Premier Wen Jiabao answered Chinese and overseas journalists' questions on
the concluding day of the National People's Congress annual session in the Great
Hall of the People on Friday. Following is the full text of the questions and
Premier: Ladies and gentlemen, comrades, this is my last press conference as
the premier of this government during the sessions of the National People's
Congress and the Chinese People's Political Consultative Conference. People all
over China have followed the two sessions with keen interest. Over 1 million
questions have been posted for me on the Internet, which have been read by over
26 million people.
Yesterday, I browsed a website and came cross this question: How close does
the Premier feel to us in his heart? What is on his mind? Yesterday afternoon, I
received a letter written to me by pupils of a primary school and forwarded by a
deputy. Busy as I was, I wrote a letter back to them with a writing brush,
wishing them all the best.
I also read a news story on the Internet that a CPPCC
member has put forward a proposal for four years in a row, calling for the
establishment of medical insurance for children. I took his proposal very
seriously and immediately gave written instructions that we need to handle
matters concerning children's health on a priority basis and that the competent
government authorities should take steps to address this issue.
Premier Wen Jiabao waves to reporters at the press conference after the
closing ceremony of the National People's Congress on Friday. Yang
It has been four years since this government took office. These four years
have taught us one thing: We must be guided by the fundamental principle that
all the power of the government is bestowed on us by the people and that all the
power belongs to the people. Everything we do should be for the people; we must
rely on the people in all our endeavors, and we owe all our achievements to the
people. We must uphold the honorable conduct of public servant. Government
officials should be good public servants and serve the people. They do not have
any other power.
We must retain the conviction that as long as we have a free mind, keep pace
with the advance of the times, seek truth, continue reform and opening up,
pursue scientific, harmonious and peaceful development, we will surely turn
China into a prosperous, democratic, culturally-advanced, harmonious and
Wall Street Journal : International investors are now very interested in
China's stock market. Do you think the rise of the stock market over the past
two years went too far too fast? And the average Chinese investors might be
risking too much? What measures is your government considering to further cool
down or regulate the stock market? And on another topic related to investment,
the government has announced plans for a new agency to manage the
diversification of China's foreign exchange reserves. Can you tell us what kind
of assets this agency will invest in?
Premier: I follow closely the development of the stock market, and I
particularly hope to see its healthy growth. Since last year, we have
strengthened the development of institutional infrastructure for the capital
market. In particular, we have successfully introduced the reform of listing
non-tradable shares of listed companies, thus resolving an outstanding issue.
Our goal is to build a mature capital market.
To meet this goal, first, we need to improve the performance of listed
companies. Second, we need to develop an open, fair and transparent market
system. Third, we need to enhance oversight and regulation of the capital market
and especially improve the relevant legal framework. Finally, we should see to
it that stock market related information is released on a timely basis and make
individual stock investors more aware of investment risks.
As to the issue of how to use China's foreign exchange reserves you have
mentioned, this is indeed a big issue we face. From our experience, we know how
difficult it was when we lacked foreign exchange. In the 1990s, China did not
have enough foreign exchange, so we borrowed foreign exchange from the IMF. The
IMF only lent us $800 million. Now our foreign exchange reserves have exceeded
$1 trillion, and how to make good use of them has become a new issue for us.
China practices diversification of its foreign exchange reserves to ensure
their security. Yes, we do plan to set up a foreign exchange investment company,
and it will not be under any government department. The company will manage the
foreign exchange according to law on a paid-use basis. It will be under
government oversight and regulation and should preserve and increase the value
of the assets.
As it has not been long since China began to make investment overseas, we
have little experience in this area. I recently looked at the statistics, which
show that as of the end of year 2006, China's overseas investment in the
non-financial category was only $73.3 billion. It increased by $16 billion last
year. Still, it is insignificant in comparison with that of developed countries.
