China's new premier, Wen Jiabao, and four vice premiers met the press in Beijing Tuesday, shortly after the closing meeting of the First Session of the 10th National People's Congress (NPC). Premier Wen answered questions from both Chinese and foreign correspondents.

Objectives and Policies of New Cabinet

China's new cabinet should continue to maintain a sustainable and comparatively rapid development of the national economy and improve people's living standards, new Chinese Premier Wen Jiabao said in Beijing Tuesday morning.

This is "one goal" China's new cabinet will strive to achieve, the premier told a press conference held shortly after the closing meeting of the First Session of the 10th National People's Congress (NPC), adding that it is vital for the government to maintain continuity and stability of policies and stick to the policy of expanding domestic demand and implement the proactive fiscal policy, in order to achieve the goal.

The new premier put the work of his new cabinet in a nutshell of "four phrases," namely, to "achieve one goal," "implement two key policies," "solve three major economic problems" and "promote reforms in four major aspects."

The two key policies are: To realize the strategic economic restructuring and continue to open up to the outside world.

The three major economic problems are: How to solve unemployment and social security system, how to increase fiscal revenue and cut public spending, and how to correct and standardize the economic order. The "reforms in four aspects" refer to the reform of the rural economy, the reform of state-owned enterprises, the reform of financial system and the reform of governmental agencies.

Wen said that rural reform covers rural taxation system, grain purchase and sales, subsidies to farmers, the rural financial system and rural medical and health service.

The premier said China will continue to take state-owned enterprise reform as the central task of the overall economic reform, aiming at establishing a modern corporate system, and in the meantime, China will promote the reform of the system for managing state assets.

He said that while establishing and improving the financial regulation system, his government will take steps to speed up the reform of state-owned financial enterprises so as to establish a modern financial enterprise system in its true sense.

The premier laid out a number of principles necessary for achieving the above objectives.

He stressed the necessity of giving priority to the development of agriculture and rural economy, and of promoting a coordinated and well-balanced development between urban and rural areas.

He encouraged the eastern areas of China to seize the opportunities to accelerate development and renovate and revitalize old industrial bases and the western part to implement the western China development strategy.

The premier said that his government will take full advantage of the opportunities brought about by China's accession to the WTO to open wider to the outside world.

He pledged continued efforts to implement the sustainable development strategy and the strategy of developing the country by relying on science and education so as to achieve steady economic and social development.

China will strive for a proper balance among development speed, dimension of reform and social bearing capacity in order to realize the perfect integration of reform, development and stability, he added.

Problems and Challenges Ahead

The premier said that his new cabinet is starting work on a "good foundation" laid by his predecessors, or the previous cabinet headed by Zhu Rongji, but the new cabinet must be prepared for "possible adversities" and still faces many problems and challenges.

The comparatively sluggish development of agriculture and the slow increase of farmers' income have emerged as a major problem facing his new cabinet, Wen said.

The construction of modern corporate system is a long-term task. The increasing number of laid-off workers and the gap between urban and rural areas and the east and west parts of the country are also hard tasks for the new government, said the premier. China now faces a heavy fiscal burden, and the amount of non-performing loans in banks is quite high.

But Wen said that China can solve these problems with its strong material and technological foundation and social and political stability. China is able to overcome various difficulties and fulfill the lofty target of building an affluent society in an all-round way under the leadership of the Communist Party of China (CPC) Central Committee with Hu Jintao as General Secretary.

He said there is a lot to learn from his predecessor Zhu Rongji. Although many people consider him a mild-tempered person, he told the press that he is a man of strong belief and ready to take every responsibility resolutely regardless of possible bad luck.

Wen Vows to Live up to Expectations of People

Wen said that he will spare no effort to meet the expectations of the Chinese people.

He briefed the press on his family background. Born into a family of teachers in rural China, Wen said his grandfather and parents were all teachers. His family and the primary school run by his grandfather were destroyed by warfare. "Suffering of the old China left unforgettable impression in my tender mind," he said.

Wen then worked in the field of geology for 25 years, mostly "under harsh conditions", he said.

Through all the hardships, "I nurtured a confidence that a person, a nation or a country can reach the glorious summit so long they can endure all hardships," he said.

