Remarks by H.E. Hu Jintao

President of the People's Republic of China

At the 16th APEC Economic Leaders' Meeting

Lima, Peru, 22 November 2008

President Alan Garcia,

Dear colleagues,

It is a great pleasure to meet you again and exchange views with you on international and regional issues of common interest. I wish to thank President Garcia and the Government of Peru for the thoughtful arrangements they have made for the meeting.

We live at a time when economic globalization is gaining momentum and regional and sub-regional cooperation in the Asia-Pacific is picking up speed. Our region is becoming a main driving force for world economic growth. At the same time, however, both the world and the Asia-Pacific region are facing various destabilizing factors and uncertainties. International financial markets are experiencing deep turmoil. The negative impact of the financial crisis on the real economy of the world is more apparent. Global economic growth is slowing down and problems of food and energy security are acute. The Doha Round negotiations have stalled and trade protectionism is resurfacing. Moreover, environmental pollution, severe natural disasters, major communicable diseases and other non-traditional security issues remain prominent. All these problems have posed severe challenges to the sound and steady growth of the world economy.

In this world of growing interdependence, it is hardly possible for anyone to stay away from the challenges. To address these problems, we must all work together. We believe that in the face of the new and complex situation, all parties should adhere to the principle of opening-up and cooperation to turn challenges into opportunities and seek win-win progress.

Dear colleagues,

The rapidly-spreading international financial crisis, with its extensive impact, constitutes the most severe challenge confronting world economic growth. It is a major and urgent task for all countries and regions to deal effectively with financial risks, maintain international financial stability and promote world economic development. The international community must strengthen confidence and step up coordination and cooperation. The G20 Summit on Financial Markets and the World Economy held last week produced positive results in this regard. Here, the Chinese side wishes to propose the following:

First, to curb the worsening financial crisis, all countries should take prompt and effective measures, enhance macroeconomic policy coordination, improve information sharing, help each other as much as possible, and employ all necessary fiscal and monetary means to stop the spread and development of the financial crisis, bring stability to global financial markets, stimulate economic growth, minimize the damage of the financial crisis on the real economy and avoid a global economic recession.

Second, the international community should earnestly draw lessons from the ongoing financial crisis and, based on full consultations among all stakeholders, undertake necessary reform of the international financial system in a comprehensive, balanced, incremental and result-oriented way with a view to establishing a new international financial order that is fair, just, inclusive and orderly and fostering an institutional environment conducive to sound global economic development. The reform of the international financial system should both reflect the general law and principles of financial regulation and take into account the specific development stage and unique features of different economies. It should seek a balance among the interests of all parties and reflect, in particular, the interests of emerging markets and developing countries. It is necessary to strengthen cooperation in international financial regulation and improve the international regulatory system, press ahead with reform of international financial institutions and enhance their capability of performing responsibilities, encourage regional financial cooperation and give full play to the role of regional liquidity assistance mechanisms, move the international monetary system steadily towards diversification and work together to bolster its stability. Financial institutions and intermediaries of various types should improve risk management, increase transparency, and make great efforts to enhance supervision and early-warning of short-term capital flows and financial innovation risks.

Third, from a long-term perspective, it is necessary to change those models of economic growth that are not sustainable and address the underlying problems in our respective economies. We should also pay adequate attention to the impact of the financial crisis on the developing world and provide necessary support to relevant countries to help them maintain growth momentum.

In response to the financial crisis, China has made active efforts within its ability and taken a range of important measures, including ensuring stability of the domestic financial system, increasing liquidity in the financial markets and institutions and intensifying macroeconomic policy coordination and cooperation with other countries. We have, in light of the changing domestic and international economic situation, adjusted our macroeconomic policy and taken steps to lower the required reserve ratio, cut the deposit and lending rates, and ease the corporate tax burdens. Recently, the Chinese Government has adopted even stronger measures to boost domestic demand. Between the fourth quarter this year and the end of 2010, China will invest an additional four trillion RMB yuan to accelerate projects related to people's livelihood, infrastructure, the eco-environment and post-disaster reconstruction. We will at the same time raise household income, especially that of low-income households, so that they can have greater consumption. These measures will give a strong impetus to China's economic development and contribute to world economic growth.

