Promote Growth Through Win-Win Cooperation
Remarks by H.E. Hu Jintao
Cannes, 3 November 2011
President Nicolas Sarkozy,
I am glad to come to Cannes to attend the sixth G20 Summit and explore with you ways to counter risks and challenges and promote global development. First of all, I wish to express sincere thanks to you, President Sarkozy, and the French government for the active efforts and thoughtful arrangements you have made for the summit.
The current world economic situation deserves our high attention. Some major economies are experiencing economic slowdown, and some countries are facing acute sovereign debt problems. Volatility in the international financial markets persists. High inflationary pressure confronts emerging markets. Protectionism in various forms is mounting. The continuing turbulence in west Asia and north Africa as well as extreme weather conditions and frequent natural disasters have also exerted negative impact on the world economy. As a result, the global economic recovery is fraught with instability and uncertainty and encounters growing risks and challenges.
What has happened since the outbreak of the international financial crisis in 2008 shows that we are facing not just an economic and financial crisis. It is a crisis that has exposed certain deficiencies in the existing institutions and mechanisms, policies and approaches, and ways of development. The world economy is now at a crossroads and global economic governance faces arduous tasks. It is imperative that we stand on a higher plane, transcend differences on specific issues, move beyond short-term considerations, and jointly seek ways to overcome the crisis and sustain development. As the premier forum for international economic cooperation, the G20 must continue to demonstrate the spirit of standing together in times of adversity and pursuing win-win cooperation. At this critical moment, the G20 must work to address the key problems, boost market confidence, defuse risks and meet challenges, and promote global economic growth and financial stability. I wish to make the following proposals in this connection.
First, ensure growth while paying attention to balance. Strong growth is the primary goal in pursuing strong, sustainable and balanced growth. Given the serious risks facing the global economy and continued market volatility, ensuring growth and promoting stability should be the top priority for the G20 Summit. We should introduce new and strong measures to ensure that the fiscal and monetary policies are fully implemented and that funding is channeled into the real economy to boost production and employment. We should make major efforts to support the development of small- and medium-sized enterprises and help them speedily overcome the current difficulties by providing financing and fiscal support and tax incentives, thus laying a solid foundation for promoting economic recovery. We should fully tap into the potential of science and technology, nurture growth drivers and build up the internal dynamism of economic recovery. At the same time, we should speed up the adjustment of our respective economic structures and endeavor to achieve fairly balanced growth of the global economy.
Second, pursue win-win outcome through cooperation. As countries vary in economic situation and have growing differences in terms of interest, there are now rising rifts and frictions among them. There is also acute lack of confidence in the markets. This grave situation shows the urgency of enhancing international coordination and cooperation. We should strengthen unity and send a strong signal of pursuing win-win cooperation to the world so as to boost the confidence of the international community in global economic recovery and development. We should strengthen consultation and coordination, introduce mutually supporting and complementing policy measures, and tackle sovereign debt risks, massive unregulated cross-border flow of capital and other financial risks. We should keep the fluctuation of commodity prices under control, mitigate global inflationary pressure and make sure that the economic policies pursued by various countries do not offset each other.
Third, improve governance in the course of reform. The international financial crisis has highlighted the deficiencies in the global economic governance system, but it has also enabled us to set out on a historic process of building a new system of global economic governance. We have taken note of the progress made in reforming international financial institutions and in the financial regulatory reform and the increase in the voice and representation of emerging markets and developing countries. Still, major efforts should be made to reform and improve the international monetary system, international trading system and commodity pricing mechanism. We should advance the reform of the international monetary system in a steady manner, expand the use of the SDR of the IMF, reform the SDR currency basket, and build an international reserve currency system with stable value, rule-based issuance and manageable supply. We should be firmly committed to free trade, oppose trade and investment protectionism, move forward the Doha Round negotiations, reaffirm the commitment of not taking new trade protectionist measures, and work to build a fair, equitable and non-discriminatory international trading system. We should work to make the commodity pricing and regulating mechanism more equitable and transparent, expand production capacity, stabilize supply and demand, strengthen supervision and curb speculation so as to maintain the stability of commodity prices at a reasonable level. We should ensure global energy security and food security, and in particular, meet the energy and food needs of developing countries. We should remain firm in our resolve to advance reform and make continued progress towards the building of a more just and equitable system of global economic governance.
Fourth, strive for progress through innovation. The current crisis has once again raised a serious and fundamental issue, namely, how mankind should conduct activities affecting production and livelihood. This is a test on our vision and ability, and it cries out for urgent action. Innovation is an inexhaustible source of human progress. To overcome the crisis, we need to make pioneering efforts. We should improve and innovate our thinking, system and mode for advancing economic and social development, and strike a balance in such important relationships as those between government and market, labor and capital, production and consumption, and equity and efficiency. We should bring into full play the basic role of the market in resources allocation while avoiding blind pursuit of profit and malicious competition. The government should play a key role in macro-regulation and upholding social equity and justice while avoiding being divorced from reality and keeping all responsibilities to itself. We should vigorously pursue scientific innovation and upgrade industrial technologies. At the same time, we should continue to make creating jobs and improving people's life our top priority, so that progress in science and technology and expansion in employment will complement each other. We should boost production and strengthen the material foundation for social development. At the same time, we should ensure more equitable distribution of income, so that growth in social productivity and improvement in people's living standards will reinforce each other.