Wen then worked in Zhongnanhai, headquarters of the central authorities, for 18 years. During this period he witnessed the accomplishments made by China under the leadership of Deng Xiaoping and Jiang Zemin.

China now faces a historic period for development, he said. "Only under the leadership of the Communist Party of China and by continuing the reform and opening-up can China realize prosperity," he stressed.

During his working period in the central government, Wen traveled widely across China, which helped him further understand the conditions of the country and people.

As new premier, Wen vowed to earnestly assume his duty as granted by the Constitution and make every effort to meet the expectations of the Chinese people.

Wen vowed to strengthen the effort to fight against corruption. His cabinet is willing to put themselves under the supervision of the people and the whole society, Wen said.

New Premier's Happiness and Worry

Wen said that he had lots of figures which make him both happy and worried, pointing to China's fast GDP growth as well as the slow increase of farmers' income, rising unemployment, lingering poverty and east-west disparity in development.

Relevant figures were all stored in his brain, dubbed as "a computer" by some western diplomats.

China has a huge labor force of 740 million, while the combined labor force for developed countries in Europe and North America is just 430 million, Wen noted.

Meanwhile, each year China sees the increase of some 10 million new urban labor, and the country's laid-off and jobless people now total nearly 14 million, he said.

The size of rural migrant workers in cities is regularly kept at around 120 million, putting China under immense employment pressure, he added.

Some 900 million of China's total 1.3 billion population live in the countryside, and 30 million of them still live under the poverty line.

"If the benchmark for the poverty line is raised by 200 yuan, the number of Chinese people living in extreme poverty will surge to 90 million," he added.

In a display of the widening gap between China's east and west, some five to six provinces and cities have contributed more than 50 percent of the country's GDP (gross domestic product), Wen pointed out.

"These figures make me worry," he said.

However, he said there are also some statistics which make him feel happy.

These figures include an average GDP growth of more than 9 percent in the past two decades and more, as well as a whopping foreign exchange reserve of some US$300 billion, he said.

On Non-public Sectors

China will continue to support the growth of enterprises in the non-public sectors and treat them the same as enterprises in the public sector with regard to market access, taxation, bank loans and import and export, said Wen.

The enterprises in the non-public sectors play a very important role in creating jobs, he said.

"It is the government's steadfast policy to support the growth of enterprises in the non-public sectors, including private enterprises," Wen stressed.

Stable RMB Benefits All

Wen said that a strong and stable Renminbi is beneficial not only to China, but also to Asia and the world as a whole.

He said that China adopts a regulated floating exchange rate system according to market demands. Since 1994 when China reformed its exchange rate system, RMB has appreciated 18 percent against the US dollar and 34 percent against euro in real terms.

On Ownership of Banks

Wen said that with the supervision continuing to improve, diversified ownership will be a certain trend for Chinese banks, but will go through a fairly long period of time.

He said China has only a history of a dozen years in building commercial banks in true sense, and that share-holding banks have already emerged.

On Non-performing Loans

Wen said that reform is the key to resolve the problem of the high non-performing rate of loans (NPL) in state-owned commercial banks.

The banks will focus on the building of modern corporate structure and the establishment of modern financial system and will create conditions to carry out share-holding system in a bid to cut down non-performing loans, he said.

On Farmers' Financial Burden

China will continue to cut down financial burden on its farmers through various means, including downsizing the government payroll in rural China, while offering more financial resources for rural areas, Wen said.

As of this year, the increased portion of central government budget earmarked for science and technology, education, culture and health will go primarily to rural areas, said the premier.

On Political Restructuring

China is to push forward political restructuring in three aspects, including scientific decision-making, law-based administration and democratic supervision.

Wen said China will draw opinions from officials, experts and civilians for major issues and economic construction projects, to forge a scientific and democratic decision-making system. A law-based administration will be carried out, receiving restrain and regulations from public.

China will also push forward democratic supervision, with the government under the supervision of the National People's Congress (NPC) of China, the Chinese People's Political Consultative Conference (CPPCC), the common people and the media, said Wen.

He emphasized that only by advancing democratic supervision, will the government not slow down its pace.

Wen said continuously perfecting China's political system and administration will be one of his priorities. He also said that he is a man ready to take responsibilities and will devote himself to serving the country.

