On the morning of 14 March 2005, the Third Session of the Tenth NPC held a press conference at the Great Hall of the People. At the invitation of Mr. Jiang Enzhu, spokesman of the NPC Session, Premier Wen Jiabao of the State Council met the press from home and abroad and answered their questions.
Spokesman Jiang Enzhu: Ladies and Gentlemen, good morning, we are most honored and privileged to have with us Premier Wen Jiabao to meet the press and answer questions. First of all, a few opening remarks from Mr. Premier.
Premier Wen: Ladies and Gentlemen, good morning. As far as I know there are more than 2000 journalists from China and abroad covering the NPC and CPCCC sessions. However, due to the limited seating capacity of this hall, only some 700 of them are present here. I would like to use this opportunity to express my thanks to the journalists for their interest in China's reform and development and for their objective and fair coverage of China. I would also like to say that in fact the Chinese people have shown the greatest interest in the two sessions. Yesterday, I logged on to Xinhuanet, and I saw hundreds of questions raised by ordinary people after they learned that I was going to give a press conference. I was deeply touched by their interest in state affairs. Many of their suggestions merit my and the government's serious consideration. The NPC session is over. Yet the road ahead could be rather bumpy. We must be sober-minded, cautious and prudent, especially when the situation is getting a little better. We must be mindful of the potential perils and get fully prepared for the worst. Our nation has gone through so many disasters and hardships in history that we are blessed with a sense of urgency, a determination to survive and an aspiration for peace and development. Our country is so big, and problems so numerous and complex that we, as a nation, must have the courage to overcome difficulties, the confidence to win and a dauntless spirit to work hard and persist. Today, at this press conference, I am ready to answer your questions. I will speak from my heart, so I am neither nervous nor afraid.
Spokesman Jiang: Now the floor is open for questions.
Xinhua News Agency: I am representing Xinhua News Agency and Xinhua Net. On behalf of all the journalists working for Xinhua News Agency, I'd like to thank the Premier for taking time out of your busy schedule to log on to xinhuanet. Last year you said macro-regulation was a new and severe task for the government, a test no easier than fighting against SARS. Now a year has passed. Could you comment on last year's work of macro regulation? What will be the new characteristics of this year's macro regulatory work? Will you strengthen the policy measures?
Wen: In the past two years, we fought an unexpected battle against SARS. We have also combined a series of timely and resolute measures to exercise better control of the economy. We can say now that those policies have achieved remarkable results. We have been successful in avoiding major economic fluctuations, preventing excessive price hikes and keeping prices stable. We have maintained stable and fairly rapid economic growth. Now we must not slacken our efforts in the slightest way. The situation we face now is like going upstream. If we don't forge ahead, we will simply fall back. First, the foundation for macro-regulation needs to be further consolidated. We face considerable difficulties in further improving grain output and farmers' income. In particular, because of the soaring prices for capital goods, it is more difficult for us to achieve these goals. Moreover, investment growth in fixed assets may probably pick up again. Coal, electricity, petroleum and transportation are still in short supply. In the first two months of this year, power generation increased by 12%, yet 25 provinces still experienced blackouts. In the economy, the supply chain is over stretched. Second, we are facing a series of dilemmas in the economy. For example: a slow economy growth rate won't work because it will be more difficult to create jobs, increase revenues and engage in necessary undertakings for society. An excessively fast growth won't work either, because if the economy is over-stretched for a long time, it will become unsustainable. Third, the problems we face in China's economy can all boil down to structural problems, crude mode of growth and institutional problems. These deep-rooted and underlying problems need time to be addressed. In a word, the top priority for the government is to further strengthen and improve the macro-regulatory measures, in order to maintain a stable and fairly rapid growth rate. "If the journey is 100 miles, traveling 90 is only half of it" says a Chinese proverb. We must not stop or waste our previous efforts. In addition we must be very careful and use different therapies in different situations, by combining expansive and contractive measures. We also need to use market tools and economic means to achieve macro-regulation objectives.
Bloomberg: A lot of social problems have cropped up in the course of rapid economic development in China. To address problems facing agriculture, rural areas and farmers is on top of your agenda. But some experts say unless farmers are granted the right to use land, or allowed to own land, it is impossible to solve the problems they face. Do you think it is possible to give them land ownership?
