Q: Another subject in discussions between the United States and China on occasion is Tibet. The Dalai Lama has declared that he is not seeking independence for Tibet. And I believe former President Jiang Zemin had said on one occasion that he was willing to meet with the Dalai Lama to discuss the situation. Do you foresee face-to-face meetings with the Dalai Lama and representatives of China?

A: Regrettably, the Dalai Lama has not genuinely given up his position of Tibet independence and has not given up the separatist activities aimed at splitting the motherland. He also has not recognized that Taiwan is an inalienable part of Chinese territory.

We have taken note of the recent remarks by the Dalai Lama but we still need to watch very carefully what he really does. So long as he genuinely abandons his position on seeking Tibetan independence and publicly recognizes that Tibet and Taiwan are inalienable parts of Chinese territory, then contacts between him and the central government can resume and we can resume the discussions with him. The door to communication between the central government and the Dalai Lama is wide open.

Q: China's economic performance has been very rapid in recent years, creating a very strong Chinese economy, and great economic growth in a short period of time. Do you also believe political reform should be accelerated to keep pace with economic reform?

A: China embarked on the road to reform and opening up in 1978. Our reform is a comprehensive one which includes both economic and political restructuring. Precisely as Mr. Deng Xiaoping pointed out, without political reform, economic reform will not be successful. In essence political restructuring in China aims at integrating the leadership of the Chinese Communist Party, the people's role as masters of their own affairs and rule of law in the conduct of public affairs.

At present, it is particularly important to do a good job on the following. First of all, we should develop democracy to safeguard people's democratic rights and to respect and protect their human rights. Secondly, we should improve on the legal system through better legislation, better administration according to law, and greater judicial reform. Thirdly, we should run the country according to law, making our socialist democracy more institutionalized, standardized and proceduralized, and in this way we can make sure that it will not change because of changes in the leadership and changes in the views and focus of attention of leaders. Fourth, we must strengthen supervision, and we should make sure that the government is placed under the supervision of the people. We have to develop democracy and strengthen supervision. Only in this way can we make sure the government will not relent in its efforts, and this would help avoid a situation whereby the government would be a failure.

China is a big country with 1.3 billion people. So to press ahead with political reform, it has to be done in an orderly fashion and in a well-organized manner. Now there exist many misunderstandings. I know this is your first time in China. I don’t know what you have seen. For instance, with regard to freedom of religious belief, freedom of religious belief is actually written into China's constitution. China currently has over 100 million religious followers. China has over 100,000 religious sites. Let me put in another way. Since the beginning of reform and opening up, one religious site has been either newly built or restored every three days. You may just take a walk around the Zhongnanhai compound, and you can see many, many religious sites. For instance, to the south of Zhongnanhai, there's the Chongwenmen Protestant church. To the east of Zhongnanhai, there's the Wangfujing Catholic church. Nearest to Zhongnanhai is the famous Xiciku church. To the north of Zhongnanhai, there's the Yonghe Buddhist monastery. To the west of Zhongnanhai is the Baiyun Taoist temple. You may visit these religious sites. I‘m sure when you are there, you will see not just people practicing their religious faith. At the same time, these religious believers are also law-abiding citizens. Also, to the southwest of Zhongnanhai, there's Islam, the large Niujie mosque.

Over the past 5,000 years of Chinese history, China has been very tolerant toward the development of religion. Among the five major religions in China, only Taoism is an indigenous religious belief. The other four actually came from overseas. For instance, Buddhism came to China from India, Catholicism and Protestantism from the West, and Islam from the Middle East or West Asia.

Q: What steps do you anticipate will be next taken in political reforms? For example, might direct elections of local governments be extended upward to the township level?

A: You must know quite a lot about Chinese elections. At the moment, we have introduced the practice of self-administration and direct elections in 680,000 villages. This is a great innovation, and it is also very good practice for Chinese farmers. We also introduced suffrage for the election of people's deputies at the level of townships, counties and urban cities without districts. Indirect elections are held for the leadership of the provinces, autonomous regions, municipalities with districts, as well as the central authorities. Why? This is because China is such a huge country. It has a big population. It is very underdeveloped, and economic development is uneven between regions. So conditions are not ripe for direct elections at the higher levels. The first hindrance in my view is the inadequate education level of the population.

Q: Premier Wen, you mentioned uneven development during this period of great economic growth. Are you concerned about a gap growing in economic conditions between the more well off parts of China and the poorer parts of China, such as in the west?

