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WTO official lauds China’s efforts to increase LDC inclusion in world economy

Updated: Sep 20,2016 6:59 AM     Xinhua

GENEVA — The World Trade Organization (WTO) Deputy Director-General Yonov Frederick Agah welcomed on Sept 19 China’s ongoing efforts to increase the integration of the Least Developed Countries (LDC) into the global market amid promising South-South cooperation trends.

“The consistent support provided by China to enhance integration of LDCs into the multilateral trading system is truly commendable,” said Agah at the opening session of a two-day South-South Dialogue on LDCs and Development.

“While China has been the top destination of LDC exports since 2009,” other developing economies such as India and Thailand also are among the top export destinations for LDCs, he added.

Recent dynamics have seen South-South trade take off, spurring much needed economic growth and development in LDCs.

According to figures, South-South merchandise trade has almost tripled in value since 2004 to reach $4.2 trillion in 2014, representing 23 percent of world merchandise trade.

Similarly, South-South foreign direct investment (FDI) stocks have increased by two thirds from $1.7 trillion in 2009 to $2.9 trillion in 2013.

China’s Ambassador to the WTO, Yu Jianhua, explained that much of this success can be attributed to Beijing’s ambition to enhance the South-South cooperation.

The Chinese official explained that existing ties are guided by China’s unwavering support towards LDCs and also by its stance within the WTO, given that Beijing and LDCs share the same core interests.

“Since 2005, China has faithfully implemented the Decision of the Hong Kong Ministerial Conference, providing Duty-Free-Quota-Free treatment for 97 percent of export from LDCs, which is the highest among developing preference providers,” the diplomat highlighted.

“China has also liberalized a number of service sectors which are of interest to LDCs under the LDC service waiver,” he added.

Yu signaled China’s aim to increase investment in the world’s poorest nations to reach $12 billion by 2030, while supporting the interests of LDCs in multilateral trade negotiations.

He also reminded that China has written off LDCs’ debt on outstanding intergovernmental interest-free loans due by the end of 2015.

“At this critical moment, it is increasingly essential for us to join hands together. Further strengthening the South-South cooperation within the WTO framework, with an aim to fully protect our right to achieving the development goals,” he said.

This is especially important, given that many challenges remain to be addressed to achieve equitable and sustainable development.

Not least is the fragile state of the global economy, which has struggled to recover from the 2008 financial crisis.

While leading to falling commodity prices, a factor that has hit commodity producing LDCs particularly hard, it has also resulted in lower demand for raw materials in developing economies.

“The share of LDCs in world exports has gone below 1 percent in 2015, posing a daunting challenge for the Group to achieve 2 percent share of world trade by 2020 as has been stipulated in the SDGs (Sustainable Development Goals),” Agah continued.

This calls for redoubled efforts to enhance the integration of LDCs into the world economy, including applying measures to bolster trade, investment and diversification in LDC markets, he explained.

It also entails finding new ways to enable LDCs to make the most out of the multilateral trading system, he added.

In the two-day South-South Dialogue on LDCs and Development, discussions are attended by around 30 LDCs as well as a group of developing economies such as China, India and Brazil.

Participants review the evolving pattern of South-South cooperation on trade in a bid to strengthen the coordination among LDCs, and between LDCs and developing economies in the context of concluding multilateral negotiations.