I know by raising this question, you may wonder whether the overseas
investment to be made by this newly established agency will affect US
dollar-denominated assets. China's foreign exchange reserves mainly consist of
US dollar denominated assets. This is the fact. China's holding of US dollar
denominated assets is mutually beneficial in nature. The setting up of a Chinese
foreign exchange investment agency will not affect the US dollar-denominated
People's Daily : Premier, you just told us that yesterday afternoon you wrote
back to primary school pupils. This concerns people's well-being. People's
well-being is the biggest concern of the NPC deputies and CPPCC members at the
two sessions this year, and it is also the focus of the Report on the Work of
the Government. In your report, which is down-to-earth in style, a number of
policy initiatives for improving the well-being of the people and increased
government input for this purpose are proposed. What systemic measures will be
adopted to ensure the effective implementation of these policies and use of
financial input so that people will benefit from them
Premier: The ultimate goal of our reform and development endeavor is to meet
the increasing material and cultural needs of the people. So the well-being of
the people needs to be improved. This issue concerns the daily life of the
people. The most important thing we should do now is to promote equal
opportunity in education, continue the pro-active employment policy, narrow the
income gap and build a social security system that covers both urban and rural
To improve people's well-being, we need institutional guarantee. We have
legislation on rescinding the agricultural tax and taxes on special agricultural
products. We have legislation on nine-year free compulsory education. And we
will develop a legal framework for a system to grant allowances for the basic
cost of living in rural and urban areas. We are drafting a plan to reform the
urban and rural medical and health system, and the plan will eventually be
institutionalized. Once the institutional arrangements are in place, it will not
be easy to change things, and the institutional arrangements will not change
simply because of the change in the government or leaders.
In addressing issues related to the well-being of the people, the focus of
our efforts should be on the disadvantaged groups, because these groups are
fairly large, particularly in rural areas. The speed of a flotilla is not
determined by the fastest ship, but the slowest one. Unless the condition of the
disadvantaged groups is improved, the well-being of the whole society will not
To improve the well-being of the people, we should make people feel happy
about their life. To do so, we must ensure people's democratic rights and
promote social justice and fairness. You may ask: what do you mean by being
happy? Let me quote a line from Ai Qing, a Chinese poet, "Go and ask the thawing
land, go and ask the thawing river."
NHK: I have two questions. The first one is on Japan-China relations.
Japan-China relations now have an opportunity for improvement. On the other
hand, many problems remain. What needs to be done to improve these relations? My
second question is on the abduction of Japanese nationals. What role can China
play regarding this issue?
Premier: China and Japan are close neighbors across a narrow strip of water.
As the ancient Chinese philosopher Kuan-tzu observed: "To win distant friends,
one needs, first of all, to have good relations with his neighbors. To avoid
adversity, one needs to ease animosity."
Thanks to the joint efforts of the Chinese and Japanese governments,
agreement was reached on removing the political obstacle to the growth of
China-Japan relations. This led to Japanese Prime Minister Shinzo Abe's visit to
China last October. To promote cooperation between China and Japan and
friendship between the two countries from generation to generation is the trend
of history and meets the aspiration of our two peoples. It is true that there
are still many problems between China and Japan, but there are three political
documents between the two countries, and they form the foundation of China-Japan
These three political documents settled the previous China-Japan relations on
the political, legal and factual basis. They also set the direction for the
growth of China-Japan relations from long-term and strategic perspective. We
should adhere to these three documents and take history as a mirror to guide the
future growth of bilateral relations.
If Prime Minister Abe's visit to China in October last year can be termed as
an ice-breaking trip, then I hope my visit to Japan in April will be an
ice-thawing journey. I expect to reach an agreement with Prime Minister Abe on
establishing China-Japan strategic relations of mutual benefit, and I will have
talks with him on setting up an economic cooperation mechanism and promoting
scientific and educational exchange and mutual visits between the two peoples,
especially the young people. I hope China and Japan will work together to ensure
a long-term stable and sound growth in friendship and cooperation.
As to your second question, we have expressed on many occasions China's
sympathy for and understanding of the issue of abduction of Japanese nationals.
However, this is an issue between Japan and the DPRK. I hope it can be resolved
smoothly through dialogue and negotiation between them.
ETTV (Taiwan) : The year 2007 is a crucial year for cross-Straits relations.
The political relations across the Taiwan Straits are now cold, but
people-to-people exchanges are very active. More and more Taiwan businesspeople
are coming to the mainland. Now that chartered flights are opened for Taiwan
businesspeople and fruits from Taiwan can be sold on the mainland, people in
Taiwan are now showing a great interest in the possibility of mainland tourists
visiting Taiwan. When will such visits take place? What other steps are you
going to take to advance cross-Straits relations? With the upcoming Olympics
Games in Beijing and election in Taiwan, the year 2008 is also a crucial year.
What is your view on and expectation of the future of cross-Straits relations?