China will press ahead with its institutional reform, the reform of the system of administration, examination and approval, and continue to reform financial management and management of human resources, Wen said, adding that his new government is willing to accept supervision by the Chinese people.

Continuing Support to Hong Kong

The Hong Kong Special Administrative Region is capable of overcoming difficulties it faces under the leadership of Chief Executive Tung Chee-hwa, said Wen.

Wen said that the central government will continue to render support to the Hong Kong Special Administrative Region (SAR) to ensure its stability and prosperity.

The central government "will spare no effort" in this regard, he stressed.

The central government has planned to promptly implement all measures for building up closer economic relations between the inland areas and the HKSAR, he said.

To safeguard the stability of HKSAR is "a firm goal and duty-bound" for the central government, he added. The new premier expected to visit Hong Kong at the earliest possible time.

On Taiwan Issue

The new Chinese government will continue to follow unswervingly the policy of peaceful reunification of the motherland on the basis of "one country, two systems," said Wen.

"I want to take this occasion to extend my best regards to the Taiwan compatriots," said Wen.

It's the common aspiration of the entire Chinese people, including the Taiwan compatriots, to see the complete reunification of the motherland, said Wen.

On the basis of the one-China principle, the Chinese government will seek the early restoration of dialogue and talks across the Taiwan Straits while opposing Taiwan independence, he said.

The Chinese government will also work hard to promote economic and cultural exchanges across the Straits and work for the early realization of the three direct links between the two sides, he added.

The government is firmly opposed to "Taiwan independence," said the premier.

On Stability

Wen said that stability is of "critical importance" to China. "As the premier of a nation with a population of 1.3 billion, I'm most concerned about the country's development and stability," he said.

China owes its great achievements in the past 13 consecutive years to a stable domestic situation, he said.

On the Iraqi Issue

The Iraqi issue should be settled peacefully through political means within the framework of the United Nations and war should be avoided, Wen said.

The UN Resolution No. 1441 should continue to be implemented, and the inspection work should be continued, he said.

In the meantime, Wen said, China held that the Iraqi government should strictly abide by the relevant UN resolutions. Iraq should coordinate with international organizations to proceed weapon inspection, and possess no weapons of massive destruction.

Now the war on Iraq is like an arrow put upon a bow, and under the touch-and-go situation. Even with a clinch of hope, China will not give up efforts to solve the Iraq issue through political means, he said.

Wen said that the United Nations Resolution 1441 complies with the United Nations Charter and should be honored.

China's stance on the Iraqi issue is a clear-cut one, Wen noted. "China will continue to adhere to the position that the Iraqi issue should be resolved by peaceful and political means."

China has noticed the latest address made by US President George W. Bush on Iraqi issue, the premier said.

On Sino-Russian Relations

Wen Jiabao said that China-Russian ties will see stable growth thanks to concerted efforts made of both countries.

China and Russian share more than 4,000 kilometers of common border. "The stability and development of Sino-Russian ties comply with the fundamental interests of the two peoples," he said.

The Sino-Russian strategic partnership of cooperation has scored further development and the Sino-Russian Good-Neighborly Treaty of Friendship and Cooperation signed by the two countries has laid a legal foundation for the bilateral ties, he said.

China and Russia will continue to give play to the role of the Shanghai Cooperation Organization, a six-member regional organization founded in 2001, he noted.

"All members will strengthen consultation on major international issues and make due contribution to safeguarding world peace and promoting common development," the Chinese premier said.

On Sino-Japanese Relations

Wen said that he would visit Japan only when there is an "appropriate atmosphere."

Wen said that China hopes to develop relations with Japan at all fields, including high-level exchanges. But he stressed China hopes Japan can strictly observe the three joint documents between the two countries, take history as a mirror and look forward to the future.

To handle the issues left over in history appropriately is always the political basis for the development of bilateral relations between the two countries, Premier Wen said.

On Palestine-Israeli Conflict

The Palestine-Israeli conflict should be resolved through peaceful dialogue, said Wen.

"We truly hope the two sides can work to avoid war and resolve the conflict through peaceful resolution," Premier Wen said at the press conference.

(China.org.cn March 18, 2003)