Shortly before his official visit to the Republic of Korea (ROK) on April 5, Chinese Premier Wen Jiabao gave a joint interview in Beijing to correspondents of 19 ROK news agencies, including Yonhap News, Chosun Ilbo, Dong-A Ilbo and KBS.

Wen Jiabao: Good afternoon. I have long been looking forward to visiting the Republic of Korea. I will bring with me friendship and cooperation on my visit. Let me first convey, through you, warm greetings and best wishes of the Chinese people to the ROK people. Now I am ready to take your questions.

Question: Thank you, Premier Wen, for giving this interview out of your busy schedule. I wish your visit to the ROK and Japan a success. China plays a very important role in the six-party talks. What is your view on the establishment of a peace mechanism on the Korean Peninsula? What role can China play on the issue of achieving North-South unification?

More than half a century has passed since the Korean Armistice Agreement was signed. However, a peace mechanism has yet to be established. This is abnormal. To establish a peace mechanism on the peninsula, it is most important to fundamentally eliminate Cold War of any form. We hope that as the six-party talks move forward, the parties concerned will improve consultation and dialogue and create conditions for the establishment of a peace mechanism so as to bring about lasting peace and stability on the peninsula.

Ultimately, the issue of the Korean Peninsula should be peacefully resolved by North Korea and South Korea independently. We hope the two sides will enhance mutual trust and improve relations through negotiation and dialogue so as to achieve independent and peaceful unification. The Chinese Government will continue to play a facilitating role on this issue.

There have been some disputes between China and the ROK over the history of Koguryo. China has included the history of Koguryo as part of Chinese history. I think this will become a stumbling block in ROK-China friendly relations. Besides, relations between the Koreans and the Chinese have recently become subtly tense due to the issue of Changbai Mountain. What is your view on this?

China and the ROK have a history of friendly exchanges running for several thousand years. This is conducive to the growth of China-ROK relations. There is no territorial issue between China and the ROK, and this provides the important political foundation for the growth of bilateral relations. Study on the history of ethnic or territorial changes should be viewed and handled properly according to the principle of separating academic research from political issues and the past history from reality, and should not affect the development of bilateral relations.

The ROK recognized China's full market economy status when President Hu Jintao visited the ROK at the end of 2005, making it the first to do so among countries whose trade with China exceeds US$100 billion. The ROK and China are geographically close, and their peoples also feel close to each other. ROK-China economic cooperation is highly important for both countries. What specific plans does China have to strengthen economic cooperation with the ROK?

China-ROK trade relations have registered rapid growth since the establishment of diplomatic relations 15 years ago. Two-way trade exceeded US$130 billion in 2006, 26 times that of 15 years ago. ROK companies have invested in over 30,000 projects in China, with a total investment of US$35 billion. Over 5 million visits are made annually between the two countries. Both countries adhere to the principle of equality, mutual benefit and complementarity in developing our trade relations. That is why our economic ties are so close.

The two sides further defined the goal for growing their economic relations and trade through President Hu Jintao's visit to the ROK in 2005 and President Roh Moo Hyun's visit to China in 2006. The goal is to raise the trade volume to US$200 billion by 2012. The two sides have also formulated the Medium and Long Term Development Vision for China-ROK Economic and Trade Cooperation, identifying five measures on investment and trade facilitation and 12 key cooperation areas.

In the context of globalization, China-ROK economic and trade ties have entered a new stage of expanding cooperation areas, improving cooperation quality and jointly standing up to challenges. To expand cooperation areas, we should adjust the structure of such cooperation, and strengthen cooperation in such fields as energy conservation, environmental protection, hi-tech research and development and information technology.

To improve cooperation quality, we should fully tap our respective advantages and promote sustained and balanced development of bilateral trade. To jointly stand up to challenges, we should enhance consultation and work closely together on issues of mutual interest at such multilateral forums as the World Trade Organization, Asia-Pacific Economic Cooperation, ASEAN (Association of Southeast Asian Nations) Plus Three and East Asia Summit.

We highly appreciate the ROK's recognition of China's full market economy status. China and the ROK have completed the non-governmental joint study on free trade area and are currently conducting a government-industry-academia joint study. We hope the study will be speeded up and produce a win-win proposal at an early date to promote the establishment of a free trade area between the two countries.

The "Korean Wave" plays an important role in bringing the Korean and Chinese peoples closer and promoting friendly relations between the two countries. But some say that this "Korean Wave" is cooling down. What is your comment? This year marks the 15th anniversary of diplomatic relations between the ROK and China. Is there any plan to expand cultural exchanges between the two countries?

There is a long history of cultural exchanges between China and the ROK. This helps bring the Chinese and Korean peoples closer and deepen their mutual understanding and friendship. The Chinese people, particularly the young people, enjoy the "Korean Wave," which we take as a cultural phenomenon. The Chinese Government will continue to encourage cultural exchanges between the two countries, including the "Korean Wave." This year marks the 15th anniversary of diplomatic relations between China and the ROK.

It is also the Year of Exchange for China and the ROK. Among the 47 exchange programs identified by the Chinese Government, most are cultural exchange programs. During my upcoming visit to the ROK, I will attend, together with ROK leaders, the opening ceremony of the Year of Exchange. I am confident that the activities held in the Year of Exchange will further promote China-ROK cultural exchanges.

While improving its economic structure, China has gradually removed many of its preferential policies for foreign-funded enterprises. This has greatly changed their operation environment and left them increasingly worried. What is your comment on this? 
Since China embarked on the path of reform and opening-up, we have adopted a series of preferential policies to encourage foreign investment and attract foreign capital and technology. This has not only boosted China's economic growth, but also strengthened our economic links with other countries. China's economy is in an important period of structural adjustment. In the past, the preferential policies were based on differentiations between regions and between domestic and foreign-funded enterprises, but now they are primarily industry-specific. In particular, China's National People's Congress recently adopted a new Enterprise Income Tax Law unifying enterprise income tax for both domestic and foreign-funded enterprises. This has created a level playing field for domestic and foreign-funded enterprises to compete with each other.

Preferential policies are retained for foreign-funded enterprises operating in hi-tech industries, special economic zones and China's western region as well as for those small enterprises making meager profits. A five-year grace period is given to foreign-funded enterprises that already signed contracts. This will not affect the operations of foreign-funded enterprises in China. China has a set of full-fledged laws and regulations regarding foreign-funded enterprises and a fair and stable market environment. This is the biggest favorable factor and guarantee attracting and promoting foreign investment in China.

China has a huge labor resource advantage in terms of quantity, quality and cost. We will strengthen management of the labor market and training of workers. I also want to emphasize that while China protects the lawful rights and interests of foreign businesses in China, foreign-funded businesses in China are also called on to protect the lawful rights and interests of Chinese workers they employ.

(China.org.cn)