Mr. Chairman,

Ladies and Gentlemen,

This is my first time to attend an annual plenary meeting of the InterAction Council. However, many of you here are my old friends. It gives me great pleasure to join you in the King Abdullah Economic City, Saudi Arabia. Just now I listened to your interventions, and I feel greatly inspired. Here I wish to share with you my observations.

The present state of the world is undergoing the most complicated and profound changes since the end of the cold war. The development of a multi-polar world and economic globalization are gaining momentum. Countries around the world are becoming more than ever interconnected and interdependent. The pursuit of peace, development and cooperation becomes the trend of the times.

In the meantime, however, the destabilizing factors and uncertainties in the world political and economic areas are remarkably on the rise. Globalization has brought important changes to the international security situation. Old problems have acquired new dimensions and new problems have rekindled old tensions. The traditional and non-traditional security issues are intertwined. Regional hotspot issues, such as the Middle East, Iran, Iraq, Afghanistan and the Korean nuclear issue are all at critical crossroads. It is therefore imperative for all parties to take a long-term and overall perspective, uphold dialogue and consultation, and seek a comprehensive and proper settlement through unremitting diplomatic efforts. The global financial crisis, the world energy security and the newly-emerged influenza A (H1N1) in some countries have again shown that the non-traditional security issues are posing a major threat to the current world.

Ladies and Gentlemen,

The global financial crisis is posing the most serious challenge to the world economy ever since the Great Depression in the last century, and is severely affecting people’s lives. Countries around the world have taken a range of countermeasures to deal with the crisis, which have produced initial results. However, on the whole the crisis is still spreading. The general trend towards a world economic recession remains unchanged. The problems within the financial system are yet to be resolved. The real economy is worsening in a way beyond people’s expectations. The global economic recovery might experience a long and tortuous course.

The cause of the crisis is multifaceted. It includes inappropriate macroeconomic policies of certain countries, the over expansion of the financial institutions in their excessive pursuit of profits, the lack of self-discipline of the financial rating agencies, the gap between the regulatory capacity and financial innovation, and the failure of the international financial institutions to truly reflect the global reality. We need to have a comprehensive understanding, draw lessons from the past, and prevent such mistakes from reoccurring.

The most pressing task now is to strengthen confidence, enhance cooperation, and realize global economic recovery. We should prevent the economy from falling into a long and serious recession, avoid the beggar-thy-neighbor approach, and stand against all forms of protectionism. We should accelerate reform and restore the international financial order. What is particularly worth noting is that this crisis was not caused by developing countries. However, the developing countries, the least developed countries in particular, are bearing the brunt. The international community should pay close attention to and minimize the damage of the financial crisis to developing countries, and improve their external environment.

Another serious challenge to the steady and sustainable growth of the world economy under globalization is energy security. I wish to share with you my thoughts on how to maintain international energy security.

First, we should enhance dialogue and cooperation among energy exporting countries and consuming countries, strengthen policy coordination, improve price setting and emergency response mechanisms in the international energy market, and ensure a globalized and diverse supply of energy and strike a basic balance between supply and demand.

Second, we should foster a sound political environment, work hard to maintain stability in energy producing regions and ensure safety and accessibility of international energy transport channels. Regional dialogue and cooperation should be promoted vigorously to increase political and security mutual trust among countries.

Third, we should invest more in development of green, clean, alternative and renewable energies and promote research, development and dissemination of energy conserving technologies. Developed countries should provide economic and technical assistance to developing countries.

Fourth, we should advocate a scientific concept on energy consumption. Countries should transform their economic growth patterns and raise energy efficiency. At the same time, we need to encourage our citizens to practice economy and frugality and curb energy abuse.

Ladies and Gentlemen,

China’s economic development has been closely linked to the rest of the world. China cannot achieve its development in isolation from the world and the world needs China to achieve development. Problems that arise from globalization have exerted an impact on China.

The ongoing international financial crisis has led to increasing difficulties in China’s domestic economic performance. In order to effectively tackle the financial crisis, the Chinese Government swiftly and decisively adjusted its macroeconomic policies and adopted a proactive fiscal policy and a moderately easy monetary policy. It promptly rolled out a package plan to promote steady and fast economic growth. The plan mainly includes policies to comprehensively boost domestic demand, strengthen infrastructure development across the board, enhance competitiveness and independent innovation capacity of the industries in an all-round manner, improve people’s lives and raise people’s educational level. These measures are paying off. China has the confidence to overcome difficulties, continue to promote steady and relatively fast economic growth and contribute its own part to world economic and financial recovery and stability.

At the same time, given tremendous difficulties, China has maintained basic stability of the RMB exchange rate and stayed committed to strengthening multilateral, regional and bilateral cooperation in trade finance. China is doing all it can to support relevant countries so that we can all emerge stronger from the crisis. China has undertaken to honor its assistance commitments and will continue to help other developing countries. China will continue to work with the rest of the international community to strengthen macroeconomic policy coordination, promote reform of the international financial system and take active steps to maintain stability of the multilateral trading regime.

China, a big country with a sizable population, is currently undergoing accelerated industrialization. It faces pressure in terms of growing the economy, rooting out poverty, conserving energy and cutting down pollution discharge. Despite the pressure, the Chinese Government is energetically promoting development of production and consumption patterns and a way of life that use fewer resources and less energy and help protect the environment. It is also working to build a circular and sustainable national economic system of low input and high output, with low energy consumption and less pollution. This will enable China to move forward along the path of sustainable development of advanced production, prosperity and sound ecological environment.

Ladies and Gentlemen,

I always believe that the course of human development is a history of encountering difficulties, meeting challenges and realizing progress. Big crises, more often than not, breed big opportunities and in turn, become the force driving big development. In a globalized world, wellbeing of all countries is interconnected. All countries should build a concept of mutual benefit and win-win cooperation to handle problems brought by globalization. They should jointly meet the challenges through unity and cooperation, and reject the cold war mentality of confrontation, containment and contest. I believe that as long as all parties shore up confidence, keep the hope, put aside out-dated and biased opinions and carry out practical cooperation, we can overcome the challenges brought by the international financial crisis and build a brighter future for the world.

Thank you.