Wen: China's reform started in the countryside. Rural reform started with giving farmers the land management right. Rural land is under collective ownership. In the early days of reform and opening-up, the first step we took in the countryside was to establish the household contract responsibility system. Farmers were given the right to manage their land, and such right of the farmers has been extended time and again. Now I can say farmers' autonomy of production and management won't change for a long time. In fact, it will never change.
Taiwan Eranews: The just-concluded NPC session has adopted the anti-secession law by an overwhelming majority. The text of this new law has been a subject of great interest to many. I am myself interested, in particular, in an important section of this new law, which provides for continuing cross-straits exchanges. My question is: under this framework of the new law, what specific measures will the State Council adopt to promote the continued exchanges. Moreover, many business people from Taiwan are living in cities of the mainland, either doing business or having already settled down. Will this law affect their interests? If not, will the law provide greater protection of their interests?
Wen: I want to ask you a question first. Have you read the law?
Taiwan journalist: I have read notes related to the law.
Wen: First of all, please send my greetings to the 23 million compatriots in Taiwan. Your question actually gets to the essence of the law, which is meant to strengthen and promote cross-Straits relations. This is a law for peaceful reunification. It is not targeted at the people of Taiwan, nor is it a war bill. The law explicitly provides for encouraging and facilitating cross-Straits personnel exchanges, encouraging and facilitating economic cooperation and three direct links between the two sides, encouraging and facilitating cross-Straits exchanges in the educational, scientific, technological, and cultural fields. The law also stipulates that the legitimate rights and interests of Taiwan business people will be protected. The law is meant to check and oppose the secessionist forces in the name of "Taiwan independence". Only by so doing will peace emerge in the Taiwan Straits. Peace and stability in the Taiwan Straits will create favorable conditions for Taiwan business people and foreign investors to invest in the mainland.
You asked about specific measures. According to the recent important remarks of General Secretary Hu Jintao on the question of Taiwan, we will protect the legitimate rights and interests of the Taiwan people on the mainland. We will do anything that is conducive to the people of Taiwan. First, we will promptly make cross-Straits charted passenger flights available not only on traditional festivals but on a more permanent basis. Second, we will take measures to address the issue of sales of agricultural products from Taiwan, especially Southern Taiwan to the mainland. Third, we should promptly solve problems so that fishermen from the mainland can continue their contract labor services in Taiwan. We will introduce more favorable policies and facilitating measures for compatriots in Taiwan.
Reuters: The renminbi currency has been the focus of global attention. Important trading partners are urging China to adopt a more flexible exchange rate. China said this will be a long term process. But what reform plan do you favor now and when will the first change occur?
Wen: China's exchange rate reform started in 1994. It has never stopped. Our objective of the reform is to have a market-based, managed and floating exchange rate. When we consider reform plans, our purpose is to make the exchange rate more responsive to supply and demand in the market. What we have been doing is to lay a solid foundation for such reform. A couple of necessary conditions would include: first: macro-economic stability and growth, and second: a healthy financial situation. In the mean time we have already eased many of the controls on foreign exchange. When talking about changes to the exchange rate regime or the revaluation of the renminbi, we have to consider questions like: what impacts these measures will have on the domestic enterprises, on neighboring countries and even the world? These issues are being heatedly debated.
Frankly, some of the people who have strongly urged revaluation of the renminbi have not given much thought to the problems that may arise from it. China is a responsible country. When we decide upon the renminbi revaluation or reform of our exchange rate regime, we have to take into consideration not only our domestic interests but also possible impact on other countries and the world.
Finally, let me say the exchange reform is in progress; regarding the timing of the reform or specific measures, maybe they will come unexpectedly.
CCTV: You have mentioned on many occasions that the priority of 2005 is to further promote reform, and you have called 2005 "the year of reform". In the government work report, you emphasized that the task of this year is to deepen reform unswervingly and to remove structural impediments to economic growth. In your view, what are the most urgent structural problems to be addressed this year?
