Remarks by Hu Jintao, President of the People's Republic of China, at the Fifth G20 Summit

(Seoul, Republic of Korea, November 12, 2010)

Thanks to the concerted efforts of the G20 and the entire international community, the world economy is slowly recovering. However, total demand remains insufficient in the absence of new sources of growth. Countries differ in policy objectives, making macroeconomic policy coordination even more difficult and global recovery even more fragile and uneven. Major advanced economies are plagued by sluggish recovery, high unemployment and greater fiscal and debt risks. Emerging economies are confronted with the pressure of massive capital inflow, lagging domestic demand and rising inflation risks. International financial markets suffer from persistent volatility, the exchange rates of major currencies fluctuate drastically, commodity prices hover at high levels, and protectionism is noticeably on the rise.

All this shows the deep-seated impact of the international financial crisis is still reverberating. Global development issues are more pronounced. We must adopt an attitude responsible to history and the future, bear in mind the common interests of mankind, build on what we have already achieved and continue to work in concert for strong, sustainable and balanced growth of the world economy.

To this end, I wish to make the following proposals:

First, Improving the Framework for Strong, Sustainable and Balanced Growth and Promoting Cooperative Development.

Strong, sustainable and balanced economic growth is of great significance to the whole world. As the world economy is at a critical juncture of stabilizing and recovering, achieving strong growth is our primary task. A year ago, we decided at the Pittsburgh Summit to launch the Framework for Strong, Sustainable and Balanced Growth. This Framework is an important platform for major advanced and emerging market economies to strengthen macroeconomic policy coordination. The G20 is now transforming from an effective mechanism in tackling the financial crisis to the premier forum for international economic cooperation. We should stick to the member country-led principle, take into full account the different national circumstances and development stages of various members, and appreciate and respect each country's independent choice of development paths and policies. Assessment criteria should be further improved. Since strong growth, sustainable growth and balanced growth are equally important, we must give them equal attention and push forward growth in a comprehensive way in the formulation and implementation of assessment criteria. We need to improve the Framework so it can shift its focus from emergency response to long-term governance and contribute to more effective medium- to long-term global policy coordination. We should strengthen macroeconomic policy coordination, advance international cooperation energetically in new industries, science and technology, employ every means to create jobs, and support developing countries in adopting measures to adjust economic structure, expand domestic demand and increase exports. We should encourage various economies to draw on each other's strengths for mutually beneficial growth. As long as we remain committed to the spirit of mutually beneficial partnership for development, the goal of strong, sustainable and balanced global economic growth will be achieved.

Second, Championing Open Trade and Promoting Coordinated Development.

To pursue international division of labor and free trade based on resources endowments of individual countries reflects the law of economics and conforms to the historical trend of globalization. Modem world history shows freer trade brings greater development to the world and a more open economy leads to more rapid development. In the current situation, we must be firmly committed to free trade, to the consensus reached at previous G20 summits, and to efforts in opposing all forms of protectionism and removing existing trade protectionist measures. We should substantially reduce trade and investment barriers, broaden common interests, properly handle friction and differences through dialogue on an equal footing, lift unreasonable restrictions on high-tech exports and jointly foster a free, open, equitable and just global trading environment. We should encourage coordination, refrain from confrontation and step up dialogue and cooperation so as to shape a favorable environment for global economic growth and win-win progress. We should coordinate trade and development strategies to reflect the G20 spirit of global economic governance for common development and shared prosperity. We should honor our commitments and work for comprehensive and balanced outcomes in the Doha Round negotiations in order to attain the goals of the development round at an early date and establish an open and free global trading system. To do this, we should uphold the mandate of the Doha Round, lock in previous achievements and work on the basis of the existing negotiating text.

Third, Reforming the Financial System and Promoting Stable Development.

Both the World Bank voting power reform and the IMF quota reform have made progress this year, and what has been decided should be implemented within the agreed timeframe. The reform of international financial institutions (IFIs) is a long and dynamic process. Quota and voting power reforms are just a starting point and much remains to be done. We should continue to push for fair and merit-based selection of the management of international financial institutions, enable more people from developing countries to take up mid-level and senior management positions and redress the underrepresentation of developing countries at the management level in the institutional framework of IFIs. We should support the IMF in its effort to strengthen the monitoring and early warning of capital flows and prevent the destructive impact of large capital movement, both inward and outward, on individual economies. While tightening international financial supervision and regulation, we need to seek the right balance between financial regulation and innovation, and between government intervention and market forces, and address the systemic and fundamental problems in the international financial system so the system will become one that relies on, serves and buttresses the development of the real economy. We should rigorously track and assess G20 members' compliance with the new regulatory standards. We should strengthen supervision and regulation over credit rating agencies, the shadow banking system and trans-border capital flows. We should improve the international monetary system and build an international reserve currency system with stable value, rule-based issuance and manageable supply. The major reserve currency issuing economies should adopt responsible policies, maintain relative stability of exchange rates and help enhance the resilience of emerging market economies and developing countries against financial risks, thus easing and gradually removing the fundamental problems behind foreign exchange liquidity risks.