A: I do have such concerns. Not too long ago, the Commerce Secretary, Mr. Evans, visited China, and he started his visit going to China's northwest. He came to see me and he was sitting right here where you are sitting. He took with him two photographs that were taken when he visited the countryside in China's northwest. From his visit, he learned that the countryside in China is still very backward. So I told him with this knowledge, the problems that he was about to discuss with me could be solved very easily.

I’ve personally been to 1,800 counties throughout the country. So I'm in a position to say I've seen the worst poverty in China. So I know very well how uneven our development has been. Yes, it is true that in the coastal areas in the East, skyscrapers overwhelm you. However, in large areas of the countryside, people are still living in shabby houses with thatch roofs and still use oxen to till the land. Thirty million people are still below the poverty line.

So one important inspirational lesson we have learned from the struggle against the SARS epidemic is that we have to emphasize coordinated development. And this is what the new Chinese leadership has learned from the struggle against SARS.

Uneven development between the urban and rural areas, and imbalance between economic development and social progress -- this situation can be described with an analogy. It's like a human being who has one long leg and one short leg. If one leg is longer than the other, this person is bound to stumble and fall. And a country with one leg longer than the other will also stumble and fall.

We have worked out a strategy for the eastern part of the country to encourage them to continue with the big momentum of their development. And where conditions permit, they should take the lead in achieving modernization. This is because through their development, a lot of financial resources will be made available to support the development of China's center and west. At the same time, we抮e also implementing a strategy to develop China's western region. And very recently, we decided to implement a strategy to revitalize the old industrial bases in China's northeast. So with good interaction between the east and west, we hope to bring along development in the central region of the country. With all these efforts, we hope gradually we can bring about more coordinated development between the two different regions. But I want to remind you that this could be a very time-consuming process.

Q: Is this also the reason why you are changing the constitution to protect private property rights and giving farmers the right to buy and sell land use rights?

A: We have decided on an important policy and that is public ownership will be the mainstay and multiple forms of ownership will develop side by side. To sum up, we can use two unswervingly to describe this. We will unswervingly uphold the public ownership system and develop the public sector, and we will unswervingly encourage, support and guide the development of the non-public sector.

This basic economic system has been written into our constitution, and in the recently held third plenary session of the 16th Central Committee of the Chinese Communist Party, the concept of property rights was introduced. It was made very clear at the session that we would formulate legislation protecting private property. Such a move was entirely based on China's actual conditions in the spirit of seeking truth from facts, because this will help accelerate China's economic development. It will also help ease the pressure from employment. It will also give greater scope to the creativity and enterprising spirit of the Chinese population and will in the end help us achieve the goal of common prosperity. At the moment, privately run enterprises employ a total of 80 million workers and they contribute to 23 percent of our GDP. In the countryside, we have the household contract management system. It has long since been stipulated that land operated by farmers can be transferred in a lawful and compensatory manner.

Q: Earlier you mentioned the financial sector. Do important changes need to be made there to provide more financing for the private sector and business? And does the government need to take steps to deal with the loan problem at some of the big banks?

A: Financial reform is the most difficult and the most crucial part of our overall economic reforms. As is known to all, the financial sector in China has been plagued by many problems. The biggest problem is the fairly high proportion of nonperforming loans from banks. There exists significant risk. The problem is caused by defects in the system. So we have to accelerate the reform of the banking system. Our aim is to put in place a modern banking system whereby the commercial banks will be commercial banks in a true sense. That means they will be responsible for their own operation decisions and they will be held responsible for their profits and losses. On our part, we will help create conditions to introduce corporate governance to the banks through the share-holding system. Those that meet the conditions can go public or be listed.

You also touched upon an important point, that is to ensure there will be more financing in support of small and medium sized enterprises and also the privately run enterprises. I have to admit that not enough has been done in this field, even though the small and medium-sized enterprises play a very important role in creating job opportunities and in providing employment. So while we step up regulation and improve our capability to avoid financial risks, we should make sure that the banks would provide more financing and support of these small and medium-sized enterprises.

Q: If I may ask one question about the events of 1989 in Tiananmen. You went to visit the students there during that time. Have you concluded were they counterrevolutionaries or were they patriots?