Premier: The years 2007 and 2008 will indeed be crucial for cross-Straits
relations. Why? Because they are critical to upholding peace and stability
across the Taiwan Straits. In my Report on the Work of the Government, I
reiterated our firm opposition to all forms of separatist activities, including
"de jure Taiwan independence". We are watching closely the attempts the
separatist forces in Taiwan are making for "Taiwan independence". We will never
allow any change in history, reality and universally-recognized legal status of
Taiwan, that is, it has been an inalienable part of China's territory since
We will make every effort to promote peace and development across the Taiwan
Straits and continue to implement policies that are conducive to the peaceful
growth of cross-Straits relations. You are right in pointing out that more and
more Taiwan business people are coming to the mainland. Last year, the two-way
trade reached $100 billion, $80 billion of which was Taiwan's export to the
mainland. We are firm in protecting the lawful rights and interests of Taiwan
businesses and Taiwan compatriots in making investments, studying and traveling
on the mainland. We will actively promote comprehensive, direct and two-way
links between the two sides, namely "the three direct links". The first priority
is to open chartered passenger flights on weekends on a regular basis and
simplify procedures for chartered cargo flights between the two sides. People on
the mainland have longed to make tourist visits to Taiwan, and much preparation
has been made. We hope that their wish can be realized at an early time. Peace
and development across the Taiwan Straits represent the trend of the times. This
is a trend no one can reverse, as described in a classical Chinese poem: A
thousand sails pass by the wrecked ship; ten thousand saplings shoot up beyond
the withered tree.
CCTV: You have just said that government officials should work as public
servants and do not have any other power. This applies not only to government
functionaries, but more to leading officials. My question is about the
anti-corruption issue. The investigation and disclosure of cases involving Chen
Liangyu and Zheng Xiaoyu have aroused keen public response. We have received a
lot of comments from our viewers. On the one hand, people feel relieved because
they had hoped stern actions would be taken against corruption. On the other
hand, they are disturbed by corruption that they have seen. How can the
power-for-money deals in some areas of government administration be curbed
Premier: There is no denying that with the development of the market economy,
corruption has increased. It is quite serious in some sectors and localities.
Some of the cases even involve many high-ranking officials.
To solve the problem, we need first to address institutional deficiencies.
Corruption is caused by many factors, and the most important factor is excessive
concentration of power and the lack of effective checks and oversight. This
makes it necessary to reform our system. We must implement the Administrative
Permit Law that has been enacted and reduce the number of matters that require
government approval. When government departments have excessive administrative
resources and power of approval, it will give rise to corruption where public
officials trade power for money, abuse power for personal gains, or act in
collusion with businesspeople.
Second, we must promote reform in the political system. We should work to
diffuse concentration of power and enhance public supervision of the government.
All the decisions on administrative approval, particularly those concerning the
interests of the general public, must be made in an open, fair and transparent
Third, we should adopt a two pronged approach for education and punishment.
Every cadre and leading official should know that "while water can carry a boat,
it can also overturn it." All corrupt officials, no matter who they are, how
senior their positions and in what fields they have committed corruption, must
be brought to justice.
Le Monde : Recently in an interview you gave to the People's Daily, you said
that the socialist system and democratic politics are not mutually exclusive.
You also said that an initial stage of socialism will persist for a hundred
years. By that do you mean there will be no democracy in China in the next one
Premier: In my article, I made the point that socialism and democracy and
rule of law are not mutually exclusive. Democracy, legal system, freedom, human
rights, equality and fraternity are not something peculiar to capitalism.
Rather, they are the common achievements of human civilization made in the long
course of history and the common values pursued by entire mankind. I also
emphasized in that article that there are over 2,000 ethnic groups in more than
200 countries and regions in the world. As they differ in social condition,
history, culture and the level of development, they achieve democracy in
different ways and in different forms. Whether one likes it or not, this
cultural diversity is a fact.
You are actually asking what socialist democracy means. Let me be very clear
about it: Socialist democracy, in the final analysis, is to enable the people to
govern themselves. This means we need to ensure people's rights to democratic
election, democratic decision-making, democratic management and democratic
oversight. It means we need to create conditions for people to oversee and
criticize the government. It means we need to ensure that everyone enjoys
all-round development in an equal, fair and free environment and that people's
creativity and independent thinking are fully released. It also means that we
need to run the country according to law, improve the legal system and
strengthen the rule of law.