Fourth, Narrowing the Development Gap and Promoting Balanced Development.

Among various imbalances in the world economy, the most prominent is the serious development imbalance between the North and the South. The underlying reason is that the international order is unfair, with institutional deficiencies and lack of equal access to opportunities. In the final analysis, without the full development of developing countries, there can be no genuine global development. And if the least developed countries remain in poverty, enduring global prosperity can only be empty talk. At the recent UN High-Level Plenary Meeting on the Millennium Development Goals (MDGs), all parties gave commitments to overcome difficulties and do everything possible to achieve the MDGs. This represents the solemn commitment of the United Nations and the common responsibility of G20 members. We must endeavor to build a new, more equal and balanced global partnership and encourage developed and developing countries to have greater mutual understanding and closer coordination rather than follow the old path of trading accusations and public confrontation. We should pay attention to the spillover effect of G20 macroeconomic policies on developing countries. We should make great efforts to promote North-South cooperation, expand common interests and embrace a new development concept promoting growth through development and overcoming risks through cooperation. We should move development up the international agenda and address the issue of development from a macro and strategic perspective. We should support the United Nations and its specialized agencies in continuing to play an important role in international development cooperation. We should strengthen the development function of the World Bank and other international institutions so as to provide strong institutional guarantees for in international development. We should advocate new ways of development and reduce artificial barriers to technology transfer in order to create conditions for developing countries to achieve green and sustainable development at an early date. We should work together to ensure the Cancun climate change conference will continue to follow the principle of common but differentiated responsibilities and the dual-track negotiation mechanism and mandate of the Bali Roadmap. The Cancun conference should give equal importance to mitigation, adaptation, funding and technological support, adhere to the principle of openness, transparency, broad participation and consensus-building in conducting negotiations and pay more attention to the voice of developing countries. It should seek positive outcomes by building on the achievements of the Copenhagen conference and following the guidance of the political consensus embodied in the Copenhagen Accord.

China's development is an important part of world development. Since its reform and opening up, China has lifted over 200 million people out of absolute poverty and provided for the basic needs of 1.3 billion Chinese. We are now working towards the goal of building a moderately prosperous society in all respects. We have made our achievements through strenuous efforts and by overcoming numerous difficulties. Meanwhile, China has offered sincere and selfless assistance to fellow developing countries as its ability permits and actively promoted South-South cooperation, contributing its share to world development.

With the advent of the second decade of the 21st century, China's development has entered a new stage. In the light of a changing domestic and external situation, we have set the strategic goal of accelerating the transformation of the economic development pattern. We will speed up efforts to adjust income distribution, urban-rural development, regional development and industrial structures, promote scientific and technological innovation, and develop modern agriculture, conservation culture, cultural industries and the social safety net to bring about balanced economic and social development. The series of policies and measures China adopted to boost domestic demand has produced notable results. In 2009, China's total retail sales rose by 15.5 percent. Final consumption accounted for 4.1 percentage points in the economic growth rate. In other words, it contributed 45.4 percent to last year's economic growth. In the first nine months of this year, total retail sales in China grew by 18.3 percent, reflecting the greater role of domestic demand in economic growth. In the same period, China's imports and exports were up by 42.4 percent and 34.0 percent respectively and trade surplus was down by 10.5 percent year-on-year, a demonstration of further improvement in foreign trade balance and the international balance of payments.

China has identified the overall direction and strategic tasks of development for the next five years. Staying committed to scientific development and focusing on transforming the economic development pattern at a faster pace, we will deepen reform and opening up, ensure and improve people's livelihoods and strive for sustained, stable and fast economic development, and social harmony and stability. Transforming the economic development pattern, expanding domestic demand and improving people's well-being will be our priority tasks in advancing economic and social development. We will introduce policy measures to enhance people's spending power, improve consumption expectations, cultivate areas of high consumer demand and foster a better environment for consumption. We will expedite the adjustment of income distribution patterns, increase people's income through multiple channels, upgrade the level of social security and steadily raise the minimum wage. We will expand consumer credit and develop better commercial distribution infrastructure in order to achieve sustained and fast growth in consumer spending. We will continue with our effort to shift the drivers of economic growth to consumption, investment and export. All in all, we will strive for comprehensive, balanced and sustainable development and make new contributions to world economic development.

Let us show greater courage and wisdom and work hand-in-hand for the all-round development of the world and a better future for mankind.