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Kobe, Japan(January 14, 2001)
Mr. Chairman,
The East Asian financial cooperation is
gathering a good momentum of moving forward. Following the
agreement on direction and priority for East Asian Cooperation
reached by 10+3 leaders in Manila in November 1999, 10+3 finance
ministers adopted the Chiang Mai Initiative in Chiang Mai,
Thailand last May. The Initiative aims at expanding the present
ASEAN Swap Arrangement to all ASEAN member countries and establishing
currency swap and repo arrangements among ASEAN plus China,
Japan and Korea on bilateral basis. After the Chiang Mai meeting,
10+3 countries immediately began to work on concretizing the
Chiang Mai Initiative. The basic framework and principles
regarding currency swap and repo arrangements are under discussion
and some progress has been made.
The Chiang Mai Initiative marked a substantial
step toward financial cooperation among East Asian countries.
It is a good beginning for the countries in the region to
enhance financial self-help and support mechanism. The objective
is to complement existing current international facilities
---- by providing liquidity support for the nations in the
difficulty of international payment. According to article
7 of the Chiang Mai Initiative, 10+3 finance ministers also
mandated ASEAN secretariat, on top of currency swap agreement,
to work on appropriate self-financing vehicle for the region
with a view to strengthening the collective capacity against
possible future financial crisis.
I would like to take this opportunity
to share with you my reflections on the prospect of East Asian
Cooperation.
Firstly, the East Asia Cooperation has
been initiated by the Leaders' Meeting of ASEAN plus China,
Japan and Korea, it has a strong political commitment, thereby
creating a solid foundation and impetus for further development.
In the face of the difficulties posed
by 1997 Financial Crisis, the leaders of Asian Countries have
realized that it is imperative for them ---- through coordination
and cooperation---- to strengthen collective capability against
crises so as to recover their economies as quickly as possible.
In this context, the leaders of ASEAN, China, Japan and Korea
took advantage of the 30th anniversary of ASEAN to hold their
first informal meeting in Malaysia in late 1997. Since then,
leaders of ASEAN+3 met regularly and had in-depth discussions
on the issues concerning regional finance, economy, politics
and security etc. Specifically, they reached the consensus
on the key role of financial stability in sustaining regional
economic development. The leaders also shared the conviction
that to build a peaceful environment for economic development
serves the greatest common interest of East Asian countries.
To this end, it is imperative for the East Asian countries
to strengthen coordination and cooperation among themselves.
In November 1999, leaders of 10+3 issued the Joint Statement
of East Asia Cooperation in Manila, which crystallized the
direction and priority for the future by highlighting the
importance of developing economy through cooperation.
In light of this principle, the concept
of regional financing mechanism symbolized by the Chiang Mai
Initiative has been moving forward steadily while the cooperation
in trade and investment is making headway.
The financial and economic cooperation
under 10+3 framework has given a spur to the progress in overall
East Asian Cooperation. In November 2000, the fourth 10+3
informal leaders meeting in Singapore agreed to designate
two task forces to study the possibility of transforming informal
meeting to summit and establishing an ASEAN+ Northeast Asia
Free Trade Zone. Moreover, the leaders of China, Korea and
Japan agreed to meet regularly on the occasion of 10+3 leaders
meeting since 2001.
In short, thanks to the consensus and
political commitment of leaders of ASEAN plus China, Japan,
and Korea (10+3), the regional financial and economic cooperation
has made a steady progress, which will in turn help consolidate
and expand common grounds and narrow divergence, thereby providing
more political support.
Secondly, given diversified background
in history, culture and level of economic development, the
East Asian countries must pursue regional cooperation in a
gradual and orderly manner, taking into account their unique
characteristics.
Compared with other regional cooperative
mechanisms, particularly the European economic and monetary
union, Asian nations are more diversified in history, culture,
political regime, and levels of economic development. Therefore,
there is still a long way to go and arduous task ahead for
these nations. And they must choose a cooperative pattern
suitable to the regional characteristics rather than copy
the model of others'.
It is noteworthy that the evolution of
ASEAN itself experienced several stages. It started with those
countries of similar economic features, then was gradually
expanded to more countries. Likewise, the current cooperation
among the East Asian countries should also start from the
areas where the consensus can be more easily reached, and
then spread gradually on the basis of consolidation. Contrast
to other regional organizations that started from trade cooperation
before their expansion, the East Asian Cooperation started
from the financial field where they shared consensus before
the comprehensive cooperative relations could be gradually
established in the field of finance, trade and investment.
Thirdly, The East Asian cooperation has
emerged along with the vigorous momentum of regionalization
in global economy, which is consistent with economic globalization.
As known to all, there are two sides to
the coin. Globalization is no exception. While having accelerated
world economic development, it has also brought about the
problem of uneven distribution of benefits, thereby accentuating
global economic polarization. As a result of dramatic advancement
of modern information technology, the Digital Divide has further
widened the income and development gap between the developed
and developing countries. Many developing countries found
themselves increasingly marginalized in the course of globalization.
Despite some undesirable side effects,
economic globalization has become the general trend of the
time. History has taught us that if a country shut itself
from the world in its development course, it would be quickly
left behind by the rest of the world. Integration into the
world economy, however, means enormous challenges to take.
If a country, the developing country in particular, wants
to achieve rapid economic development, it must face squarely
the fact that our economies are increasingly intertwined,
sciences and technologies are advancing by leaps and bounds,
and global competition is getting more and more fierce. Therefore,
it is necessary for the countries to implement appropriate
strategies to better integrate their economies with globalization,
and better coordinate their economic policies so as to maximize
benefits from globalization.
Regionalization has emerged along with
economic globalization, such as EU, NAFTA, ASEAN plus China,
Japan and Korea or 10+3. Many economies have embarked upon
regional cooperation for the sake of sharing benefits and
avoiding risks. I don't think the emerging regionalization
runs counter to globalization. Rather, it means more equal
participation and closer cooperation among the economies in
a region, which ought to lead to a more reasonable globalized
economy. Meanwhile, enhanced coordination and cooperation
among different regional cooperative mechanisms will also
promote a smooth development of economic globalization.
It is my view that, by strengthening the
region's capacity to withstand and prevent financial crisis,
the emerging economic cooperation in East Asia is bound to
help maintain the financial stability and economic development
in this region. Furthermore, by bringing their comparative
advantages into full play, it will enable Asian nations to
participate in the global cooperation, including their cooperation
with the EU, and hence contributing to the orderly progress
of globalization.
As the finance minister of China, I have
personally participated the negotiations of the Chiang Mai
Initiative. Despite the difficult time we share when we have
to start something from the scratch and when "all is
ready except what is crucial",. I firmly believe that,
with the strong promotion of all parties concerned, East Asian
cooperation has the full potential to grow into a regional
cooperative mechanism by taking a road of its own characteristics,
and thereby making our Asian contribution to the orderly progress
of globalization.
Thank you for your attention.
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