Premier Zhu Rongji met the press in the Great Hall of the People Friday morning and answered questions on domestic and international issues. The following are the major topics covered by the premier.

Economic Growth Rate

Farmers' Income

China's Proactive Fiscal Policy

Income Disparity

The Government's Work of This Term

Hong Kong's Economic Development

Taiwan Issue

Sino-Japanese Relations

Sino-Russian Trade Ties

Economic Growth Rate

The 7 percent economic growth target for 2002 is a practical one and can be reached, Chinese Premier Zhu Rongji said in Beijing.

The 7 percent growth target was set after having considered various factors, including the slowdown in the world economy, he said.

The premier said: "The economic performance in the first three months is better than my expectation. That gives me more confidence that the seven percent growth target can be met."

According to the predictions made by the National Statistics Bureau, China's GDP grows 7.5 percent over the same period of last year in the first three months, said the premier, adding he is "proud of the unprecedented rapid development of the Chinese economy" over the years as a result of the country's proactive fiscal policy.

Zhu said that the government's proactive financial policy and prudent monetary policy have been working well, and the Chinese economy would otherwise have collapsed.

Zhu Rongji said that the current government's efforts in infrastructure buildup will leave to the next government 2.5 trillion yuan of quality assets that will go a long way to further promote China's economic growth.

Farmers' Income

Zhu Rongji said that how to raise the income of farmers has been his biggest concern, but the problem can only be gradually resolved with agricultural restructuring.

Without price rises in the past four years, the salary of government employees is approximately doubled, the wages of workers in state-owned enterprises have been raised by a big margin at a time when stepping out of difficulties, and the income of retirees is better with the improvement of the social security system.

By contrast, the income of farmers didn't see a fast growth, and even dropped in some areas, the premier said.

The Chinese government has made great efforts to resolve the problem, and the premier talked a lot about agriculture and farmers in his latest government work report.

"The best way out is to push forward the restructuring of agriculture," the premier said, explaining that the prices of farm produce cannot go up at a time when supply exceeds demand and the income of farmers cannot be raised as a result.

He added that with China's accession to the World Trade Organization, farm products from the United States will flow into China in large quantities.

China now has 250 million tons of grain reserves. So the government encourages farmers to return farmlands to woodlands, grasslands and lakes in a bid to contribute to the increase of farmers' income. In addition, the fee-for-tax reform in rural areas will help lessen financial burdens on farmers, Zhu said.

"I believe that these measures will help relieve the current difficult situation farmers face," he said.

China's Proactive Fiscal Policy

Premier Zhu said that China's fiscal deficits and government debts are both controlled below internationally accepted warning line.

Zhu said that most countries in the world have deficits and the problem lies not in whether or not you have deficits, but on whether or not the deficits are within your bearing capacity and what causes the deficits.

He said that China has budgeted deficits of 309.8 billion yuan for 2002, about three percent of the GNP while the amount of treasury bonds planned to be issued will be 2,560 billion yuan, 16 percent of the GNP, both below the internationally accepted warning line.

Most of the deficits are attributable to spending on infrastructure construction, he said, adding that his government will leave to the next government 2.5 trillion yuan of quality assets that will go a long way to promote social and economic development.

Income Disparity

Premier Zhu Rongji said China's widening gap between the rich and the poor is expected to be narrowed in the future.

In response to a question on the income gap issue, the premier said China has adopted a number of policies and measures to help the low-income groups in China, including the country's peasants, and laid-off workers, the unemployed as well as retirees.

A considerable portion of his government work report deals with the issue of raising the income of the peasants, which has become one of the priorities of the government, Zhu said at the press.

In the meantime, the Chinese government attaches great attention to establishing a national social security system to care for the laid-off, unemployed and retired workers, another major task for the government, he added.

Zhu went on to say the central government will move to bridge the gap between the rich and the poor through fiscal budget arrangements and taxation reform, and tax policies will be the most important means to solve the problem.

"I think the problem will be tackled after a period of time," said the premier.

The Government's Work of This Term

Zhu Rongji said that he has "basically fulfilled" his promises he made at the press conference right after he was elected premier four years ago.

