Mr. Chairman,

It is a significant event for ASEAN. and its dialogue Partners to meet here today to exchange views on regional and international cooperation.

The situation in this region and the world at large has undergone profound changes since the last PMC. An overview of the situation shows that peace and development remain the mainstream of the times and that dialogue and cooperation the common aspiration of all countries. The overall situation is good.

It is true that destabilizing factors are also on the increase, among which the finance crisis in East Asia is the most salient. The ferocity with which the crisis broke out, its extensive scale and severe consequences went beyond our expectation. Under the impact of the financial storm, the situation in Asia has become volatile, the momentum of development characterized by fast economic growth and relative political stability has suffered setbacks, and the efforts to maintain economic security face unprecedented challenges.

How will Asia extricate itself from the predicament? What are Asia’s prospects of development? These are the concerns not only of the Asian countries, but also of the world.

As is the rule of development of all things, the economic development of a country, region or even the whole world cannot be plain sailing. It is only natural and inevitable that Asia has experienced twists and turns and ups, and downs in its development process. Despite their severity, Asia’s difficulties are those on the way of progress. Whether Asia can deliver itself from the difficult position depends on various factors, both internal and external. A comprehensive analysis of various conditions gives us every reason to be fully confident in the future development of Asia.

First, there still exist fundamental conditions and favorable factors for Asia’s economic growth. Generally speaking, a solid foundation has been laid for the Asian economy thanks to its fast growth over the years. Despite the strong impact of the financial crisis, the foundation for Asia’s development is not seriously damaged and the economic fundamentals remain sound. The traditional advantages, such as good education, a high savings rate and rich human resources, continue to play a role.

Second, in challenges lie opportunities. With a view to addressing the problems and obstacles in the economic development, Asian counties are restructuring their economies, changing the anode of growth, improving the financial regulatory system and. promoting scientific and technological Progress. Although the Asian economy will stay at a low ebb for a period of time, it will not be very long before it regains its vitality, provided Asian countries adhere to effective practices, formulate development strategies suited to their national conditions and conduct necessary reforms in the course of its integration with the world economy.

Third, the market potentials of East Asia and the rest of Asia are far from being tapped, which is a most favorable factor in ensuring continued economic growth in Asia, The differences in the development stages of the Asian economies and the living standards will give an impetus to a progressive and level-by-level development of the Asian market, thus forming a rational market structure. There exists a sustainable energy for the development in Asia.

Fourth, the most crucial is the invaluable spiritual wealth Asia has for its development. That is the fine cultural tradition which the Asian people have created through practice over their long history, such as esteem for self- respect and self-improvement, hard work and plain living, diligence and , modesty and studiousness, and dedication to the community and the collective, Asian countries will be able to bring back vigor and vitality to their economic development, as long as they carry on and practice these cultural traditions and wisdom with oriental characteristics and draw upon advanced achievements of the world civilization in the light of their national conditions in the process of integrating themselves with the trend of the times.

In addition,, the recovery and development of the Asian economy also depend on a favorable external environment. It should be noted that the financial crisis in East Asia broke out against a background of economic globalization, the globalization of the financial market in particular, even though it does have something to do with Asia’s internal factors. Therefore, it is far from being a traditional crisis in one region, but rather a crisis of a new type in the course of the evolution of the world economic system. It has not only raised a new subject for the developing countries in their integration with the world economy, but also posed a new challenge to the work of maintaining the security of the global economic and financial systems.

Since the eruption of the financial crisis in East Asia, the international community has provided support, and assistance to East Asian countries, especially to those severely-affected. This should be affirmed. However, uncertainties still linger on as to whether there can be a favorable external environment for the economic recovery of Asian countries. Over-speculation by international hot money poses a new challenge to the economic security of all countries, the developing ones in particular, Defects in the international financial system restrain the efforts of the international community to resolve the risks of globalization. The Japanese economic recession and the fluctuation of the exchange rate of the yen have exerted additional pressure on the Asian economic recovery. Moreover, it is necessary to give serious consideration to the question of whether or not the specific national conditions of the developing countries can be fully respected and the negative impact of the bailout programs alleviated. In short, while competition is undoubtedly necessary in the process of economic globalization, cooperation should be enhanced all the more. Only coordination and cooperation are the best choice. The developed countries which play a pivotal role in the world economy should, in particular, undertake their responsibilities and obligations and create favorable conditions for the economic recovery in Asia.

All in all, Asia continues to have a bright future although the road is tortuous. Through joint efforts, the Asian people will surely be able to create a better tomorrow in the next century. Asia, either politically or economically, will be a crucial force in the new world pattern that is taking shape.

Mr. Chairman,

As a member of Asia, China in line with its grand cross-century blueprint, is speeding up its efforts to build a socialist market economic system and bring about a fundamental change in the mode of economic growth, with a view to keeping a sustained, rapid and sound development of the national economy. The financial crisis in East Asia will not slow down the pace of China’s reform and opening-up, nor has it done so, A China enjoying political stability, economic growth and social progress will not only benefit its 1.2 billion people, but also continue to make important contribution to stability and prosperity of Asia.

The Chinese Government has adopted a highly responsible attitude in facing up to the challenge of the East Asian financial crisis. While working to expand domestic demand to boost, its economic growth, China persists in not devaluing the RMB, thus making a positive contribution to stabilizing the regional economy. China has contributed about US$4 billion as aid to the Operational Budget of the IMF and has also provided assistance within its capability to the countries concerned through bilateral charmers. China will, as always, pull together with the East Asian countries in times of trouble and continue its efforts towards easing off the financial crisis in East Asia.