Wen: Right, I have said on many occasions that this year is a year of reform. I say so for three reasons. First, to eliminate the destabilizing and unhealthy factors and to solidify the achievements of macro-regulation, we have to rely on reform. Second, to address the deep-rooted problems in the economy and to achieve restructuring, transformation of the economy growth pattern, we, too, have to rely on reform. Third, to realize social fairness and justice and to build a harmonious society, we have to rely on reform. Reform is not a task for any single year; it has to be a long-term job. In many cases, sooner is better than later. Otherwise the problems will become too entrenched to unravel.
This year, there are 5 priorities in our reform. First, to restructure the government bodies and transform the functions of the government; second, to promote SOE reform, focusing on corporate governance and the share-holding system; third, to promote financial reform, which is a critical and often problematic aspect of our economy and requires great efforts from us; fourth, rural reform, centering on rural taxes and administrative fees. The purpose of this reform is to change such elements in the rural superstructure that is inconsistent with the economic base; and fifth, reform the social security system and promptly establish one that is in line with China's reality.
This year is a year that we are going to fight the toughest battle in the process of reform.
Hong Kong Mingbao: The central government has all along hoped for continued prosperity and stability in Hong Kong. Now the economy has recovered and society has stabilized in Hong Kong. Why has the Central Government accepted resignation of Chief Executive Mr. Tung Chee Wah at such a moment? What are your expectations on the acting Chief Executive Mr. Donald Tsang?
Wen: The resignation of Mr. Tung has been a focus of attention among Hong Kong people. In the past seven years since Hong Kong's return, the principle of "one country, two systems" has been well implemented. The capitalist system in Hong Kong has not changed. The laws in Hong Kong have remained basically intact and the way of life has remained the same. In particular, Hong Kong has overcome the difficulties caused by the Asian financial crisis and achieved economic recovery and higher living standards for its people. Mr. Tung resigned for health reasons, I believe he is a sincere man and will win understanding of Hong Kong people and respect from the Central Government.
In the past seven years, Mr. Tung has done tremendous and creative work for the implementation of the principle of "one country, two systems" and the Basic Law, and for continued prosperity and stability in Hong Kong. He is hard-working. He has few complaints. He has the courage to take responsibility. He has demonstrated in his work a strong sense of responsibility to the country and to Hong Kong. I believe Hong Kong people will never forget what he has done. After his resignation, the election of the new Chief Executive will proceed in strict accordance with the Basic Law and other relevant laws of Hong Kong. I believe Hong Kong people are fully capable of running Hong Kong well. The Central Government is steadfast on the principles of "one country, two systems" "Hong Kong people administrating Hong Kong" and a high degree of autonomy. We will strictly follow the Basic Law. At this moment, I hope our compatriots in Hong Kong will work together with one accord for better development. They will do an even better job in promoting prosperity and stability in Hong Kong.
ITAR-TASS: Later this year, you are going to meet the Russian Prime Minister. Could you brief us on the latest developments in economic cooperation and trade between China with Russia, especially in the energy sector?
Wen: China and Russia are friendly countries, sharing a border of over 4,000 kilometers long. In recent years, China-Russia relations are better than ever before. Last year, the two countries defined principles for developing strategic partnership of coordination. We worked out plans on implementing the Sino-Russian Treaty on Good Neighborliness, Friendship and Cooperation, and set the goal of USD 20 billion in trade in 2004. This volume is to be further increased to between USD 60 to 80 billion by 2010. China and Russia solved the historical legacy of boundary issues, laying a solid foundation for greater development of their bilateral ties. In the latter half of this year, I will meet the Russian Prime Minister for the tenth regular meeting. We are going to further discuss economic cooperation and trade between the two countries, in particular, energy cooperation.
With respect to energy cooperation, I'd like to make three points: First, energy cooperation is an important component of the overall relations between China and Russia. Second, energy cooperation between the two countries is based on equality and mutual benefit. Third, there are already important agreements concerning energy cooperation. For instance, we have agreed to increase Russian oil exports to China through railway. The targets are: 9 million tons for 2004, 10 million tons for 2005, and 15 million tons for 2006. The Russian Government and President Putin have made it very clear that preference will be given to China when they build the Siberian oil-gas pipeline. We will also strengthen cooperation in oil and gas exploration and exploitation. In addition, efforts have been made in other areas of economic cooperation and trade.