We still lack experience in socialist development, including the development
of socialist democracy. We will continue to follow the opening-up policy, draw
on all the achievements of human civilization, and build Chinese democracy in
keeping with China's special conditions. You asked whether by saying in my
article that the primary stage of socialism will last for a hundred years, I
meant that there will be no democracy in China in the next one hundred years.
You have got me wrong. What I meant was that it will take a long time for the
immature and underdeveloped socialist system to become mature, full-fledged and
developed. During this period, we need to achieve two major tasks and forge
ahead with two important reforms.
The two major tasks are to make concerted efforts to develop social
productivity, and to promote social fairness and justice. In particular, we
should make justice the core value of the socialist system. The two important
reforms are to promote market-oriented reform of the economic system, and to
promote democracy-oriented reform in the political system.
Democracy, like any other truth, must be put to the test of practice. Only
practice can tell whether the democracy practiced in a country or region is good
Hong Kong Economic Times : This year marks the 10th anniversary of Hong Kong's
reunification with the motherland. What is your assessment of Hong Kong's
performance in the past 10 years since its return? We know that you care a lot
about Hong Kong. What are your expectations of Hong Kong's future growth? In the
Report on the Work of the Government adopted today, you talked about the need to
accelerate the reform of the financial system. Hong Kong is an international
financial center. What role do you expect Hong Kong to play in the reform of
China's financial system?
Premier: In the past 10 years since its reunification, Hong Kong has made
significant strides. Over the past 10 years, the central government has
faithfully observed the principles of "one country, two systems" and "Hong Kong
people administering Hong Kong with a high degree of autonomy", and acted in
strict accordance with the Basic Law. It has not intervened in the
administration of the Hong Kong SAR Government. The Hong Kong SAR Government has
united the Hong Kong people in overcoming a number of difficulties, including
the Asian financial crisis. As a result, Hong Kong has maintained economic
stability, recovered from the crisis, grown economically and improved the
well-being of its people.
Hong Kong is now at a crucial stage of development. It has always been my
view that backed by the mainland and facing the world, Hong Kong has a unique
geographical advantage. It has the freest economy in the world, extensive links
with the rest of the globe, a full-fledged legal system and a rich pool of
managerial expertise. Hong Kong's position as a financial center, shipping
center and trade center is irreplaceable. On the occasion of the 10th
anniversary of Hong Kong's reunification, I would like to ask you to convey my
warm greetings to our Hong Kong compatriots. I sincerely hope that Hong Kong
will become more prosperous, open, inclusive and harmonious. The bauhinia flower
is in full bloom. The red bauhinia is beautiful this year, and it will be even
more beautiful next year.
Financial Times : My question is about Chinese government's policies on
domestic and global environment protection. Why did the Chinese government fail
to meet its targets for reducing energy consumption and pollution last year?
What are the specific reasons? It has been estimated that by 2009, China will
become the world's biggest producer of greenhouse gases. Will China at a certain
point in the future accept the greenhouse gas emission target jointly set by the
Premier: I gave a full explanation at the NPC session about why we fell short
of meeting the targets for reducing energy consumption and pollutant discharge
last year and proposed eight measures to address the problem. So I will not
repeat them here.
Your second question is about our position on greenhouse gas emission. We
support the Kyoto Protocol. Although China is still a developing country, we
have formulated a national program in response to climate change according to
the international convention on greenhouse gas emission. We have set a target
for cutting energy consumption per unit of GDP by 20 percent from 2006 to 2010.
Although the Kyoto Protocol has not set obligatory targets for developing
countries, the Chinese government is acting with a sense of responsibility to
the world and is earnestly fulfilling its due international obligations.
China News Service : China's growth rate has exceeded 10 percent while the
inflation rate has been kept below 3 percent for four years running. This is
rare both in China and the world. Some scholars believe that China's economy
will reach a turning point in 2007. What's your view? What do you think are the
major problems in China's economy? Will China be able to maintain such a
momentum of high growth and low inflation?
Premier: China's economy has maintained fast yet steady growth in recent
years. However, that is no cause for complacency, neither in the past, nor now,
or in the future. My mind is focused on the pressing challenges.
There are structural problems in China's economy which cause unsteady,
unbalanced, uncoordinated and unsustainable development. Unsteady development
means overheated investment as well as excessive credit supply and liquidity and
surplus in foreign trade and international payments.
