recipient countries when they provide technical as