We are ready to work together with the rest of the international community to preserve stability of international financial markets. We will, together with other APEC members, increase experience sharing and strengthen capacity building in the financial field. We support the Asia-Pacific Finance and Development Center based in Shanghai in its continued effort to serve as a platform for capacity building and its effort to host more training and capacity building programs for all members.

Dear colleagues,

Opening-up and cooperation for win-win progress should serve as not only the guiding principle in tackling the ongoing financial crisis, but also the basic approach in addressing the prominent issues in international economic and social development. In view of the agenda of this meeting, I wish to share with you my thoughts on how to address these issues.

First, build consensus and promote sound development of the multilateral trading regime. A fair and open multilateral trading regime is conducive to the steady growth of regional and global trade, to the sound growth of the world economy and to the benefits of all parties. We should have strong confidence in the multilateral trading regime and give strong support to the Doha Round negotiations. We should be steadfast in rejecting trade protectionism and work for the early resumption of the Doha Round negotiations and for comprehensive and balanced results. As an important supplement to the multilateral trading regime, we also support efforts to continuously advance the process of regional economic integration, including conducting research on the establishment of an Asia-Pacific free trade area as a long-term goal, while taking into full consideration the realities of the region and accommodating the concerns of all parties.

Second, take up responsibilities and jointly tackle climate change. All parties should, in keeping with the requirements of the United Nations Framework Convention on Climate Change and its Kyoto Protocol and the principle of "common but differentiated responsibilities", actively conduct negotiations for the implementation of the "Bali Roadmap" and take effective policy measures in light of their respective conditions to mitigate climate change. Forest protection is an important part of the cooperation in tackling climate change. Last year, I put forward the initiative to establish the Asia-Pacific Network for Sustainable Forest Management and Rehabilitation (APF Net). Thanks to the concerted efforts of all parties, APF Net has been officially launched in Beijing. In the coming years, the Chinese Government will offer special fund to support the operation of APF Net and we look forward to the active support and participation of all members.

Third, conduct exchanges and cooperation and join efforts to combat natural disasters. The frequent occurrence of natural disasters in recent years has caused heavy losses of life and property in the Asia-Pacific region. In the course of fighting natural disasters, APEC members have gained rich experience. Such experience is the common asset of all mankind. We should increase exchanges and learn from each other's experience. To respond to massive natural disasters requires the efforts of more than one country. It calls for the support and assistance of the international community. In order to increase exchanges and cooperation in disaster response in the Asia-Pacific region, China has put forward the APEC Principles on Disaster Response and Cooperation this year. It is also our hope that APEC members will consider carrying out long-term cooperation projects in post-disaster recovery and reconstruction so as to deepen APEC cooperation in disaster prevention and relief.

Fourth, enhance regulation and guidance and strengthen corporate social responsibility. An important lesson we have learned from the ongoing financial crisis is that while trying to maximize economic returns, enterprises should follow a prudent, well-thought-out and responsible approach in market operations. They should bear in mind the need to maintain overall economic stability and take serious measures to manage various risks, both real and potential. They should refrain from taking any action that may have a negative impact on economic development and people's livelihood. This is the social responsibility that all enterprises should fulfill, especially multinational corporations. Enterprises should be keenly aware of their global responsibilities, incorporate social responsibilities into their business strategies, comply with local laws and international business practices, improve business models and strike a balance between economic benefits and benefits to the society. Governments must strengthen guidance and oversight, and introduce and improve laws to create conditions for enterprises to fulfill social responsibilities on their own.