A: In the last century, at the turn of the 1980s and 1990s, drastic changes took place in the Soviet Union and countries of Eastern Europe. In China, a political disturbance occurred. At that time, the party and government of China adopted resolute measures in a timely fashion to safeguard social stability and became more determined to press ahead with China's reform and opening up. Our development over the past years has proven that stability is of vital importance for China. As premier of this country, I think the most important issue for me is to ensure stability and development. This is because China has 1.3 billion people.

Q: You've talked about stability being an important concern of yours here. President Bush has in two recent major speeches, one in Washington and yesterday in London, has talked about the importance of freedom as a core American value, particularly in reference to the attacks by terrorists on American and British and other targets. Do you see the core values of America and China being different or similar, and how does that affect the future development of Chinese-American relations?

A: Let me ask you a question. In the past 25 years of reform and opening up, enormous changes have taken places in China's economic landscape. Have people from the outside ever seen the changes taking place in China's democracy and freedom? At the moment, people can choose what kind of jobs they want to have, they can choose what kind of information they seek, they can choose where to visit. Twenty-five years ago, for a Chinese person to visit a foreign country or even to visit Hong Kong, part of our own country, it was very difficult or almost impossible. At the moment, every year, tens of millions of Chinese travelers visit places across the world. And in addition, as I said earlier, we now have freedom of religious belief.

Let me share with you how I feel about my duties. As premier of China, my responsibility is heavy, the job is demanding, and there is endless work to do. 1.3 billion is a very big number. So if we use multiplication, any small problem multiplied by 1.3 billion will end up being a very big problem. For a very big aggregate divided by 1.3 billion, it will come to a very tiny figure. This is something that is quite difficult for foreign visitors to understand and appreciate.

I remember that in the Declaration of Independence, Jefferson wrote that all men are created equal, that they are endowed by their creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness. He put life before anything else. So when we say that for the Chinese people's human rights, the right to life and development is most important, sometimes our friends in the Western countries find this difficult to understand. I think they only need to refer to the Declaration of Independence written by Thomas Jefferson. In 1776, in that Declaration of Independence, he already put the right to life before every other right. The U.S. has also witnessed the process of development of democracy if you look at the history, from the Declaration of Independence in the 18th century, the Civil War in 19th century, and to the Martin Luther King incident in the 20th century.

I was being very straightforward. If I can speak very honestly and in a straightforward manner, I would say the understanding of China by some Americans is not as good as the Chinese people's understanding of the United States.

Q: Speaking of that, you seem to have a very good understanding of the United States. Have you visited the United States before?

A: I have not made an official visit to the United States, but I've been to the United States during a stopover on my way to South American countries. I spent a few days in New York and in Los Angeles.

Q: So you know a lot from what you've been reading I imagine about the United States. Is there anything that made a particular impression on you in your reading about the United States?

A: My biggest hobby actually is reading. I don't know how to live without books. They're my best companion. Let me share with you a story. Once I had a meeting with the president of the Republic of Korea, Mr. Roh Moo-hyun, and he told me that in his inauguration speech, he quoted President Abraham Lincoln from one of his speeches in 1861. So after the meeting, I went back home and looked for the book about Abraham Lincoln on my bookshelf, and I found that paragraph. In the very same paragraph, I had already used red pencil to underline these lines.

He wrote, "The mystic cords of memory, stretching from every battlefield and patriot grave, to every living heart and hearthstone, all over this broad land, will yet swell the chorus of the Union, when touched again, as surely they will be, by the better angels of our nature."

So my understanding is that Lincoln's approach to the Civil War had an impact, an influence on President Roh Moo-hyun on how he's going to address the problems between North and South Korea. President Roh wants to see reconciliation between the two.

I want to make one last remark. The United States is the most developed country in the world. China is the most populous developing country in the world. To develop friendship and cooperation between these two countries will not only bring benefits to our two peoples but will also be conducive to peace and stability in Asia and the world at large. In 1972, farsighted leaders on the two sides opened the door for exchanges between us, and put an end to 23 years of estrangement and no contact. That started the peaceful coexistence between us. Despite the many ups and downs we have experienced, our relationship has moved forward. So what have we learned from the past years of the history of our relationship? I think at least we can draw three conclusions. First, cooperation will bring benefits to both nations, whereas confrontation will hurt both sides. Second, there exists a good basis of cooperation and common interests between China and the United States. Third, friendship and cooperation between China and the U.S. is not only conducive to peace and stability in the Asia Pacific region, it is also conducive to peace and stability throughout the world.