Asahi Shimbo: Despite the ever increasing personnel exchanges and trade, people used to characterize our political ties as "cold" and economic relations "hot". But now while the political ties are still "cold", the economic ties have cooled down. What is your comment on such a situation? Moreover, what does China expect from Japan?
Wen: The relationship with Japan is one of the most important bilateral relationships of China. We are pleased to see that after normalization, China-Japan relations have enjoyed significant development. Last year, our trade approached USD 170 billion. More than 4 million people traveled between the two countries. But as you said, there are obstacles to this relationship, especially in the political field. The fundamental problem is Japan should correctly view history.
In addition to the three political documents, I believe the following three principles have to be abided by in order to strengthen and improve relations between China and Japan:
First, take history as a mirror and look toward the future. This year marks the 60th anniversary of China's victory in the resistance war against Japanese aggression. That part of history reminds us of the sufferings war brought to the Chinese, Asian and Japanese people. We hope Japan will seize this opportunity to promote the friendship between China and Japan.
Second, Japan should stick to the "one China" principle. The security alliance between Japan and the US is a bilateral matter between the two countries. Yet we are concerned in China because it is related to the Taiwan question, which is an internal affair of China and brooks no direct or indirect interference by any foreign forces.
Third, strengthen cooperation for common development. Friendly cooperation between China and Japan has great potential, especially in the fields of economic cooperation and trade. Promoting such cooperation is for shared development.
In addition, I wish to make three suggestions. First, conditions should be created in order to promote high-level exchange of visits. Second, the foreign ministries of the two countries should work together to launch strategic studies on ways and means to promote friendship. Third, the historical legacy should be appropriately handled.
People's Daily: In your government work report, you said agriculture, rural area and farmers remain top priority of all our work and you proposed specific measures to solve these problems including abolishing agriculture tax by the end of next year. What do you think are the fundamental solutions to these problems? Any long-term plan in your mind?
Wen: Your question has reminded me of the remarks by Nobel Laureate, economist Theodore Schultz. He said "most of the people in the world are poor, so if we knew the economics of being poor, we would know much of the economics that really matters. Most of the poor people earn their living from agriculture, so if we knew the economics of agriculture, we would know much of the economics of being poor. I am not an economist, but I am deeply aware of the paramount importance of agriculture, rural area and farmers in China. Without moderate prosperity in the countryside, there won't be moderate prosperity in the whole country. Without modernization of the countryside, there won't be modernization of the whole country.
We do have a long-term plan for rural reform and development. It has two phases. In the first phase, we introduced the household contract responsibility system, which in essence was to give farmers the autonomy in production and management. As a result, the policy greatly liberalized the productivity in the countryside. In the second phase, we should make industry nurture agriculture and cities support the countryside. We should give more, take less and liberalize the countryside. I believe we have now entered the second phase.
We must accomplish four jobs in the second phase. One, promote rural reforms with reform of rural taxes and administrative fees as the central task. Two, we should improve productivity by building water conservancy projects and promoting wider application of science and technology. Three, we should promote cultural and other social undertakings in the countryside. Four, promote grass-roots democracy by means of self-governance among villagers, direct election at the village level and transparency in village affairs and in government affairs at the county and township levels.
CNN: My question is about the Anti-Secession Law. The legislation gives China the right to use non-peaceful means. Could you clarify what could be non-peaceful means? If it comes to a broader conflict with the US, will China build an army that "can win any war it fights" as you said in the opening statement in NPC session?
Wen: First of all, let me again explain what kind of law the Anti-Secession Law is. It is not targeted at the Taiwan people, but to check and oppose the secessionist force in the name of "Taiwan independence". The law is by no means a war bill, but for the peaceful reunification of the country. It is not aimed at changing the status quo in the Taiwan Straits, which is both sides belong to one China. It is conducive to peace and stability in the Taiwan Straits.
Second, let me talk about the status quo of the Straits, which is an important issue. There is only one China in the world. Although the mainland and Taiwan have not been reunified, the fact that both sides belong to one China has never changed in the slightest way.
Third, the three scenarios, where, according to the law, non-peaceful means will be executed, are the last things we wish to see. So long as there is a ray of hope, we will do our utmost to strive for peaceful reunification. We have enacted this law to give expression to the will of the entire Chinese people, including the 23 million people in Taiwan, to safeguard national unity and territorial integrity and oppose Taiwan's secession from the country.