Fifth, take coordinated actions and ensure world food and energy security. Food and energy are essential to the economy and people's livelihood of each individual country, and to global development and security. We should, following the principle of common development, actively and effectively coordinate our policies and resort to a variety of joint measures to safeguard world food and energy security. We should pay greater attention to grain production, increase input, boost grain supply through science and technology, improve the environment for food trade, and establish a fair and equitable order for trade in agricultural products. We should strengthen coordination at the macro level, curb excessive speculation in the markets and stabilize food prices. Countries able to offer assistance should do so to those stuck in food crisis, developing countries in particular. The Chinese Government has already undertaken to increase exports and assistance to developing countries facing food shortages.

We should establish and act on a new energy security concept that calls for mutually beneficial cooperation, diverse forms of development and common energy security through coordination. We should strengthen mutually beneficial cooperation and policy coordination on energy development and utilization, achieve globalization and diversification of energy supply, build advanced energy technology research, development and application systems, and encourage the use of clean and renewable energies to ensure world energy security. The Chinese Government attaches great importance to energy security and has been working hard to develop a stable, economical, clean and safe energy supply system. We are committed to building a resource-conserving and environment-friendly society and achieving sustainable development.

Dear colleagues,

Since its launch almost 20 years ago, APEC has done a great deal in promoting trade and investment liberalization and facilitation and economic and technical cooperation, thus making positive contribution to regional economic integration and the building of an Asia-Pacific family. The host of major reform measures adopted within the APEC framework in recent years have improved APEC's organizing and coordinating capabilities and significantly enhanced the dynamism and efficiency of APEC cooperation. China is ready to work with other APEC members to promote further development of APEC. In doing so, we should maintain the nature of APEC as a forum for economic cooperation and its approach of conducting cooperation on a non-binding basis, as this best suits the diversity prevailing in the Asia-Pacific. We should continue to promote balanced progress in economic and technical cooperation and trade and investment liberalization. In particular, we should increase input in economic and technical cooperation to enhance capacity-building in developing members and narrow the development gap. To this end, China would like to host the APEC Human Resources Development Ministerial Meeting in 2010 to create a platform for experience sharing and cooperation among all members.

Dear colleagues,

This year has been an eventful year for China. The Chinese people have withstood the test of natural disasters like the severe snowstorms and the massive earthquake that hit Wenchuan, Sichuan Province, and have successfully hosted the Beijing Olympic and Paralympic Games. We have received tremendous support and sincere assistance from APEC members and the entire international community during this period. I wish to take this opportunity to express, on behalf of the Chinese Government and people, our heartfelt thanks to you all.

This year marks the 30th anniversary of China's reform and opening-up program. Through reform and opening-up in the past three decades, China has accomplished the historic transformation from a highly centralized planned economy to a robust socialist market economy and from a closed and semi-closed society to one that fully embraces the world. China has enjoyed sustained and fast economic growth, significant improvement in people's livelihood and marked progress in various social undertakings. At the same time, we are keenly aware that China remains the largest developing country in the world, and the difficulties and problems we face in the course of development are rarely seen elsewhere in terms of both their scale and complexity. We still have a long way to go before we can build the country into a moderately prosperous society in all respects and at a higher level to the benefit of the over one billion Chinese people and achieve basic modernization and common prosperity for the entire population. We must continue with our arduous efforts. The Chinese people will unswervingly carry forward reform and opening-up and continue to work hard to promote all-round, coordinated and sustainable economic and social development and achieve the goal of building a moderately prosperous society in all respects.

As economic globalization continues to deepen, China's destiny is more than ever closely tied to that of the world. To achieve development, China needs an international environment of peace, stability, harmony and cooperation, and China will contribute its part to fostering such an environment. I wish to reiterate that China is firmly committed to the path of peaceful development, to an opening-up strategy of mutual benefit and win-win progress and to achieving peaceful development through openness and cooperation, and China will devote itself to the building of a harmonious world of enduring peace and common prosperity.

Thank you.