Unbalanced development means uneven development between urban and rural
areas, between different regions and between economic and social development.
Uncoordinated development means that there is lack of proper balance between the
primary, secondary and tertiary sectors and between investment and consumption.
Economic growth is mainly driven by investment and export. Unsustainable
development means that we have not done well in saving energy and resources and
protecting the environment. All these are pressing problems facing us, which
require long-term efforts to resolve.
I have said that China's economy has enjoyed fast yet
steady growth for years. Can we sustain this momentum? First, the conditions are
there. The most important condition is that we have a fairly long peaceful
international environment that enables us to focus on economic development.
Second, we have a domestic market with huge potential. However, the key to
sustaining the momentum of China's economic growth lies in our ability to pursue
the right policies.
Journalists from home and abroad at Premier Wen Jiabao's press
conference in the Great Hall of the People on Friday.
We will continue to expand domestic demand, especially consumption. We will
press ahead with reform and opening-up to remove institutional and structural
obstacles and enhance knowledge and technology based innovation. All this will
lay down a solid foundation for ensuring economic growth. We will further
promote energy and resources saving and reduction of pollutant discharge to make
economic growth sustainable. The task is a difficult one, but we are confident
that we can accomplish it.
Frankfurter Allgemeine Zeitung : The Dalai Lama has expressed the hope to come
on a pilgrimage to China. But some officials of your government still accuse him
of advocating Tibetan "independence". Why does the Chinese government still see
the Dalai Lama as a splittist, although he says he does not advocate
independence any more? Would you welcome the Dalai Lama on a pilgrimage maybe
during the Olympic Games in Beijing?
Premier: Our policy toward the Dalai Lama is clear and consistent. So long as
the Dalai Lama recognizes that Tibet is an inalienable part of China and that
Taiwan is an inalienable part of China and stops his separatist activities, we
can have contact and discussion with him on his future. The door is always open.
Tibet is an autonomous region of China. If you still remember, the Fourteenth
Dalai Lama was the chairman of the preparatory committee for establishing the
Tibet Autonomous Region in 1956. But he later set up a so-called "Tibetan
Government in Exile" abroad. He calls for "a high degree of autonomy" in Tibet
and even demands that all Chinese troops withdraw from Tibet and that all the
Han people and other non-Tibetan ethnic groups in Tibet move out. People will
naturally ask: Does the Dalai Lama genuinely hope to see a unified China, or is
he bent on undermining China's unity? We will not only hear what he has to say;
more importantly, we will watch what he does. We hope that the Dalai Lama will
do something useful for China's unity and the development of Tibet.
Associated Press : China conducted an anti-satellite test this year. Although
the United States and the former Soviet Union did the same in the past, they
haven't done so in the last 20 years. Is this test and the fact that China is
steadily enhancing its military power consistent with China's advocacy of
Premier: The recent test conducted by China in outer space was not directed
against any country. It did not pose a threat to anyone, nor did it violate the
relevant international treaties.
China stands for the peaceful use of outer space and opposes arms race in
I wish to solemnly reiterate here that China's position on the peaceful use
of outer space remains unchanged. I also wish to call on the countries concerned
to negotiate and conclude a treaty on the peaceful use of outer space at an
It is alleged that China's military spending lacks transparency, and China's
test in outer space runs counter to the road of peaceful development.
And questions have also been raised about whether China poses a threat to the
world. In fact, these questions have been raised by reporters since this year's
NPC and CPPCC sessions opened.
In answering your question, I wish to make two points: First, China has a
population of 1.3 billion. It has a land area of 9.6 million square kilometers,
with a 22,000-kilometer-long land boundary and an 18,000-kilometer-long
coastline. China's military expenditure ranks low in both absolute and relative
terms compared with other countries.
Even some developing countries are ahead of China in ranking, not to mention
developed countries. Second, China suffered from aggression and oppression by
imperialist powers during its modern history after the Opium War in 1840. We in
China know too well what it means to be subjected to subjugation and aggression.
We are therefore sincere in pursuing peaceful development.
Our defense policy is defensive in nature. China's limited military
capabilities are solely for upholding China's security, independence and
sovereignty. We are very transparent on this issue.
(The press conference, which lasted 1 hour and 55 minutes, was attended by
1,200 Chinese and foreign reporters.)
(China Daily 03/19/2007 page5)