The principal aspect of the world economic situation at present has improved to some extent. The negative influence of the Asian financial crisis has kept on easing up, the international financial environment has turned for better and the economic growth in the United States is still fairly strong. The prospect of the world economy on the whole is better than last year. But the unbalanced development is still pregnant with grim possibilities, the disparity between the North and the South has further widened and there are still many unstable factors.

Owing to the improvement of their external environment and internal readjustment and reform, those countries afflicted by the Asian financial crisis have shown good sings in varying degrees, such as a favorable balance in current accounts, an increase in foreign exchange reserve, a reflow of capital, a rally in stock market, a gradual stability in exchange rate and a reduction of short-term foreign debts. But the rejuvenation is still fragile. The growth rate of the economy in Latin America has dropped apparently which needs a process of rally and resurgence. The launching of Eurodollar is helpful to the optimization and readjustment of the industrial structure inside the European Union and the momentum of the economic development is expected to recover step by step. The Kosovo war has caused disastrous damages to the economy and the infrastructure of the Republic of Yugoslavia, but the influence is mainly in the surrounding areas. A strong momentum of resurgence appeared in the first quarter of this year in Japan. Further incentive measures will be favorable to maintaining the momentum of resurgence. Behind the good condition of "high growth, low inflation and low unemployment", the economy in the United States is faced with a negative savings rate, a widening of the unfavorable balance of international trade and an increase of stock market risks.

Since the beginning of this year, though its economy has been under the serious lagging influence of the regional financial and economic crisis, China has persisted in implementing a stable exchange rate policy and, by adopting proactive financial and monetary policies, has spared no effort to boost domestic demand and maintain the momentum of economic development, thus continuing to make positive contributions to the recovery of the regional economy. We have all along adopted an active and enterprising attitude to participate in the economic cooperation with neighboring countries and in the world.

We are pleased to note that the regional and inter-region cooperation is becoming active again. The summit of 48 countries of the European Union and Latin America has determined to establish a strategic relationship between the two sides. The economic cooperation in northeast Asia has shown new trends. The role played by the South Common Market and the Andean Group is being constantly strengthened. Developing countries have vigorously carried out regional or sub-regional economic and trade cooperation, displaying their active and enterprising posture under the lash of the tidal current of globalization.

On the whole, there are still many uncertainties, but opportunities and risks exist simultaneously. We hope that the principal developed countries will adopt a responsible attitude to restrain the speculative factors of international capital, and at the same time, take practical actions as soon as possible to truly alleviate the debt burdens for poor countries and improve the external environment of developing countries for the economic development. This will be beneficial to the long-term prosperity of the economies of developed countries.