Fifth, promote common prosperity through development. In the final analysis, the most serious bottleneck in world economic development is the inability of developing countries to achieve full development. As a result, growth in effective global demand has not kept pace with the growth in productivity. For years, there has been an imbalance between developed and developing countries in terms of access to resources, wealth distribution and development opportunities. This has created a vicious circle where underdevelopment leads to backwardness and backwardness hinders development, thus hampering sustained and steady growth of the global economy. To speed up economic and social development in developing countries is a UN Millennium Development Goal, and it is the only way leading to global prosperity. The international community should come up with new thinking and adopt new policies in this regard. The G20 Seoul Development Consensus for Shared Growth and the Multi-Year Action Plan are important to our efforts to narrow the development gap and promote common growth. We should further unleash the development potential of emerging markets and developing countries and boost the economic growth of developing countries in order to stimulate aggregate global demand. We should continue to increase the voice of emerging markets and developing countries in global economic governance and create an enabling institutional environment for their development, as called for by the changing global economic landscape. We should build a more equal and balanced global partnership for development, strengthen the North-South dialogue and South-South cooperation, intensify coordination and cooperation with the United Nations on development, and support the UN and its specialized agencies in continuing to play an important role in development. As a developing country, China stands ready to promote mutual assistance with other developing countries and will work with them to advance durable peace and common prosperity of the world.
Food security, infrastructure, and tariff-free and quota-free treatment to the least developed countries have been the focus of the G20 consultations on development this year. They are also the key areas in which China has been helping other developing countries within the framework of South-South cooperation. Regarding food security, China had, by the end of 2010, provided 4.3 billion yuan in food aid through bilateral channels. To help African countries cope with the severe drought and food crisis, China has announced 533.2 million yuan in emergency food aid to the affected countries. In the field of infrastructure, China had, by the end of 2010, completed 632 infrastructure projects in other developing countries. Between 2010 and 2012, China will provide 10 billion US dollars in lending of a preferential nature to Africa, the bulk of which will go to infrastructural development. Between 2011 and 2015, China will build 200 infrastructural projects in clean energy and environmental protection in other developing countries.
China has taken various measures, including tariff reduction and exemption, to create conditions for other developing countries to increase exports to China. To further help the least developed countries in their development endeavor, China will, in the context of South-South cooperation, give zero-tariff treatment to 97% of the tariff items of exports to China from the least developed countries having diplomatic ties with China. We hope that this move will also help achieve the development goals of the Doha Round at an early date.
This year marks the tenth anniversary of China's accession to the WTO. In the past ten years, China's economy has made significant advance and its contribution to world economic growth has been growing. China's average tariff level has dropped from 15.3% to 9.8%, which is lower than the WTO requirement for developing countries. Its total imports in this period have reached 8.5 trillion US dollars, creating a huge market for other countries. Since the outbreak of the international financial crisis, China has actively responded to domestic and external challenges to maintain strong growth at home, and add momentum to economic recovery both in the region and globally. At the same time, China has substantially increased its financial contribution to international financial institutions, extended a helping hand to other developing countries, increased bond purchase from developed countries and played its part in assisting the economic and social development of relevant countries and stabilizing the international economic and financial situation. In the coming five years, China's imports are expected to exceed eight trillion US dollars, which will be a major contribution of China to the global economy.
The overall situation of China's economic and social development is good. In the face of the complex and volatile global economic environment, China has taken targeted measures this year to strengthen and improve macro control, with focus on stabilizing prices, adjusting the economic structure, ensuring people's well-being, and promoting harmony. The Chinese economy is driven more by its internal dynamism than policy stimulus. And it is moving in the direction consistent with the objectives of macro control. In the first three quarters, China's GDP grew by 9.4% year-on-year. The urban per capita disposable income and rural per capita cash income rose by 7.8% and 13.6% respectively in real terms. Retail sales were up 17%. China's imports grew faster than exports, and China's trade surplus decreased over the same period last year. There is a better balance between domestic and external demands in driving economic growth. On the other hand, China is confronted with quite a few challenges in its efforts to maintain steady and fast growth. Some institutional and structural problems that have built up over the years remain unresolved, and there are some negative factors affecting the sound performance of China's economy. For instance, the overall price level is rather high, some small- and medium-sized businesses face difficulties, job pressure is growing, and much more needs to be done in energy conservation and emissions reduction. We must pay great attention to these problems and make earnest efforts to resolve them.
To sustain the sound momentum of China's economic and social development, we will continue to pursue development in a scientific way and redouble efforts to shift the growth model. We will continue to strengthen and improve macro control, and maintain a balance between achieving steady and fast economic growth, adjusting the economic structure and managing inflation expectation. Putting people's interests first and taking a holistic approach to development, we will work harder to achieve all-round, balanced and sustainable development, deepen reform and opening-up, and improve people's well-being. I am convinced that, through hard work and with the understanding and support of the international community, we will have a bright prospect for the Chinese economy. And continued steady and fast economic growth in China will serve the interest of global economic growth.
At a time when we face both difficulties and daunting tasks, we must pool our efforts, meet challenges head-on, and work for durable peace and common prosperity of our world.