He was satisfied with the rapid development of the Chinese economy, which grew 7.8 percent, slightly short of the 8-percent target in 1998 when China was hit by unparalleled floods and the impact of the Asian financial crisis, Zhu said.

He said that he fulfilled the promises of making loss-making state-owned enterprises end losses and turn a profit in three years, overhauling the commercial banking system to bring the proportion of non-performing loans down by three percentage points, and downsizing the government by half.

Zhu said that reforms of the systems of grain distribution, investment and financing, housing, medical care and taxation have basically been completed or are under way, adding he was satisfied with the reform process.

He said with pride that his government has lived up to its promises to the people and the National People's Congress and that is why his government work report has been adopted with overwhelming majority votes at every annual session of the National People's Congress.

Hong Kong's Economic Development

Chinese Premier Zhu Rongji said that Hong Kong's role as a financial center in Asia will continue and the city has huge development potential.

Zhu made the remark in responding to a Hong Kong journalist who said that many people in Hong Kong are worried that the city may lose its position as a major center attracting foreign investment.

The premier said that Hong Kong's long-standing position as an international financial center and advantages in other aspects have not diminished. In the 1970s and 1980s, Hong Kong had made great contributions to China's reform and opening up process, a role no other cities could compare to.

He noted that with the development of the world economy, there need to be some adjustments in Hong Kong's economy, and all elites in Hong Kong are now exploring the issue. "We are willing to explore this issue together with the government of Hong Kong Special Administrative Region and Hong Kong people," the premier said.

"The advantages of Hong Kong have not yet been fully utilized, its development has no limits, and there is no inland city in China can replace the role of Hong Kong any time soon."

"The goal (of further developing Hong Kong's economy) will surely be realized, and we should have the confidence," he said.

Hong Kong will maintain its status as a regional financial center in Asia, said Premier Zhu.

The premier said that since Hong Kong's GDP is as large as that of Guangdong Province, no major cities in China's inland can replace it. Hong Kong's status as a regional financial center is irreplaceable, he stressed.

He confirmed that the central government and the SAR government are trying to find ways to promote cooperation between the inland and Hong Kong SAR.

China's WTO accession has provided more opportunities for Hong Kong to cooperate with the inland in economic development, Premier Zhu said, stressing the central government is sure to cooperate with Hong Kong SAR government on any thing that is good for Hong Kong's development.

Taiwan Issue

Premier Zhu said that there is no change in China's policy toward the Taiwan issue. Zhu said that China still sticks to the policy of "Peaceful Reunification", "One Country, Two Systems" and the "Eight-Point Proposal" advanced by President Jiang Zemin.

"We will not renounce use of force in solving the Taiwan issue, " Zhu said, "but that's directed at the die-hard elements for Taiwan independence. And we don't have to repeat it every day and every month," the premier said.

Sino-Japanese Relations

Zhu Rongji said that he believes Japanese crown prince and his wife will meet with warm welcome when they visit China.

In answering a question concerning Japanese Crown Prince Naruhito and his wife Masako Owada's possible visit to China, put by a Japanese reporter, Zhu said China proposed a long time ago that the crown prince and his wife visit China.

"I hope they will accept the invitation and I believe their visit to China will meet with warm welcome in this country," Zhu said.

This year marks the 30th anniversary of the normalization of China-Japan diplomatic relations, and the two sides will hold a series of events to celebrate, Zhu said.

The two sides will enhance contacts and exchange of ideas. "Japanese Culture Year" activities will be held in China and "Chinese Culture Year" activities will be held in Japan as part of the commemorative activities, the premier said.

Sino-Russian Trade Ties

China and Russia will work together to boost their trade and economic cooperation in a bid to have bilateral trade volume doubled in two or three years, the premier said.

Zhu said Chinese and Russian premiers would hold their regular meeting in Shanghai this year to discuss new measures to further advance bilateral ties, including economic and trade cooperation.

Over the past years, the strategic and cooperative partnership between China and Russia has been making headway, Zhu said.

He quoted published records as saying that Sino-Russian trade volume increased by 33.3 percent in 2001.

(China Daily March 15, 2002)