If you care to read the two American anti-secession resolutions adopted in 1861, you will find they are similar to our law. In the US, the civil war broke out shortly afterward. But here we don't wish to see such a situation. A Chinese saying goes "Even a foot of cloth can be stitched up. Even a kilo of millet can be ground. How come two blood brothers cannot make up?" The Taiwan compatriots are our own brothers. We hope all of them will understand the intention of this legislation. We also hope all countries and peoples in the world who adhere to one China principle and care for peace and stability in the Taiwan Straits will understand and support this law.
You asked about the increase of China's military strength. Let me spend a few minutes on this. China pursues a defensive national defense policy. China's military strength, if compared to that of the US, especially in terms of military expenditure, lags far behind. There is no need to cite any figures here, but let me make one fact clear. For the past a hundred years, China was subjected to bullying and humiliation by other powers. But till now we have never sent a single soldier abroad to occupy an inch of foreign land. The Taiwan question is completely China's internal affair and tolerates no interference from any foreign country. We do not want foreign interference, yet we are not afraid of any.
Press Trust India reporter: India and China are going to celebrate the 55th anniversary of the establishment of diplomatic relations next month, how do you comment on the relations between two countries? Can India and China be good friends and good neighbors? Thank you.
Wen: I hope the 55th anniversary will become a new point of departure for deeper friendship and better cooperation between the two countries. Our relations have entered a new stage. I will soon pay a visit to India. The purpose of my visit is to achieve agreements on three important issues. One is to fully grasp the importance of relations between India and China from a strategic and comprehensive perspective. Our combined population is 2.3 billion, about 40% of the world's total. The significance of Sino-Indian friendship is immeasurable for Asia and the world. Second, we should tap into the tremendous potential, expand cooperation and strive for common development. Third, we should set down principles to solve the boundary issue that is left over from history and find a fair and reasonable solution acceptable to both sides on the basis of equal consultation, mutual understanding and mutual accommodation, respect for history and accommodation of reality.
I'd like to ask this reporter to take my message back to the great Indian people that China and India are not competitors but friends. I wish to conclude by quoting from Sariraka Upanishad, an ancient Indian scripture written 3,000 years ago, probably in Sanskrit. It says to the effect:
May He protect us both together,
May He nourish us both together,
May we work conjointly with great energy,
May our study be vigorous and effective,
May we not hate any,
Let there be peace!
Let there be peace!
Let there be peace!
German "Handelsblatt" reporter: Last week there was discussion in the NPC on death penalty. Does your government plan to abolish death penalty? If yes, when?
Wen: We are reforming our judicial system, including taking the right to review death penalty cases up to the Supreme People's Court. But given our national conditions, we will not abolish death penalty yet. Half of the countries in the world still have death penalty. However, we will institute effective system to ensure prudence and justice in giving death sentence.
Economic Daily: Last year, the State Council issued a Nine-point guideline on reform, opening-up and stable development of the capital market. Despite the numerous measures adopted by government agencies, the stock market responded coldly and stock prices continued to plummet. Many people are trapped in the bear market. Will the government take strong measures to reverse such a situation? What do you think investors can expect of the market this year?
Wen: The question you asked probably has the highest click rate on the internet and is also one of the big concerns of people. China's stock market has developed in tandem with the development of the socialist market economy and has made important contribution to China's economic growth. However, we should admit we are not knowledgeable or experienced enough in this regard. Moreover, the infrastructure is weak and the market mechanism is imperfect. These problems have caused the continued fall of stock prices. I seldom speak about the stock market, but I'm watching it everyday. Let me say that, China will continue the policy of developing capital market and increase direct financing. We will continue to implement the nine-point guideline and make greater efforts in the following aspects. First, we should improve the quality of the listed companies, which is most fundamental; second, we should establish an open and fair securities market; third, we should tighten oversight and fight against frauds and crimes; fourth, we should consolidate the foundation for securities market by putting in place appropriate systems; fifth, we should protect the interests of the investors, specially non-government investors; and sixth, we should properly solve historical legacies accumulated in the process of developing a securities market.
The press conference lasted about two hours, with more than seven hundred journalists present.